MiDCIF- a pathway to new residential construction in Detroit?

• In Event: Asset-Building Polices, Economic Security, and Individual Development Over a Life Course

Abstract

This paper will identify learning opportunities and challenges associated with seeking tobuild new residential housing in a de-industrialized and dis-invested community. It will serve asan example of the extortionary investment of time and resources necessary to go aroundsystemic barriers to community-led redevelopment.

MiDCIF is a diversified community investment fund shaped with inspiration by long standingresearch by the National Coalition for Community Capital. The goal of MiDCIF is to unlockinvestment capital from retail (non-accredited) investors, and in-turn use that capital tooriginate new construction activity in a 1.3 square mile area in Southwest Detroit.

For decades, the City of Detroit has been economically segregated from the surrounding region.In 2019, about 2/3 of the city had no functioning residential mortgage marketplace. Thisimproves slightly by 2022, but overall the market does not function similarly to near andadjacent suburbs.

Community engagement has shown there to be strong interest in learning how to utilize a realestate investment fund to support redevelopment of the community in a way that is directlyinformed by said community. Further, the fund offers community members investment equityas shareholders. Proposition: if the class A preferred shareholders are community members in alow/moderate income community, then they should have the lowest investment threshold andthe highest potential return on their investment. Three classes of shares, based on definedgeographies will be offered via a Michigan-based MILE Act equity crowdfunding raise.MiSide (formerly Southwest Solutions) is a long-standing community development organization(CDO) that has led the formation of the East Chadsey Condon Alliance (ECCA). ECCA is made upof several prominent CDOs. Together, they have canvassed the over 600 households, andconvened planning meetings, focus groups, and other community engagement and leadershipdevelopment opportunities. Utilizing philanthropic grants, MiSide has done the administrative,legal and site development research necessary to begin construction of new homes in 2026.The capital access, bureaucratic, and administrative burden of this work cannot be understated,and is a clear example of the structural economic challenges that Detroit has faced as a city.

Authors

• David Palmer, Kite and Key Partners
  Presenting Author

• Patrick Meehan, University of Michigan
  Non-Presenting Co-Author

• Alexandra Jane Makohn, MiSide
  Non-Presenting Co-Author