Detroit housing tax breaks: Council flips votes on two PILOT deals

Two Standard Workforce Housing PILOT applications were approved by the Detroit City Council on Tuesday. The incentives cover developments in Midtown and the area near Eastern Market and Downtown. The council originally rejected both proposals during the previous week's session. The reversal occurred after the issue consumed substantial time during the last two formal meetings. Council Member Scott Benson moved to suspend a rule that permits members to reconsider votes. The goal was to ensure the measures would pass without further delay.

PILOTs, or Payments in Lieu of Taxes, serve as tax incentives designed to support the growth of affordable and workforce housing. The mechanism allows developers who invest a minimum amount of capital in a property to pay a percentage of the rents collected from tenants instead of the full property tax bill. This structure helps keep rents lower. Without such relief, rising property taxes often force landlords to increase rents, which can price residents out of the area. Chase Cantrell, executive director of the development nonprofit Building Community Value, stated that PILOTs encourage people to move in or stay, thereby bringing needed wealth diversity to a neighborhood.

The specific instrument used here is the Standard Workforce Housing PILOT. It targets housing for middle-income or moderate-income households. Typical residents include teachers, firefighters, bus drivers, and nurses. The framework exists because Michigan housing legislation, known as PA 239, passed in 2022. This state law allowed cities like Detroit to create their own ordinances for workforce housing. Detroit City Council subsequently adopted a PILOT ordinance in 2024.

The council will discuss the issue again at its next Budget, Finance and Audit Committee meeting. The session is scheduled for 1 p.m. on Tuesday, October 28. Attendees can join the meeting online or in person at CAYMC. The agenda items for the discussion are available for review. The outcome of this committee meeting will determine the next step for the tax relief measures.

The shift in council votes follows a period of contention over how to approach middle-income housing development relief. The two projects in question have been central to the debate. The approval of the PILOTs allows the developers to proceed with their tax incentive structures. The council's action represents a change from the previous week's rejection of the same applications.