What Is LIHTC? A Plain-English Guide to How Affordable Apartments Get Built in Detroit

Affordable housing is not created by one funding source, one agency, or one construction crew. It takes vision, patience, public-private partnership, and a financing model that can turn a vacant building or an empty lot into a safe, beautiful home.

In Detroit, one of the most important tools for making that transformation possible is LIHTC: the Low-Income Housing Tax Credit.

In one sentence: LIHTC is a federal program administered in Michigan by the Michigan State Housing Development Authority (MSHDA) that provides tax credits to developers who build or rehabilitate rental housing for low- to moderate-income households, with affordability maintained for at least 30 years.

That may sound technical. But the outcome is deeply human: more families, seniors, veterans, teachers, nurses, service workers, and retirees can find a quality apartment they can afford.

And right now, the impact is visible across Detroit and throughout Michigan.

Why LIHTC matters in Detroit right now

In June 2026, Michigan announced nearly $19 million in federal 9% LIHTC awards supporting 603 new affordable rental units across 13 developments in nine communities. The awards will serve families, seniors, people experiencing homelessness, and residents who need permanent supportive housing.

One of those projects is Alice Birney Townhomes on Detroit’s west side. The development received a $1,407,640 9% LIHTC award to create 52 affordable one-, two-, and three-bedroom homes. The units will serve households earning 30%, 50%, and 60% of Area Median Income, or AMI.

That is what LIHTC housing looks like in practice: not an abstract tax policy, but 52 future homes where people can build stability, raise children, and remain connected to their community.

You can read the full announcement from MSHDA.

How does LIHTC financing work?

The simplest way to understand LIHTC is to think of it as a partnership between government, developers, investors, lenders, and communities.

Here is the basic process:

This is the financial model behind many successful affordable housing Detroit projects. It is complicated, but its purpose is straightforward: use public incentives to attract private investment and create homes that remain affordable for decades.

That is the trifecta: public policy, private capital, and community benefit. When the pieces come together, everybody wins.

Who qualifies for LIHTC housing?

LIHTC apartments are reserved for households within specific income limits based on Area Median Income, or AMI.

AMI is calculated for a particular metropolitan area and adjusted according to household size. That means the income limit for a one-person household will differ from the limit for a family of four, and the limits can change annually.

LIHTC apartments may be designated for households earning:

• 30% of AMI

• 50% of AMI

• 60% of AMI

• In some developments, other income levels may also be included

A resident does not necessarily need to have no income to qualify. Depending on the property and the income tier, LIHTC housing may serve:

• Teachers and school employees

• Nurses and health-care workers

• Restaurant and service workers

• Retirees living on fixed incomes

• Veterans

• Families with children

• Seniors

• People with disabilities

• Residents transitioning from homelessness

The important point is that eligibility is based on household income and the specific property’s program requirements: not on a single statewide dollar amount.

If you are looking for low income housing in Detroit, contact the property directly and ask about current income limits, rent levels, waitlists, required documentation, and available apartments. Each community may have different unit sizes, restrictions, and application procedures.

Historic buildings can become affordable homes again

Detroit’s affordable housing story is also a story of historic preservation.

Across the city, long-vacant buildings are being brought back to life. In 2026, the reopening of Rohns Apartments added 17 affordable homes on Detroit’s east side. The restored 1920s brick building includes one- and two-bedroom apartments, updated kitchens and bathrooms, central air, in-unit laundry, secure parking, and green space.

In Virginia Park, Weston Hall reopened as a 47-unit all-affordable “smart” apartment building after sitting vacant for approximately two decades. The 101-year-old building combines preserved historic character with modern technology and resident services.

These projects use different financing strategies, but they demonstrate the same principle: Detroit’s older buildings are not obstacles to progress. They can be catalysts for it.

At Shelborne, we have seen that potential firsthand.

Shelborne Development’s LIHTC experience

Our commitment to affordable housing began long before today’s headlines.

Shelborne founder Kathy Makino-Leipsitz began investing in Detroit-area rental housing in the late 1970s and purchased her first Detroit apartment building in 1983. In 1995, Shelborne completed its first LIHTC project: a 60-unit new construction development in Westland, Michigan.

That first project became the beginning of a long-term mission. Since then, Shelborne has completed 22 LIHTC projects totaling more than 1,300 affordable housing units across Michigan.

Our work includes the rehabilitation of vacant historic multifamily and mixed-use properties, as well as new construction. We focus on creating homes that are safe, attractive, durable, and connected to the neighborhoods around them.

You can explore our current projects or learn more about Shelborne’s history and approach.

We also believe sustainability belongs in the affordable housing conversation. Energy-efficient systems, thoughtful building reuse, and environmental technologies can reduce operating costs and improve comfort for residents. Our work on sustainability and affordable housing reflects that commitment.

This is long-haul housing: not a quick flip

LIHTC development requires years of planning, applications, underwriting, construction, inspections, compliance, and property management. It is not a quick transaction.

That is precisely why experience matters.

A developer must understand construction costs, investor expectations, MSHDA requirements, historic preservation standards, environmental reviews, neighborhood priorities, and the everyday needs of residents. A project must look beautiful on opening day: but it must also perform well years later.

Affordable housing is a long-term promise. The buildings we create today should support residents, neighborhoods, and future generations for decades.

That promise is especially important in Detroit, where the need for stable, high-quality housing remains urgent. What happens when a nurse can afford to live near work? When a retiree can remain in a familiar neighborhood? When a child grows up in a well-maintained home instead of moving repeatedly because rent keeps rising?

These are not merely financial outcomes. They are outcomes of dignity, pride, health, and opportunity.

The future of affordable housing in Detroit

Michigan’s 2026 LIHTC awards show that progress is possible: but also that competition for funding remains intense. We need more creative partnerships among developers, nonprofit organizations, local governments, lenders, residents, and state agencies.

We need to preserve historic buildings where preservation makes sense. We need to build new homes where new construction is the right answer. We need energy-efficient design, accessible apartments, supportive services, and financing structures that keep housing affordable over time.

Most of all, we need to remember who the numbers represent.

The $19 million in tax credits represents more than an allocation. The 603 units represent more than a construction pipeline. Alice Birney Townhomes represents more than 52 apartments.

Each unit is a door. Behind that door is the possibility of stability, belonging, and a better future.

If you are a prospective resident searching for affordable apartments in Detroit, we encourage you to contact Shelborne Development and explore available housing opportunities. If you represent a nonprofit organization, municipality, or public agency, we welcome conversations about community-based development partnerships.

We are grateful to the residents, public agencies, nonprofit partners, investors, contractors, and neighbors who make this work possible.

Together, we can transform vacant properties into beautiful communities: and make sure more Detroit families have a safe, affordable place to call home.