The Federal Home Loan Bank of Indianapolis may be headquartered in Indiana. Still, its district includes both Indiana and Michigan, where cities across the region benefit from partnerships between the bank and various community-based financial institutions and philanthropic organizations. The bank is making sure that Detroit is no exception.
The bank is part of the national Federal Home Loan Bank system, which provides access to liquidity to its financial institution members - banks, credit unions, insurance companies, and Community Development Financial Institutions – to ensure funding is available to the communities they serve.
FHLBank Indianapolis returns 10 percent of its income to communities throughout Michigan and Indiana in the form of affordable housing grants.
Since 1990, that has translated into more than $295 million in affordable housing grants to communities throughout Michigan and Indiana to make real and substantive change, says Mary Beth Wott, Community Investment Officer with FHLBank Indianapolis.
The city of Detroit has an established relationship with the bank, and these ties are being strengthened through the bank’s enhanced focus on the city. As a result, bulldozers turning dirt and construction crews pounding nails will become much more familiar sights throughout some of the most vulnerable areas in the Motor City.
The strategic focus on the largest city in Michigan has resulted in a few changes for FHLBank Indianapolis, including hiring Anna Shires as the bank’s Detroit Community Investment Outreach Partner. In her previous job with the city’s Housing and Revitalization Department, she led a team charged with investing federal and local dollars to preserve and build affordable housing.
“I knew of the bank’s efforts and the grants that communities on the west side of Michigan were receiving,” Shires says. “I also learned that a Detroit-based project had not been awarded funding through the bank’s Affordable Housing Program since 2014.”
This has started to turn around. With targeted outreach efforts in 2020, the bank awarded nearly $2,000,000 to four affordable housing development projects across the city. Last year, the bank also awarded more than $800,000 in grants
to Detroit’s small businesses and low-income homeowners looking to buy a home or make repairs to the one they already own.
Detroit-area FHLBank Indianapolis member financial institutions partner with local developers to bring these affordable housing grants to life, often with their own skin in the game.
These grants are part of the bank’s multi-faceted approach to its investment in Detroit.
FHLBank Indianapolis plays a significant role in addressing the issue of affordable housing in Detroit, says Jermaine R. Ruffin, Associate Director for Equitable Planning & Legislative Affairs, City of Detroit-Planning & Development, and a member of the bank’s Affordable Housing Advisory Council.
Jermaine Ruffin, at left, and Anna Shires, at right, discuss the bank's involvement in the city of Detroit during a visit to the East Warren neighborhood.
Photo by Nick Hagen
Having access to these financial resources comes when construction costs are increasing because of shortages in building supplies and materials as a result of the pandemic. This leads to the need for additional capital for projects that may not generate sizable returns, especially if they fall into the affordable housing category.
Ruffin says federal dollars which may have been secured for these projects have been cut back. In a post-COVID world, he expects resources to come back, but not at levels that the city could count on within its planning process or implementation pieces.
Ruffin calls this a “sign of the times right now,” but he says the importance of access to affordable housing, whether multi-unit or single-family, cannot be highlighted enough. He says that FHLBank Indianapolis is making it possible to take on critical areas of the city by stepping up, something city officials don’t like to do without having an aligned investment strategy.
“When you have an environment where you can provide healthy and secure housing to everyone, it creates an environment where folks can concentrate on other things, sustainable jobs will increase, and there will be a stable environment for kids to take advantage of their educational opportunities,” Ruffin says.
There’s no doubt in the minds of FHLBank Indianapolis’ leadership that home ownership offers the opportunity to build generational wealth while also giving children a sense of stability. So, in addition to providing large grant awards for significant affordable housing projects, the bank provides a down payment assistance grants that directly support first-time low-income homebuyers. To support this, the bank works with member financial institutions to connect homeowners with a vast network of experts and resources to provide training in areas including financial literacy training to ensure success, Wott says.
FHLBank Indianapolis is also targeting efforts towards residents living within ten neighborhoods identified by city leaders. Wott says these neighborhoods are considered low-income with the potential to experience a resurgence – not gentrification – with the proper levels of financial support.
“We’re really focused on homeownership, neighborhoods, and having people living in the city,” she says.
These ten neighborhoods selected are viewed as ‘tipping point’ neighborhoods, Ruffin says.
“They have good bones and community and resident support around being revitalized. So in all of these areas, we’ve chosen to look for a non-profit and philanthropic partner that could be naturally attached,” Ruffin says.
Supporting Organic Neighborhood Growth
A partnership between the bank and one of the nine neighborhoods identified by the city is already yielding reasons to be excited about what’s already there and what’s next, says Joe Rashid, Executive Director of the East Warren Development Corporation (EWDC).
