How is Federal Housing Money is Spent in Detroit?

The federal government provides $37 million annually to Detroit for housing programs that help stabilize life for people, according to Arthur Jemison. 

As the director of the city’s housing and revitalization efforts, he manages those grants which pay for, in part, 3,700 units of public housing and 6,000 Section 8 vouchers. Jemison characterizes that money as being designed to directly fight poverty in a city where 40 percent of residents are at or below the federal poverty threshold.

He speaks with WDET’s Sandra Svoboda about the funds, how they’re used and how they’re part of Mayor Mike Duggan’s strategies for fighting poverty. Jemison also raises the related issue of how home ownership helps people accumulate wealth, and why that’s important to the region’s economic situation.

The audio of their conversation is above. Below is a transcription, edited for readability.

Describe the situation related to household income in the city of Detroit.

In an examination of household income in Detroit, Michigan versus other peer cities – Chicago Pittsburgh, Buffalo, Milwaukee, Minneapolis – you’re going to find that the real median income for households in Detroit is lower than almost all of those other cities.

Not only is it a matter of income.  When you look at relative house values, which is a way that many people use to develop wealth, Detroit doesn’t fare well by either one of those metrics. Detroiters, unfortunately, have relatively lower incomes than other peer cities, and we have home values that are lower. Since home values are a way that many people create wealth in their households, those abandoned structures out there represent the absence of wealth.

Can we say what amount of federal money comes in directly related to low-income housing for the city of Detroit?

The city receives about $37 million worth of annual funding from HUD. We’ve got about 3,700 units of public housing in the city, and about 6,000 Section 8 vouchers, both of which are designed to create a safety net for residents of the city. Almost all of those dollars are allocated to activities that, either through economic development or through the provision of affordable housing services to people that are homeless, are directly designed to serve low-income Detroiters.

Tell me a little bit more about the federal programs. Are they anti-poverty or are they addressing the symptoms of poverty?

It depends. You can either look at those things as sort of a launch pad, or you can look at them as sort of a safety net, right? So, I think the idea is to create programs to really be a launch pad for Detroiters.

The profile I would give you would be the entitlement resources the city receives directly, as I mentioned. It’s about $37 million and it’s in community development block grants, which is a very flexible resource that the city can use for many, many things associated with everything from public improvements of public facilities to things like the Neighborhood Opportunity Fund where council and the city identify great community groups to fund who are doing great work in their communities.

Again, it all has to be direct investment in affordable housing and economic development that’s going to cause job production for low and moderate income people. About 67 percent of people in the city are low and moderate income people. So it’s a very flexible resources the Council and the City make decisions on how to allocate together.

Separate from that is another program called HOME which is exclusively for the investment of money into affordable housing development. So Strathmore, by way of example, as well as a number of other developments around the city, have used HOME. That’s the reason why those developments have affordability components.

The next program is called the Emergency Solutions grant. It is a program designed to end homelessness. It’s everything from funding shelters to rapid rehousing. [The program involves] taking people who are temporarily homeless and immediately re- housing them using cash from this program or in partnership with organizations like Detroit Housing Commission or HAND, which focuses on supporting Detroiters experiencing homelessness. That’s specifically for fighting homelessness.

Finally there’s a program called Housing For People with AIDS. That’s smaller amount of money, about $2 million, that we use to provide vouchers or other resources for people who AIDS who need housing.  

There’s another part of it as well, which is the money that comes into the city through the Housing Commission. So the Housing Commission also has a business relationship with HUD. where they receive an operating subsidy for every unit that they operate in the city, and that’s about 3,700 units, and then they have a capital budget which they use to improve public housing developments around the city on an annual basis.

So between both of those categories, stuff that we receive, stuff the Housing Commission receives, it’s a pretty robust set of dollars.

The final sources of dollars to fight poverty that comes into the city is something they call community service block grant funding. Community action organizations are a category of organizations in the city. Most cities in the state build an equal opportunity office as part of health and human services, and they fund activities that are deliberately and specifically supposed to fight poverty through development of individual enrollment accounts, or IEAs. Often those organizations will use LIHEAP – Low Income Home Energy Assistance Programs to help people with household bills related to energy and weatherization. Often those organizations often have a footprint in homelessness as well.

With all these programs out there, why does poverty persist?

For many years, the efficacy of these programs has not necessarily been very well-measured.  I think to some degree it’s been even more predominant [in Detroit]. But the trend is to measure: what’s the efficacy of what we’re doing, and are we spending our money right, are we getting real results that are measurable and tangible and we can actually see. I think people in this field haven’t always done a good job with that.

The other thing that’s tough about it is that parts of it are very hard to measure, right? I mean, how do you measure the impact of having a below-market rent on your ability to get great employment, generate wealth in the form of home ownership or some other method? It’s hard for people to really to quantify that. But increasingly people are quantifying, and I think that’s got to be the wave of the future. It’s the way I think we’re trying to govern.

The mayor has been very explicit with me and other members of the jobs and economy team about developing a set of metrics to demonstrate our success, or lack thereof, in moving the ball on poverty. I think that’s the right way to go. I’ve been at the state level, and I’ve been at the city level, and this is where the rubber hits the road. These are our corners, these are our residents and citizens and neighbors in a way that’s not true for the state or for the federal government. This is where it happens, and I think having a metric-guided approach is the way we’re going to figure out how to solve it.

But to your question, it’s a tough thing to weed out. It has a lot to do with stabilizing and stopping a free-fall, actually causing there to be human capital growth and knowledge growth and educational attainment, the stuff that leads to more choices and more economic strength.

Within the city administration now, is there a philosophy on an approach to poverty? How does your work fit in with what’s going on in other city departments and the mayor’s office?

That’s an interesting question. I think the way the mayor has looked at this with me so far is to say either the things we’re doing in housing are a launch pad for low-income households or they’re a safety net, and I want them to be a launch pad. You want someone to move into an affordable housing unit in our city, have a stabilized place to live that’s safe and access to jobs and transportation and school. You want that to be a base from which they get further education or find a new job. I think that’s the direction that we’re going. I’m trying to make investment decisions that are targeted at rooting that out. So that’s the poverty on a personal level in Detroit neighborhoods question.

There’s also a poverty of the city question, and I think to that end, another direction the mayor has been directing me is to address retainment. If you want to grow the population of the city, you have to retain and you also have to attract. And retaining means giving people a reason to associate their success with our city.

With the housing resources and other resources of the government, I can put together a plan to move forward and have that plan be strong enough for people who are here, and for new people to come and say they want to be here. Today, the situation that we are inheriting, I don’t know if people would say that. I think they’d say quite the opposite. People perceive it to be urgent to get out of Detroit in order to have the kind of success they want. We’re trying to use that portfolio of services and dollars that I described, which are not insignificant, to make a dent in that.