Title
Resolution to Amend the Ann Arbor Affordable Housing Fund Guidelines
Memorandum
Staff are recommending amendment of the Ann Arbor Affordable Housing Fund Guidelines (“Guidelines”) to clarify eligible project types and requirements for pre-development and technical assistance grants.
As stated in the Guidelines, the purposes of the Ann Arbor Affordable Housing Fund include the creation and preservation of long-term affordable housing for households with incomes at or below 60% of the City's Area Median Income; to improve housing conditions for City of Ann Arbor residents, with priority given to those whose income is at or below 30% of the median household income; to provide a full range of housing opportunities to all City residents; and to administer the Fund in a flexible manner in order to best meet the housing needs of the City.
In May 2025, City Council approved amended Guidelines designating the Ann Arbor Housing Development Corporation (AAHDC) as the administrator of the Affordable Housing Fund, which is staffed by the Ann Arbor Housing Commission. The AAHDC received a request from MISSION, a local nonprofit that provides shelter and services to unhoused people, for predevelopment funding to explore a development of small homes on their property on Stone School Road. Due to site constraints, MISSION is exploring a development including small homes with private sleeping and living spaces and communal kitchen and sanitary facilities.
The Ann Arbor Affordable Housing Fund Guidelines as drafted require all projects to be “decent, safe and sanitary and meet the Housing Quality Standards or similar standards as established by HUD and the local Code,” reflecting a prior expectation that all projects would be HUD-funded and subject to HUD requirements, which potentially excludes financial support for developments that provide common kitchen and sanitary facilities. Due to the high need for habitable places and the Guidelines’ stated goal to provide a full range of housing opportunities, staff are recommending that this section of the policy be updated to clarify that the type of project that MISSION is proposing is eligible for funding.
In addition, staff are recommending the Guidelines be updated to clarify the types of projects that require an affordability restriction. The policy currently states that “When funds from the Affordable Housing Fund are awarded for acquisition, construction, or rehabilitation, the owner must sign an enforceable affordability agreement and/or deed restriction relating to the long-term affordability of the unit.” The policy also allows nonprofits to apply for pre-development and technical assistance grants up to $100,000.00, but is silent whether these grants require an affordability agreement or deed restriction.
Typically, these grants occur when a project is in the feasibility stage and construction of the project is not yet assured. These funds are intended to assist the nonprofit to complete due diligence such as a survey, environmental testing, site assessments, zoning review etc. to determine if the project can move forward to completion. Consequently, it was not intended that a predevelopment grant or technical assistance grant require an affordability agreement or deed restriction. If the project is feasible and does move forward, the nonprofit can request funding for acquisition, new construction and/or rehabilitation, which would then require an affordability agreement or deed restriction. Language was added to the Guidelines to clarify these requirements.
Staff
Prepared by: Jennifer Hall, Executive Director Ann Arbor Housing Commission
Reviewed by: Marti Praschan, Chief Financial Officer
Derek Delacourt, Community Services Area Administrator
Christopher Frost, Senior Assistant City Attorney
Approved by: Milton Dohoney Jr., City Administrator
Body
Whereas, The Ann Arbor Housing Development Corporation, staffed by the Ann Arbor Housing Commission, was designated by the City to administer the Ann Arbor Affordable Housing Fund in May 2025; and
Whereas, The Ann Arbor Housing Development Corporation has received several requests from nonprofit entities for pre-development and technical assitance grants and is recommending that City Council approve language clarifying eligibility for such grants and when affordability or deed restrictions are required;
RESOLVED, That City Council approves the attached amended Ann Arbor Affordable Housing Fund Guidelines; and
RESOLVED, That the City Administrator is authorized to take all appropriate actions to implement this resolution.