A growing number of retail businesses and restaurants are locating in the East Warren neighborhood because of work underway that is creating an eclectic and vibrant are within the city of Detroit.
Photo by Nick Hagen
According to Rashid, before establishing the EWDC, there wasn’t much commercial development being facilitated in the E. Warren neighborhoods of Morningside, East English Village, and Cornerstone Village.
“The focus is on bringing back commercial business and retail along that corridor,” he says.
When Rashid’s work with the neighborhood began in 2017, the area’s commercial corridor was at 36 percent occupancy. He says it’s now closer to 50 percent.
“We have done that through neighborhood-based site control and figuring out ways to give neighbors the ability to purchase the property,” Rashid says. “We’re helping to navigate residents through the process of buying property. About 50,000 square feet of retail is owned by neighborhood residents, and we’re working with the city on identifying tenants for city-owned buildings.”
This is being done through partnerships with organizations, including Invest Detroit.
The partnership with FHLBank Indianapolis evolved during the heart of the COVID-19 pandemic in October 2020, when the bank selected EWDC to participate in its 2020 Community Mentors Program for Michigan. The program includes a one-day planning session with community residents and a $10,000 implementation grant. EWDC used the program to focus on three core buckets.
“They gave us a planning grant to be able to look at quick wins,” Rashid says of FHLBank Indianapolis. “Essentially, we looked at what are the things the neighborhood is saying they want to see and how can we show momentum for what’s being built along the corridor and how can we make sure people feel heard. This all about business support and community healing.”
Neighborhood planning meetings established a good framework of what the community most wants. For example, Rashid says that while many residents brought up coffee shops, the number one request was for a neighborhood grocery store, international food shop, or co-op to meet their daily food shopping needs. He says there also was a discussion about the need for greater diversity in sit-down restaurants.
Future businesses will join businesses already there, including Craft Café Detroit, a craft-based painting and event space; ZAB, a cultural collective and artist space that supports arts and culture; and Bike Tech, a neighborhood fixture for more than 40 years.
Among the “quick wins” is a farmer’s market located on land that formerly housed a Pizza Hut restaurant that began in 2020 and runs every Thursday through September 30th. Rashid says efforts like this are important because they are tangible evidence of the EWDC’s work in the neighborhood.
Following the Community Mentors program, EWDC has been able to leverage additional opportunities, including a digital marketing training program in conjunction with Michigan Women Forward and Kanopi Social and fitness activities offered by Brilliant Detroit. Rashid says they also have received support from the Ford and Kresge foundations.
“Every neighborhood in Detroit is unique. We’ve got such good bones along with East Warren, and we just needed someone to facilitate development,” Rashid says. “We want to make sure that the businesses coming to East Warren really reflect the neighborhood. Collaboration is the name of the game. When you’re a small non-profit, you can leverage all kinds of relationships to make this happen.”
Connecting with Detroit
“One thing I learned as I traveled to Detroit and had these meetings with our community stakeholders is that they all said the programs are great, but there was no one on the ground facilitating those connections,” Wott says.
She says bank leadership was aware of the needs in Detroit and people who were passionate about the work and the role that FHLBank Indianapolis could play.
“That kind of conversation began in late 2018. We decided to have a strategic focus in Detroit,” Wott says. “I spent a lot of time in 2019 visiting the city. We were asking questions about who the key stakeholders are in Detroit, and we listened to what their needs are. What we learned is that we have the right programs, but we’re just not in Detroit.”
Firmly establishing the FHLBank Indianapolis community investment programs in Detroit has involved the use of Shires’ connections with developers and institutional knowledge of the city’s affordable housing situation and the bank’s connections with other financial institutions throughout Michigan and Indiana.
Ruffin says Shires has raised the knowledge level of developers and non-profit organizations about the resources the bank offers.
“Folks didn’t realize resources out there,” he says. “The bank has looked for different ways to leverage investment as well as technical resources. They’ve come in and on multi-family affordable housing projects as a financial gap filler and also have dedicated staff now in the city.”
“Development teams, small businesses, and community partners need to work with our members to access these grant dollars, so helping establish partnerships is a critical piece in supporting the city’s community efforts,” Shires says.
FHLBank Indianapolis’ presence at the table provides a level of comfort for organizations to know that they can partner with others in the community. In addition, Ruffin says the city’s partnership with the bank has raised the profile of what Detroit is trying to do on the affordable housing front.
This is part of the Block by Block series supported by FHLBank Indianapolis that follows minority-driven development in Detroit.