ONE CITY. FOR ALL OF US. STRATEGIC NEIGHBORHOOD FUND AFFORDABLE HOUSING LEVERAGE FUND

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2 ONE CITY. FOR ALL OF US. STRATEGIC NEIGHBORHOOD FUND AFFORDABLE HOUSING LEVERAGE FUND

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4 We are pursuing an urban redevelopment strategy unlike any implemented in America.

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6 5+YEAR West Village COMMITMENT INITIAL TARGET 3 NEIGHBORHOODS BLOCKS EACH PROJECTS IN EACH

7 GROWTH + INCLUSION Unique opportunity in neighborhoods Get ahead of the curve

8 Foster more vibrant, growing neighborhoods across the city Preserve all regulated affordable housing units Ensure that wherever growth occurs, it increases inclusion and reduces segregation

9 STRATEGIC NEIGHBORHOOD FUND & AFFORDABLE HOUSING LEVERAGE FUND

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14 LIVERNOIS- McNICHOLS SOUTHWEST / VERNOR ISLANDVIEW / GREATER VILLAGES

15 THE COE Three Neighborhood Aggregate SENIOR DEBT SERVICEABLE JUNIOR DEBT BORROWER EQUITY NON SERVICEABLE GAP TOTAL DEVELOPMENT COST PUBLIC GOOD INFRASTRUCTURE STRATEGIC NEIGHBORHOOD FUND $ 31,335,734 $ 22,125,122 $ 8,664,061 $ 24,515,696 $ 86,640,613 $ 6,000,000 $ 30,515,696

16 STRATEGIC NEIGHBORHOOD FUND JPMCHASE PRO NEIGHBORHOODS $ 5.0M REIMAGINING THE CIVIC COMMONS (KRESGE, KNIGHT, JPB, ROCKEFELLER) FORD FOUNDATION $ 1.0M HUDSON-WEBBER FOUNDATION JOHN S. AND JAMES L. KNIGHT FOUNDATION KRESGE FOUNDATION CDFI FUND RALPH C. WILSON, JR. FOUNDATION PHILANTHROPHIC GRANTS PROJECT SUBSIDY (HOME, CRP, ETC.) INFRASTRUCTURE (PARKS, STREETSCAPES, ETC.) TOTAL $ 4.0M $ 1.0M $ 1.5M $ 0.5M $ 0.9M $ 2.0M $ 16M $ 26M $ 42M PHILANTHROPIC PUBLIC SUBSIDY GOAL $30M IN THREE YEARS RAISED $42M IN TWO YEARS

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22 PHILANTHROPIC GRANTS CITY/STATE PRIVATE TOTAL INVESTMENT NEIGHBORHOOD PLANNING $ 0.6M $ 0.6M STREETSCAPES $ 1.0M $ 1.0M PARKS $ 1.0M $ 0.5M $ 1.5M SINGLE-FAMILY STABLIZATION $ 0.2M $ 0.5M $ 4.4M $ 5.1M COMMERCIAL CORRIDORS $ 4.9M $ 3.0M $23.0M $30.9M TOTAL $ 6.1M $ 5.6M $27.4M $39.1M

23 NEIGHBORHOOD PLANNING COMPLETED UNDER CONSTRUCTION BREAK GROUND WITHIN 12 MONTHS FUNDS ALLOCATED $ 8M $ 15M $ 49M $ 29M Liv6 Planning IVGV Planning Southwest Planning STREETSCAPES McNichols Kercheval Vernor SINGLE-FAMILY STABILIZATION PARKS Ella Fitzgerald Park Butzel Park Clark Park Fitz Forward IVGV Single Family Home Stabilization COMMERCIAL CORRIDORS The Coe 1400 Van Dyke St. Charles Kercheval 3 Kercheval/Van Dyke The Murray Hubbard/Vernor McNichols Plaza 7400 McNichols 7434 McNichols W. Grand/Porter 347 W. Grand 7303 McNichols McNichols Plaza II $ 101M IN TOTAL INVESTMENT

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30 Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q LIVERNOIS / MCNICHOLS SOUTHWEST / VERNOR ISLANDVIEW / GREATER VILLAGES GRAND RIVER NORTHWEST JEFFERSON CHALMERS RUSSELL WOODS / NARDIN PARK CAMPAU / BANGLATOWN WARRENDALE / CODY-ROUGE GRATIOT / 7-MILE EAST WARREN / CADIEUX PLANNING IMPLEMENTATION

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33 $415M $215M $90M $127M $71M $227M $58M $111M $130M $61M

