Title
Resolution to Direct the City Administrator to Evaluate Bonding Affordable Housing Millage Revenue
Staff
Reviewed by: Jennifer Hall, Executive Director, Ann Arbor Housing Commission
Michelle Landis, Senior Assistant City Attorney
Body
Whereas, In 2015, the City of Ann Arbor partnered with the U.S. Department of Housing and Urban Development and Washtenaw County to produce the Housing Affordability and Economic Equity Report ("Report");
Whereas, The Report highlighted that housing in Ann Arbor has become unaffordable for 45% of households earning $35,000-$49,999 a year, 87% of households earning $20,000-$34,999, and 94% of households earning under $20,000;
Whereas, The Report recommended a goal that called for the creation of 2,787 new affordably priced rental units by 2035, and since 2015, Council has approved over 200 affordable housing units with another 300 in the pipeline;
Whereas, The National Association of Home Builders reported in May 2023 that on a year-to-date basis, combined single-family and multifamily housing starts were 29.5% lower in the Midwest, due to increased construction, transportation, and energy costs;
Whereas, The Ann Arbor Housing Commission (AAHC)'s housing construction costs (like other housing developments) have increased by over 50% since 2019 due to labor shortages, material cost increases and supply chain disruptions;
Whereas, Affordable housing developments are funded with debt, equity and grants and as the cost of debt increases (construction and long-term), it is harder to finance affordable housing projects;
Whereas, Bond financing is a potential tool to provide longer term, lower interest debt than a loan from a private financial institution;
Whereas, The Affordable Housing millage may be leveraged to pay back bonds directly or as credit enhancement to improve the terms of the bond;
Whereas, The Ann Arbor Housing Commission is currently evaluating how it can use bond financing to fund affordable housi...
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