Development leaders discuss protecting, investing in Detroit

Development leaders discuss protecting, investing in Detroit
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More Detroiters are sharing the city’s wealth.

A devoted core of civic leaders, residents and community-minded professional developers are bringing investment to areas in need of the same nurturing other parts of the city – namely downtown and Midtown – have received.

Plans are underway to stabilize core neighborhoods that are already densely populated and show signs of economic life and energy, but need assistance to move from struggling to stable and growing. The key is understanding basic urban planning and what’s needed to attract and encourage development.

Packaging is everything, say experts, who point out many neighborhoods are close to having all the essentials, like stable population and organized resident groups, to spur investment. But, left unaddressed, weaknesses will leave some areas and zip codes vulnerable to losing the rewards of increased property value.

Walkability and livability 

Apart from financing, successful development requires discussion between project planners and residents about goals and needs, District 5 Councilwoman Mary Sheffield says.

Mary Sheffield, District 5 City Council member, wants to preserve inclusive housing for lower-income Detroiters, and create a fund to support affordable homes for very low-income residents. Photo courtesy of Councilwoman Mary Sheffield

“Community engagement is so, so important …and also making certain that city government and representatives are a part of those discussions,” she says.

Sheffield cites the $53 million mixed-use project Third and Grand, under construction by local developers Peter Cummings’ and Dietrich Knoer’s The Platform as “a great example” of community engagement with residents. The complex will feature 231 apartments, including 20 percent at affordable rates, on the site of a former parking lot in District 5’s New Center. The development at Third Avenue and West Grand Boulevard is expected to create several dozen jobs and include up to 17,500 square feet of retail space.

Proximity to fresh food grocers, restaurants and retail is essential, says Sheffield. She is an advocate of the 20-minute neighborhood, a model in which residents can access most of their day-to-day goods and services, like markets, schools, and leisure activities, all within a safe walking distance from home.

Avoiding cookie-cutter neighborhoods is central to the proposed “walkable” plan, which aims to strike a balance between stabilizing existing resident needs and more market-driven factors that accompany development, like escalating rental rates, property values and taxes.

A central component in the walkable blueprint is affordable housing that will give low- and moderate-income Detroiters the same access to amenities as residents in greater income brackets.

Making room for everyone

Sheffield wants to see two affordable housing units reserved for every 10 new or refurbished units developed, to make sure lower-income residents don’t get pushed out of the neighborhoods where they’ve planted roots.

The “Affordable Housing” ordinance proposed by Detroit City Council member Mary Sheffield (right) assesses penalties against city-funded developers who don’t comply. The funds will be directed to a housing trust fund used to support affordable housing initiatives. Photo courtesy of Councilwoman Mary Sheffield

To support a greater mix of income and inclusion, she proposed an ordinance that would require developers of 20 or more housing units to reserve 20 percent of the total housing units at “affordable” or 80 percent area-median income (AMI) rates. Today, a family of four with a household income of less than $53,520 would be eligible at 80 percent AMI. Those making $20,070 would be eligible for 30 percent AMI, a figure much closer to market need.

The proposed ordinance also assesses housing trust fund penalties against landlords who don’t comply, creating further residential support for households at about percent of AMI. Dollars from penalties would be directed to a trust fund used to support affordable housing initiatives for very low-income.One particular neighborhood institution can play a key role in supporting conversations between residents and companies aiming to build and profit from having a presence in the community, says Sheffield.

“I would like to see the churches come out of the four walls and come out of the ministry of the pulpit,” she says. “Ministry, for me, is more than Sunday morning. It’s about people’s day-to-day lives.”

Raise your voice

Joe Heaphy, president of Ethos Development Partners, a company that consults with nonprofit organizations engaged in real estate development, agrees resident involvement is crucial to bringing new and sustained housing and economic development initiatives to neighborhoods. The project manager of the NSO Bell Building’s historic $50 million renovation into mixed-use space for 200 Neighborhood Service Organization staff and 155 formerly homeless Detroiters has a rare perspective.

A transplant from New York, Heaphy once worked as a community organizer and tenant rights advocate.

Ethos Development Partners President Joe Heaphy, believes that Detroit residents are doing solid work but lack a citywide network ‘for getting things done’ at the street level. Photo courtesy Ethos Development Partners

“Community development needs to understand that its roots are community organizing,” he says.

During his 14 years in Detroit, Heaphy has witnessed neighborhood groups throughout the city doing solid work, but no citywide infrastructure or network “for getting things done” at the street level that involves residents who live in the city’s neighborhoods.

In New York City, he directed a statewide tenant rights organization that Detroiters might replicate. “It doesn’t have to be a lot of people,” Heaphy says. “It’s not just about getting people mobilized, it’s getting people educated.”

Ordinances and general rules of engagement regarding housing development can positively impact everything from affordability to gentrification, when citizens become active.

Among his current efforts in the city, Heaphy is a member of the development team looking to redevelop the Coalition on Temporary Shelter (COTS) building, using low income housing tax credits and historic tax credits.

On the business side, he says, major projects can be challenging for small developers to access under current state guidelines and requirements for participation. “Experience points,” for example, are favored in winning tax credit allocations from the state housing authority, but smaller, community-based developers often find such qualifications out of their reach when compared to the resumes of large companies.