34 V CITY INVESTMENTS PHILANTHROPIC GRANTS TOTAL SNF STREETSCAPE INVESTMENT $49M $ 0M 35 $49M

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37 CITY INVESTMENTS PHILANTHROPIC GRANTS TOTAL SNF PARKS INVESTMENT $7M $14M 38 $21M

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39 REHABBING 104 VACANT HOMES IMPROVING 269 VACANT LOTS

40 ISLANDVIEW/GREATER VILLAGES SINGLE FAMILY STABILIZATION Unit Sales Including 20% Affordable Preliminary Sources and Uses Sales Including 20% Affordable Structures 30 Units 40 Vacant Lots 50 Sources Equity $ 559,050 11% Construction Financing $ 3,806,450 75% Public 500,000 10% Philanthropic 200,000 4% Total $ 5,065, % Seven Neighborhood Aggregate EQUITY CONSTRUCTION FINANCING $ 5,590,500 NON-SERVICEABLE GAP $ 7,000,000 TOTAL WITH PRIVATE LEVERAGE $ 38,062,500 $ 50,653,000 Uses Acquisition - homes $ 200,000 4% Acquisition - vacant lots $ 50,000 1% House Renovation $ 2,800,000 55% Lot Beautification $ 250,000 5% Soft Costs $ 975,000 19% Development Fees 330,000 7% Contingency 460,500 9% Total $ 5,065, %

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43 GRANDMONT-ROSEDALE 3-STORY MIXED-USE NEW CONSTRUCTION Sources Debt Capacity $ 2,897,916 45% Equity 641,122 10% Non Serviceable Gap * 2,872,181 45% Total $ 6,411, % Seven Neighborhood Aggregate SENIOR DEBT $ 16,761,199 Uses Acquisition $ 150,000 2% Hard Cost 5,439,320 85% Soft Cost 821,898 13% Total $ 6,411, % Operating Proforma < 120% LTV Gross Rentable Revenue 363,985 Effective Rental Income 327,586 Total Operating Expenses 109,195 Net Operating Income 218,391 Debt Service: Senior 70% LTV, 5%, 25 YRS 120,519 Junior 5%, 30 YRS 78,018 Cash flow 19,854 "All In" DCR 1.10 x Debt and Gap Senior Debt $ 1,698,594 Serviceable Junior Debt 1,199,321 Non Serviceable Gap * 2,872,181 Borrower Equity 641,122 Total $ 6,411,218 SERVICEABLE JUNIOR DEBT NON SERVICEABLE GAP - PHILANTHROPY NON SERVICEABLE GAP - STATE BORROWER EQUITY TOTAL INVESTMENT $ 11,834,527 $ 34,876,291 $ 14,946,982 $ 7,824,333 $ 86,243,332

44 NEIGHBORHOOD PLANNING STREETSCAPES PARKS SINGLE-FAMILY STABLIZATION COMMERCIAL CORRIDORS TOTAL PHILANTHROPIC GRANTS CITY STATE SNF INVESTMENT $ 3M $ 3M $ 49M $ 49M $ 14M $ 7M $ 21M $ 7M $ 7M $ 35M $ 15M $ 50M $ 56M $ 59M $ 15M $130M PLUS $113M IN EQUITY & COMMERCIAL DEBT EQUALS $ 243M IN TOTAL INVESTMENTS

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48 LIVERNOIS- McNICHOLS NORTHWEST / GRAND RIVER RUSSELL WOODS

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51 POPULATION (IN THOUSANDS) WASHINGTON DC 900 2,000 DETROIT 800 1, ,

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53 2015 Identified 10 areas centered on commercial corridors 2016 Improved quality of development pipeline 2018 Aligned with Strategic Neighborhood Fund

54 2014 Established affordability requirements for projects with City investment 2017 Inclusionary Housing Ordinance adopted 2017 Creation of Affordable Housing Development and Preservation Fund

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56 INCLUSIONARY HOUSING ORDINANCE Bi-weekly convening with Council President Pro Tem Sheffield, Policy advocates (CDAD) PRESERVATION ACTION PLAN Focus groups with range of preservation property owners, CDCs Q Q STRATEGY DEVELOPMENT FOCUS GROUPS Government & CDFIs CDCs and local developers Housing Advocates

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59 REGULATED AFFORDABLE HOUSING NATURALLY OCCURRING PRESERVATION GOAL 8,854 1,146 10,000 Before TOTAL 3, , , ,854

