Detroit council approves housing tax relief

Renters in Detroit’s Midtown and Eastern Market areas gained new housing projects Tuesday when the City Council approved two tax relief applications. The council approved the Standard Workforce Housing Payment in Lieu of Taxes, or PILOTs, for developments in those neighborhoods. This decision follows a contentious process that spanned two formal sessions.

The council initially voted down these applications last week. The debate consumed a large portion of the recent meeting schedule. Council Member Scott Benson proposed a procedural change to suspend the rule allowing members to reconsider their votes. He aimed to ensure the measure would pass more smoothly. The final vote on Tuesday secured approval for both projects.

PILOTs allow developers to pay a percentage of collected rents to the city instead of full property taxes. This structure is designed to keep rents lower for middle-income residents. Developers must invest a minimum amount in the property to qualify. The incentives help prevent property tax increases from driving up rents, which can price residents out of an area.

Chase Cantrell, executive director of Building Community Value, a development nonprofit, explained that these measures encourage people to move in or stay in specific neighborhoods. He noted that this brings needed wealth diversity to the area. The Standard Workforce Housing PILOT specifically targets households with moderate incomes. Typical residents include teachers, firefighters, bus drivers, and nurses.

Detroit adopted the current PILOT ordinance in 2024. This followed a 2022 change in Michigan housing legislation, known as PA 239. That state law allowed cities to dictate their own rules regarding workforce housing developments. The new local ordinances gave the council the authority to manage these specific tax incentives.

The council will discuss the issue further at its next Budget, Finance, and Audit Committee meeting. The session is scheduled for 1 p.m. on Oct. 28. Members of the public can attend in person at CAYMC or view the meeting online. The agenda items are available for review ahead of the session.