Detroit — Ch. 22 Art. III Inclusionary Housing Requirements (preempted-pending-review) § 22-3-6

(a) The Housing and Revitalization Department shall investigate compliance and enforce the provisions of this article for Type 1 through Type 5 qualifying transactions. To reduce duplication of enforcement efforts, for Type 6 qualifying transactions, the Housing and Revitalization Department shall investigate compliance and enforce the provisions of this article for tax abatements that do not receive federal funding. For penalty purposes, the Housing and Revitalization Department is responsible for the verification of compliance monitoring.
(b) Unless otherwise set forth in the transactional documents for Types 1 through 6 qualifying transactions, the contract or development agreement for any qualifying transaction shall contain provisions such that, where the requirements of this article are not met or maintained, the developer or owner shall be responsible for the payment to the City of the following penalties, provided, that when penalties apply whichever penalty is greater will be imposed:
(1) For Type 1 through 5 qualifying transactions as follows:
a. Upon the failure to maintain and provide the required number of dwelling units available for rent or lease at affordable rates, both of the following:
i. The excess of actual rent received over the affordable rate that would otherwise apply; and
ii. A penalty for each unit not in compliance in the amount not less than 25 percent of the affordable monthly rent for each month or part of a month of non-compliance;
b. The enforcement costs of the City; and
c. Any other sanction or penalty under applicable law, rules, or regulations.
(2) For Type 6 qualifying transactions as follows:
a. Upon the failure to maintain and provide the required number of dwelling units available for rent or lease at affordable rates, an amount equal to the difference for the year of non-compliance between the amount of ad valorem tax otherwise due on the propery without the Tax Abatement Certificate and the amount of the specific tax due on the property with the Tax Abatement Certificate, multiplied by a fraction, the numerator of which is shortfall of the number of dwellings units available for rent or lease at affordable rates and the denominator of which is the total number of dwellings units required to be available for rent or lease at affordable rates;
b. The enforcement costs of the City; and
c. Any other sanction or penalty under applicable law, rules, or regulations.
(c) The penalties described in Subsection (b) of this section shall be assessed to the developer or owner subject to the following:
(1) Prior to the application of the penalty, the owner shall have 60 days from the due date of the annual report to the City of Detroit to cure the non-compliance;
(2) Where the owner has failed to cure the non-compliance within 60 days, the penalty shall be assessed from the first day of non-compliance; and
(3) The 60-day cure period may be extended by the Director of the Housing and Revitalization Department for a reasonable specifically-stated period for good cause shown. Examples of good cause include, but are not limited to, situations where the current qualifying tenant's income increases above the applicable Area Median Income thresholds and situations where affordable dwelling units are not currently occupied by qualifying tenants, but the owner is actively marketing the units to qualifying tenants.
(d) With the exclusion of enforcement costs under Subsections (b)(1)(b) and (b)(2)(b) of this section, all remaining penalties under this section shall be deposited in the Detroit Affordable Housing Development and Preservation Fund for use consistent with this article.