This article is part of The Low-Rent Trap, a series about the city’s largest provider of affordable housing. Read other stories in the series here.
Laza Bruce was ecstatic when she found out the Village of University Meadows in Detroit’s Woodbridge neighborhood had an apartment ready for her. Bruce, 65, is on a fixed income and had been looking for an affordable place to live for over two years. She paid nearly $1,000 a month on rent and utilities at her previous home in Harper Woods. In 2021, she was able to move into University Meadows where she pays $227 a month, 30% of her monthly income.
“When I got the letter, I started crying,” Bruce said. “Before, I was just living to pay the bills.”
Bruce loves her current home. She says it’s clean, safe and well managed. It’s not luxury housing, but she feels like she won the lottery.
The change has improved her quality of life. She now has extra spending money and said she was able to buy Christmas presents for her grandchildren for the first time in years.
“It was like jumping from being homeless to being rich,” Bruce said.
There are hundreds of these kinds of modern, well maintained apartments in Detroit like University Meadows reserved for low-income, disabled or older adults. They’re kept affordable because public housing authorities give some vouchers to private building owners to subsidize the rent for a certain number of tenants in the building.
The Detroit Housing Commission (DHC) manages the vast majority of these vouchers in Detroit. But many of the units it subsidizes are vacant, even as people like Bruce wait for them.
Developers and landlords who work with the DHC say the commission is squandering quality units ready for some of the city’s neediest tenants. It’s also costing these landlords money because they can only collect the rent and subsidy when the apartment is occupied.
The DHC’s vacancy rate for these apartments is more than twice as high as the national average and three times higher than the state average. More than 30% of all unused vouchers of this kind in Michigan sit with the DHC.
The problem certainly isn’t with demand. The DHC told Outlier there are currently more than 14,000 households on the waitlist for these vouchers, though that may include applicants who do not qualify for the program.
It’s not just the apartments owned by private developers sitting empty, either. Hundreds of apartments and homes owned by the DHC are also vacant. These vacancy rates are well below standards set by the U.S. Department of Housing and Urban Development (HUD), which oversees all public housing authorities.
A recent investigation from Outlier Media found the physical condition of DHC buildings has greatly deteriorated in recent years. Even so, thousands of renters sign up and sit for years on waiting lists for these properties, desperate to get into any place they can truly afford.
The DHC had 792 vouchers like this available, almost all of them in Detroit, as of March, the most recent month for which publicly reported data is available. Almost one-quarter of the vouchers were not being used. The Ann Arbor Housing Commission and Grand Rapids Housing Commission, which administer similar numbers of vouchers, had a 5.1% and 6.8% vacancy rate, respectively.
DHC spokesperson Mark Lane, senior director of 98Forward, said 43 of the 189 unused vouchers included agreements where leasing hadn’t started yet. He added that the DHC will sometimes negotiate with developers to pay for some loss caused by vacancy.
Sandra Henriquez, CEO of the Detroit Housing Commission, acknowledged problems with the program when Outlier presented the data to her, but said the situation has improved in recent months.
“I would have agreed with that assessment in the past,” Henriquez said, “but I wouldn’t agree with it now.”
She said DHC staff has regular meetings with “virtually every” developer accepting these vouchers to go over potential issues and how to resolve them. She added some of these properties have two-bedroom units that are harder to fill. And if a member of the household is under 62, they have to get a Medicaid waiver which can take months.
Developers who spoke with Outlier both on and off the record said unit size was not the primary issue, but rather the time it takes for the DHC to approve tenants. Presbyterian Villages of Michigan (PVM), based in Southfield, is a nonprofit provider of senior housing. It owns University Meadows and two other properties in Detroit that accept these vouchers from the DHC.
“We have been extremely frustrated for a long time that we have had vacant apartments at all three of these developments,” said President and CEO Roger Myers. “We know there is a huge need in the community. People are looking for quality, affordable housing. But we have, up until now, not been able to come up with sustainable solutions that allow these apartments to be used in the way they were intended.”
Myers said that there have consistently been 10 to 15 vacant apartments at PVM’s properties because the DHC can’t process tenants quickly enough.
A more reliable option for affordable housing
The financing tool used at these developments is called a project-based voucher, and it’s generally considered by experts and policymakers as a reliable way for public housing authorities like the DHC to house low-income renters.
Tenant-based vouchers, also known as Section 8 vouchers, stay with the individual or household. The vouchers afford recipients more flexibility. However, not all landlords accept these vouchers, so they can be challenging to use.
