Targeting neighbourhood improvement through property rehabilitation, the City of Detroit last year issued $175 million in Unlimited Tax General Obligation Bonds that it self-designated as social bonds.

The proceeds from the bond will go towards the City's Neighbourhood Improvement Plan, which aims to address vacant houses in neighbourhoods throughout Detroit through demolition and stabilisation to enhance property value, stimulate economic activity and create value for residents.

This issue will see 8,000 vacant houses demolished to reduce "dangerous residential blight", and several thousand more stabilised before they are sold. Over 70% of the city's voters approved up to $250 million in bonds to fund this plan.

“The extraordinary interest we saw in Detroit’s inaugural Social Bond offering is a by-product of its purpose,” said Jay Rising, chief financial officer at the City of Detroit. “It acknowledges the fact that the city’s credit relies upon our social environment, and that credit will continue to improve as we continue reinvestment in our city. Projects that create a positive social impact reward investors.”

As of February 2022, $81 million of the proceeds has been allocated, with 91% going to Detroit-based companies and 41% to black-owned Detroit-based companies. It is due to this targeting of marginalised communities and minority populations, as well as the fact the bonds address affordable housing and employment generation, that the City of Detroit believes they align with the core components of the International Capital Market Association's (ICMA) Social Bond Principles.

The bond was split in two, with $135 million in tax-exempt bonds and the remaining $40 million in taxable bonds, and it saw 61 investors take part in the bond sale, with participants from the tax-exempt and taxable markets.