“I think the ‘one-size’ approach MSHDA (Michigan State Housing Development Authority) takes doesn’t always benefit Detroit,” Heaphy says.

The state has discussed policies and plans for a neighborhood-centered program with Detroit development officials, including Maurice Cox and Arthur Jemison, says Gary Heidel, MSHDA’s chief housing investment officer. Cox is the City of Detroit planning director. Jemison is the city’s housing and revitalization director.

Although MSHDA is funding neighborhood development efforts, its allocations often go to larger, more experienced firms, which typically are not Detroit-based nor minority-owned.

But criteria like experience points decrease risk that a project won’t be successfully completed, Heidel says, and aren’t meant to exclude small developers from opportunities.

MSHDA’s  Chief Housing Investment Officer Gary Heidel believes that there is potential to better “synergize” and “support” local agencies. Photo courtesy of MSHDA

“One of the things we do see happening, though, is that, if there is a situation with experience points, when it comes to nonprofits, they will team up with a developer that gives them the experience they need,” Heidel says.

While MSHDA receives the same kinds of federal funding that supports housing efforts in Detroit and Flint, there is potential to better synergize state support to local agencies, he says.

“We recognize that certain federal programs have been cut off, and we have to work to find better ways to stretch resources between the city and the state.”

Affordable housing: The game changer

Detroit must deliver more innovative housing options and related funding sources, says Tahirih Ziegler, executive director of Detroit LISC.

“Yes, we’ve got to meet current market demands,” she says, “but we also need to come up with the right interventions to support redevelopment efforts.

Detroit LISC’s Executive Director Tahirih Ziegler believes that Detroit must deliver more innovative housing options and related funding sources. Photo: Paul Engstrom

“We need more pools of funds around community development specifically for Detroit,” she adds, including philanthropic, private and city support as resources.While Detroit has its own unique makeup and challenges, places like Milwaukee, Kansas City, Indianapolis and Cleveland, with comparable single-family housing challenges, are making strides toward affordability, Ziegler says.

Still, there is much uncertainty among state and city developers as they wait to see what Ben Carson, the new head of the federal government’s Department of Housing and Urban Development, will do.

“He’s a very smart guy. It appears he doesn’t know much about housing, but we’ll see how that goes,” says Heidel.

Regardless of government decision-making, Heaphy says Detroiters should organize for development that reflects their best interests.

“I think, given the political environment at the national level,” he says, “we’ve got to get back to our roots.”

Arthur Jemison, Detroit’s housing and revitalization director is focused on developments that ‘transform’ neighborhoods. Photo: Paul Engstrom

 

THE CITY’S OUTLOOK

Arthur Jemison, Detroit’s housing and revitalization director, spoke to TheHUB about topics of both immediate and long-term concern to residents.

ON DEVELOPMENTS:

“We are focusing on developments that transform neighborhoods, preserve affordability, and end homelessness, as well as on public housing.”

ON GENTRIFICATION:

“The overall analysis is that our city is very affordable. There’s room for everybody, and Detroiters want neighbors. With the increasing market strength, we are beginning to see pressure on rent and prices. The administration is fighting this issue with affordable housing in every request for proposals for development, including 20 percent affordable housing and pursuing a policy of preservation for current affordable housing. For example, when a developer comes to a city looking for subsidies, we have leverage to negotiate deed restrictions to keep many units affordable.”

ON THE RELATIONSHIP WITH THE STATE:

“MSHDA’s (Michigan State Housing Development Authority) has been a great partner to the city throughout the bankruptcy, and in rebuilding our neighborhoods. We’ve responded to the state about elements in their Qualified Allocation Plan for tax credit financing, but we’re waiting to see what happens in the next round of tax credit allocations.”

ON THE AFFORDABLE HOUSING RATIO: 

Arthur Jemison would like to see more rental assistance for affordable housing units in the city.

“We want more than 20 percent, but the higher proportion of affordable units makes it more expensive for owners to operate and maintain their properties. We want to target the 30 (percent) or the 50, but it’s a question of the money and getting more rental assistance. The city has supported affordable housing in areas where the market is driving growth and, in other areas, we’re driving a planning process with affordable housing as a value that’s being expressed by the residents themselves.”

ON PRESERVING AFFORDABILITY:

“The city is convening a collaborative of developers, government representatives and CDFI’s (community development financial institutions) to manage the graduating class of multi-family and scattered-site housing projects that are facing the end of their public subsidy contracts, to keep as much of that housing affordable for Detroiters, for many years to come. We’re in the process of identifying the top five at-risk properties and speaking directly with their owners about future plans.”

Lead photo: Cranes are in the neighborhoods as the Coe takes shape in West Village. Photo by Chris & Michelle Gerard

Editor’s Note: This feature is a part of TheHUB’s Live Love Detroit series. See related posts:

Introducing “The Map:” TheHUB’s exclusive guide to what and where investment is happening in Detroit

TheHUB launches year-long, in-depth report on neighborhood-specific investments

It takes a Village: Woodward Village thrives with families

Introducing “The Glossary:” A user friendly guide to developer terms

 

 

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