Southwest Detroit shop owners loft build-outs capture growing demand for “missing-middle” housing stock

Southwest Detroit shop owners loft build-outs capture growing demand for “missing-middle” housing stock
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Virtually every Detroiter is familiar with West Vernor Highway. The street not only serves as a major east-west link between downtown and Ford’s River Rouge Plant, it offers a variety of local business attractions.

Whether visiting Arandas Tire for automotive needs or feeding a craving for barbecue chicken at Taqueria El Rey, patrons can fulfill their service needs at well-established retail shops and restaurants along the road.

Traveling the thoroughfare, an observer might notice storefronts with what look like apartments upstairs. While many of the lower units are occupied, many of the apartment lofts upstairs are vacant. Greg Mangan, real estate advocate at Southwest Detroit Business Association (SDBA), is working to fill these spaces through a new assistance program for building owners.

The SDBA’s loft housing initiative is focused on the “missing middle” of the rental market – reasonably-priced, moderate-sized units.

Mangan sees renovations as an opportunity to shore up economic viability and provide an intermediate housing option for renters in what community developers call the “missing middle” of the housing market – reasonably-priced, moderate-sized units.

Southwest Detroit Business Association’s Greg Mangan believes that the demand for downtown loft space will continue to increase, particularly among Millenials.

“There are a lot of younger tenants who might want to get out on their own, stop living with mom and dad, maybe, but aren’t ready to buy a house,” he says.

The program will focus on providing supplemental financial assistance to building owners interested in renovating upstairs apartments, which are plentiful, especially in the western portion of the Vernor corridor.

Living above a storefront was popular in days of yore, but as the city began its slow population slide in the 1950s and 1960s, stores moved out and so did the families living upstairs from the businesses they often owned. At the same time many American cities began constructing less with families and residential neighborhoods in mind and started developing retail outlets with automobile owners in mind. That led to suburban strip malls and shopping centers. The earlier model of mixed-use development was mothballed by many.

The SDBA program is a grant-funded initiative that will provide $8,000 per unit to property owners, starting with four buildings on West Vernor and Springwells. Part of the plan involves recognizing not only the architectural value of the storefronts in question, but in strengthening the idea of mixed-use buildings and promoting a mixed-use district.

Southwest’s three major arteries – Fort Street on the south, Vernor Highway, and Michigan, on the north – offer ample perspective for thinking about the city’s history and land use. Historic buildings on those streets could be prime places for these apartments, especially if they are in historic districts, which encourage the preservation of buildings and allow access to historic tax credits for developers.

Beginning with buildings that comprise about 22,000 square feet, SDBA identified 88 buildings in the Vernor-Bagley corridor that Mangan says could qualify for the program.

On Vernor, three distinct historic districts comprise about a half-square-mile, and about 80 buildings were added to the National Register of Historic Places in 2002.

SDBA is working to create the “20-minute neighborhood,” Mangan says. The concept, widely touted by Mayor Mike Duggan as a development strategy for building sustainable communities, incorporates shopping and amenities within a 20-minute walk from home. Duggan has pushed the strategy as a means to stem the tide of the billions of retail dollars that flow out of the city to the suburbs annually.

Today, some of the strip mall style of development still dominates Vernor between Grand Boulevard and the streets east of Livernois. One needs to look no further than an afternoon traffic jam to understand that, in many local areas, the automotive paradigm still rules. But this is changing in a city that pays increasing attention to “walkability,” as core neighborhoods between downtown and Southwest Detroit see a spike in demand. Along with an accompanying jump in rentals, Mangan says the trends are key to the loft space program.

Beginning with buildings that comprise about 22,000 square feet, SDBA identified 88 buildings in the Vernor-Bagley corridor that Mangan says could qualify for the program.

The vision and opportunity represents hundreds of potential housing units in a market with extraordinarily low vacancy.

Editor’s note: To learn more about the Southwest Detroit Business Association visit: southwestdetroit.com

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