Creating Local Developer Capacity: Detroit

Crisis Response

In July 2013, the City of Detroit filed for Chapter 9 bankruptcy, the largest municipal bankruptcy filing in U.S. history by debt and population. This filing came after years of Detroit experiencing declining population and rising foreclosures and unemployment following the Great Recession; all contributing to reduced property values and property and income tax base.

In March 2014, Housing Partnership Network (HPN) was invited to visit Detroit to explore the potential to create a high-capacity affordable housing developer to spur the city’s neighborhood recovery and revitalization. A large, diverse coalition of organizations contributed to a serious exploration of this idea. The coalition included Mayor Duggan, the Ford and Kresge Foundations, and Quicken (now called Rocket Mortgage). The effort also relied on leadership from regional HPN member CDFIs (community development financial institutions) Capital Impact Partners, IFF and Cinnaire, who were committed to lending in Detroit but lacked a strong go-to development partner.

HPN developer members The Community Builders, Preservation of Affordable Housing, and the Cleveland Housing Network also engaged as each were exploring expansion into Detroit and saw the positive potential to partner with a locally based HPN entity that had the strong support of city government.

Collective Business Development

Much of 2014 was spent expanding this coalition of stakeholders to co-develop an initial business concept and plan. HPN’s core pitch was that this new entity would be a highly collaborative, nonprofit developer that would partner with the city, existing nonprofits, and funders to better leverage resources and scale the impact of the existing system and organizations. Detroit needed this type of high-capacity partnering organization – the classic HPN member – that played such an impactful role in other cities. Ultimately, HPN raised more than $7 million in start-up funding, a combination of grants, equity, and debt, to support the initial capitalization of Develop Detroit (DDI).

And in April 2015, Sonya Mays joined the HPN staff as DDI’s founding President. Sonya, a Detroit native, had joined the initial consulting team months earlier, after completing two years of work to stabilize the city under its federally designated emergency manager. “HPN was instrumental to the creation of vital partnerships in Detroit that enabled DDI, as a start-up, to quickly scale its development activity by leveraging the strength of the HPN member network,” Sonya Mays, President and CEO, Develop Detroit.