In partnership with the Southwest Detroit Business Association (SDBA), the city of Detroit announced the expansion of the Second-Floor Residential Grant Program, which qualified applicants will receive $10,000 to renovate the vacant space in their property into affordable residential units.
The grant program will create and manage a process for second-floor unoccupied commercial property to be turned into apartments in Southwest Detroit. The initiative will enable the planned objective of twenty-four (24) rehabilitated rental units to be met.
“We saw a kind of a big gap in our commercial corridors in Southwest Detroit with there being so much available property, especially on the second floors of those traditional buildings that were constructed back in the ‘20s and ‘30s during the building boom,” said Greg Mangan, real estate advocate at SDBA.
“They have suffered over the years through some negligence and some vacancy and those second floors were where shop owners used to live above [their business] with their families and it had the more traditional work-and-live situation type of those buildings which have gone away during suburbanization and through several generations.”
In 2016, SDBA conducted a survey of Southwest’s business improvement district along West Vernor and Springwells and determined there were more than 80 vacant second floors with multiple apartments within those buildings surveyed.
In 2017-2018, the SDBA, with funding by the Kresge Foundation’s KIP:D+, launched the Second Floor Residential Renovation Project, resulting in 12 second-floor rental apartments along the W. Vernor and Springwells commercial district. The project supported local property owners to invest in mixed use buildings to rehabilitate units above a business property for residential use.
According to the 2-19 Process and Outcome Evaluation Report, the goals of the pilot SDBA Second Floor Renovation Program were to:
1) Maintain/stabilize the residential population;
2) Increase the number of high-quality housing options for locals;
3) Increase safety in the business district through increased foot traffic;
4) Increase the income stability of individual property owners;
5) Expand the residential clientele of nearby businesses; and
6) Encourage further economic growth and interest in the West Vernor corridor.
Mangan said the pilot program had a great impact on providing access to affordable housing, as all but one of the 12 finished units are currently occupied. On average, the 12 occupied second floor units are rented at $750-$800 per month for 1 bedroom units and $950-$1000 for a two bedroom unit.
The anticipated rental rates for the additional 24 apartments are $780-$1,250, making them affordable to residents earning between 50 percent and 80 percent of area median income.
“The City of Detroit is always looking for ways to create affordable housing and opportunities for Detroiters,” said Julie Schneider, director of the city’s Housing & Revitalization Department, in a press statement. “This great program does both, by converting unused space into affordable places for Detroiters to live, reinvigorating our commercial corridors and helping to stabilize income for local property owners.”
The funding provided by HRD is a part of the $203 million housing plan, which was unveiled last July by Mayor Mike Duggan and members of the City Council in an effort to boost the city’s supply of affordable rental homes.
Eligible properties must have unused second-floor apartments located above ground-floor commercial space. They also must be located within the geographic boundaries of West Vernor Highway from Woodmere to 15th Street; Springwells Street from West Vernor to the West Fisher Service Drive; Junction from Michigan Avenue to Konkel Street; and Bagley Avenue from the West Fisher Service Drive to 25th Street.
In addition to proving that such conversions are feasible, the successful pilot also showed how second-floor residential apartments create a livelier commercial area to provide financial stability in the neighborhoods and spur economic development.
“Our hope is that this could be an example of how to do this throughout the rest of the city of Detroit and other commercial corridors to expand it even more in Southwest Detroit itself, but to move to other areas on the east side or along Jefferson or Mack or Grand River or Warren,” said Mangan.
I think this could be a program that is easily replicable to do throughout the city that has a building stock where they have second floor apartments and this could be the quickest and fastest way of creating some naturally occurring affordable housing.”
For more information about the Second-Floor Residential Program, contact SDBA Real Estate Advocate Greg Mangan at 313-283-6533 or visit southwestdetroit.com to apply. Application deadline for property owners is March 31 at 5:00 p.m.
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