Related JV Breaks Ground on $227M Michigan Affordable Project
Upon delivery, the community will be Ann Arbor's first fully income-restricted high-rise.
Related Midwest and the Ann Arbor Housing Commission have broken ground on The Adeline, a 20-story, 330-unit affordable housing project in downtown Ann Arbor, Mich. Completion on the $227 million project is expected in 2028.
The SmithGroup-designed development will be the first fully income-restricted high-rise in the city. The all-electric property will use a geothermal system as its primary heating and cooling source, making it Related’s first building to use this technology and one of Michigan’s largest affordable housing projects to do so.
Apartments will cater to households earning at or below 30, 60, 70 and 80 percent of the area median income, with the average clocking in at 58.3 percent of AMI. Additionally, 37 HOME- and 110 Project-Based Voucher-assisted units will be available.
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Floorplans call for one- and two-bedroom layouts of 638 and 914 square feet, respectively. The ground floor will feature 6,000 square feet of retail space and a resident lobby, as well as a mail and package room, while the second floor is set to encompass other amenities such as a lounge, classrooms for social programming and resident services, in addition to a children’s playroom, a gym and storage spaces.
The Adeline is rising on city-owned land at 350 S. Fifth Ave., in Ann Arbor’s downtown. The site is part of a dense urban district where several public infrastructure upgrades are planned, such as bike lane and streetscape improvements, as well as a new bus lane.
The project’s capital stack comprises an $8 million HOME loan and a $56 million permanent mortgage issued by the Michigan State Housing Development Authority, a $46 million Ann Arbor Housing Development Corp. note, $91.5 million in tax credit equity, $5.4 million in investment tax credit equity, $675,907 in Transformation Brownfield Plan Construction Period Income and a $19.4 million deferred developer fee.
The housing authority’s rehab and production efforts
MSHDA’s new Housing Opportunity Tax Credit, which is set to complement the federal program and fund the development of 2,500 new units every year, will bolster Michigan’s affordable multifamily construction starting 2027, when it will come into effect. Up to $42 million will be allocated annually, nearly doubling the state’s investments in income-restricted housing.
The authority is also actively rehabilitating existing affordable properties. MSHDA recently partnered with Related for the $94 million acquisition and rehabilitation of four income-restricted communities spanning 524 units across Michigan.