Project-based vouchers are different and allow developers to concentrate services in a single property for people who need them, like older or disabled adults. They are tied to units in specific buildings where the owner has entered into a long-term contract with the housing authority. If the tenant leaves, they don’t get to take the voucher with them.
Housing authorities have greatly expanded their use of project-based vouchers from around 25,000 in 2015 to just under 290,000 this year.
The process for filling these apartments should be straightforward. When there is an available apartment at one of these developments, the property manager lets the housing authority know. The housing authority then provides the property owners with a list of applicants. The property manager selects an eligible tenant, who then fills out paperwork verifying income and other relevant information. As a last step, the housing authority determines the amount of rental subsidy.
In theory, this could take a matter of days or weeks. In practice, it can take much longer for the DHC.
LaDonna Holley is a senior vice president at PVM. She said other public housing authorities will provide her with a handful of pre-screened applicants to contact when there’s a vacancy. In contrast, the DHC instead sends a long list of tenants that might not be eligible for the apartments. Holley said the DHC gave a list of 149 names for several vacancies earlier this month — all of whom PVM needs to contact and screen — even though many are unlikely to qualify for the apartment.
That’s just the beginning of the delays. The lack of pre-screening means “no DHC paperwork has been completed,” Holley said. Once PVM finds someone, it can then take several months for the DHC to process an applicant’s paperwork.
“We send everything over to the DHC and then it gets stuck,” Holley said. “It takes them three, four months or longer to get the information that’s needed.”
Sometimes, PVM loses out on a tenant while screening tenants. Then the process has to start all over again.
The DHC said in response that PVM’s own eligibility requirements contribute to delays and that it works in conjunction with developers to determine eligibility.
A systemic problem
Holley said that PVM has offered several different strategies to speed up processing applicants, including taking more of a role in processing the DHC’s tenant paperwork, though it is not PVM’s responsibility, and even hiring a dedicated staffperson to work just with the DHC. But all their overtures haven’t worked.
“It was an extraordinary offer,” Myers said of hiring an additional staffperson, “but it wasn’t accepted.”
One manager at a nonprofit that accepts project-based vouchers would only speak to Outlier on condition of anonymity because they didn’t want to put the vouchers at risk. They said many developers have struggled with the DHC’s voucher program.
“It’s not just Presbyterian Villages, it’s a systemic problem,” the manager said. “It seems there’s not enough manpower at the DHC to properly operate the program as well as it should be.”
The Ann Arbor Housing Commission (AAHC) uses a similar number of vouchers as the DHC and has a vacancy rate of just 5.1%. AAHC Deputy Director Weneshia Brand said whenever there’s a vacancy, it pre-screens five to seven applicants before sending their names to property managers. They also accept affidavits for certain requirements while paperwork is being completed.
PVM accepts vouchers in other parts of the state from other housing authorities. Holley said it hasn’t been difficult to fill apartments anywhere except with DHC vouchers.
“We have to do a whole lot better”
Vacancies aren’t a problem just at the private developments making room for tenants with DHC vouchers. Around 750 homes and apartments owned by the DHC are currently empty as well, according to HUD data. Its occupancy rate of 78% is substantially lower than the national average of 95% or even HUD’s requirements of 96%.
HUD and the commission’s own board are responsible for oversight of the DHC, but neither appears to be eager to hold it accountable for failing to meet some standards for housing agencies. HUD is aware that the DHC’s vacancy rate is higher than its requirements.
HUD also declined to make the director of its Detroit Field Office, Michael Polsinelli, available for an interview. But a spokesperson said, in general, under-leasing causes a housing authority to fail “management indicators.” HUD would then place that authority under a corrective action plan.
Outlier has directly and repeatedly asked whether the DHC was or is under a corrective action plan, either for the high vacancy rate or for the conditions of its public housing and failing housing inspections scores. HUD has not responded to these questions.
Nonetheless, the city’s low-income residents are desperate for a place because of the deeply affordable rent. The majority of the DHC’s project-based vouchers are reserved for older or disabled adults, whereas only a handful of its own buildings have any eligibility requirements beyond income.
Henriquez said there’s “no excuse” for the number of vacancies at the commission’s properties.
“I admit, we have to do better. We have to do a whole lot better,” she said.
According to the DHC, there are more than 12,000 households on the waitlist to get into buildings it owns.