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61 Cumulative New Unit Completion Projection by Year # UNITS 12,000 10,000 8,000 9,950 new units completed or financed by ,000 4,000 2,000 Goal is 20% affordability: approximately 2,000 units

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64 NEW AFFORDABLE PRO-FORMA Sources Debt Capacity $ 6,690,759 29% Equity 2,321,000 10% Non Serviceable Gap * 14,198,241 61% Total $ 23,210, % New Affordable Aggregate LOW COST CAPITAL $ 69,914,880 Uses Acquisition $ 250,000 1% Hard Cost 19,125,000 82% Soft Cost 3,835,000 17% Total $ 23,210, % Debt and Gap Low-Priced Debt $ 3,495,744 Conventionally-Priced Debt $ 3,195,015 9% and 4% LIHTC 12,727,000 AHLF Gap 1,471,241 Borrower Equity 2,321,000 Total Investment $ 23,210,000 COMMERCIAL DEBT 4% & 9% LOW-INCOME HOUSING TAX CREDIT GRANTS BORROWER EQUITY TOTAL INVESTMENT $ 61,541,523 $ 68,174,000 $ 54,624,469 $ 28,276,750 $ 282,531,622

65 PRESERVATION PRO-FORMA Sources Debt Capacity $ 5,575,633 32% Equity 1,760,000 10% Non Serviceable Gap * 10,264,367 58% Total $ 17,600, % Preservation Aggregate LOW-COST CAPITAL $ 80,024,800 Uses Acquisition $ 250,000 1% Hard Cost 14,450,000 82% Soft Cost 2,900,000 17% Total $ 17,600, % Debt and Gap Low-Priced Debt $ 163,120 Conventionally-Priced Debt $ 2,662,513 4% LIHTC 6,319,000 Soft Money 2,750,000 AHLF Gap 3,945,367 Borrower Equity 1,760,000 Total Investment $ 17,600,000 CONVENTIONAL DEBT 4% LOW-INCOME HOUSING TAX CREDIT STATE CAPITAL WITH LOW-INCOME HOUSING TAX CREDIT GRANTS BORROWER EQUITY TOTAL INVESTMENT $ 106,500,504 $ 165,985,000 $ 36,500,000 $ 46,334,696 $ 47,050,000 $ 482,395,000

66 USES SOURCES GRANT LOW- COST CAPITAL TOTAL PRESERVE NEW TOTAL $ 46M $ 54M $ 100M $ 80M $ 70M $ 150M $ 150M 10, $ 250M UNITS UNITS CITY GAP $ 50M $ 50M $ 50M $ 200M PLUS $ 515M IN EQUITY INCLUDING TAX CREDITS AND COMMERCIAL DEBT EQUALS $ 765M

67 PRIVATE EQUITY CONVENTIONAL DEBT $765M TOTAL $76M $168M DEBT+EQUITY $515M (Leverage) 9% & 4% LOW-INCOME TAX CREDIT & MICHIGAN STATE HOUSING DEPARTMENT AUTHORITY EQUITY LOW-COST CAPITAL PHILANTHROPIC GRANTS CITY OF DETROIT $271M $150M $50M $50M AFFORDABLE HOUSING LEVERAGE FUND $250M (Raise)

68 1 Manage Pipeline 2 Evaluate & Underwrite 3 Coordinate & Prioritize 4 Close & Manage Investments

69 1 Manage Pipeline 2 Evaluate & Underwrite 3 Coordinate & Prioritize 4 Close & Manage Investments HRD and LISC coordinate pipeline Release coordinated applications for funds LISC and HRD underwrite deals Allocations Committee ranks deals and awards funding HRD and LISC coordinate closing Utilize standard investment documents HRD and LISC perform asset management

70 08/18 Agree to funding criteria 10/18 10/18 11/18 Finalize operational procedures Hire AHLF staff Train development community on AHLF 11/18 Release coordinated applications for funds 01/19 02/19 03/19 Close funding round Underwrite and evaluate submissions Allocation committee agrees to initial awards and funding

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72 PHILANTHROPIC GRANTS LOW-COST CAPITAL CITY STATE TOTAL INVESTMENT SNF 2.0 AHLF TOTAL $ 56M $ 0M $ 59M $ 15M $ 130M $ 50M $ 150M $ 50M $ 0M $ 250M $ 106M $ 150M $ 109M $ 15M $ 380M PLUS PRIVATE CAPITAL OF $113M IN SNF 2.0 AND $515M IN AHLF EQUALS $ 1.01B OF TOTAL NEIGHBORHOOD INVESTMENT

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