Vacant Building in Detroit Redeveloped as Affordable Housing

Vacant Building in Detroit Redeveloped as Affordable Housing

In December 2016, officials celebrated the grand opening of Treymore Apartments, an apartment building in Detroit’s Midtown neighborhood that is more than a century old and had been vacant for more than 20 years before undergoing a $6.5 million full rehabilitation. Improvements to the four-story, 30,000 square-foot apartment building included the installation of new interior systems and upgrades to the lot and the building’s exterior. Financing for the project included HOME Investment Partnerships funds from the city of Detroit, low-income housing tax credits from the Michigan State Housing Development Authority, brownfield tax credits from the city council, and private equity.

Midtown Housing Market

The city of Detroit has had a weak housing market. As recently as 2009, when he purchased Treymore, developer Robin Scovill from the Paradise Valley Investment Group says that nearly no market demand existed in Midtown. Including his property, which was built in 1916 the vacancy rate of the Midtown rental market exceeded 15 percent.

More recently, however, the Downtown and Midtown cores have experienced rapid growth as the city of Detroit and local institutions have expended considerable effort and investment to revitalize the areas. Bounded by the John C. Lodge Freeway, Interstate 94, and Interstate 75, the Midtown area connects to Downtown and Wayne State University and is near several anchor attractions, such as the city’s medical center and art museum. Despite declaring bankruptcy in 2013, the city has invested in infrastructure repairs, safety cameras, and law enforcement to make Midtown a safer and more desirable place to live. The Downtown and Midtown areas have also been a part of the City of Detroit Housing and Revitalization Department's targeted multifamily housing areas. To encourage sufficient residential density that can support local retail, the city prioritized affordable housing in Midtown to support community revitalization. In addition, big employers in Midtown, including the Detroit Medical Center, Henry Ford Health System, and Wayne State University created a program called “Live Midtown” in 2011 that offered their employees incentives for purchasing or leasing a home in Midtown. This program attracted 2,025 Midtown residents between 2011 and 2015. As the neighborhood revitalized and the rental housing market tightened, affordable properties such as Treymore became a critical component of equitable growth in Midtown, helping ensure that low-income residents still had affordable options in the neighborhood.

Rehabilitation Challenges

One of the unexpected challenges of rehabilitating Treymore was demolishing the Pyro-Bloc interior demising walls, which contained asbestos. The rehabilitation team had to abate this hazardous material, which slowed down construction and significantly increased the cost. Structural issues such as damaged beams or deteriorated facets required major repair and replacement. Removing steel inside the unstable wood structure was particularly challenging, as sparks generated from cutting steel increased the risk of fire. In the end, a full rehabilitation of Treymore took about 16 months. The 28 loft-style units are now equipped with brand-new interior features, including energy-efficient windows; heating, ventilation, and air conditioning systems; and lighting. The addition of a new stairway, elevator, and second entrance makes the building compliant with the Americans with Disabilities Act. Treymore’s original historic features were incorporated by restoring the decorative cornice, stonework, and tile entry. Exterior improvements include new bricks, roof, outdoor lighting, and green space as well as sidewalk and alley improvements. The project also added a new fence to the park next to the apartment building and a new paved parking lot across the street for residents.

Financing

The city of Detroit contributed $3.5 million to the project through the HOME Investment Partnerships program, which is the largest federal block grant to state and local governments that is designed exclusively to create affordable housing for low-income households. An investor contributed more than $2 million in low-income housing tax credit equity, which was allocated through the Michigan State Housing Development Authority. Treymore also received $160,000 from the Detroit Brownfield Redevelopment Authority, which was established to promote the revitalization of environmentally distressed and blighted areas in the city. Private equity and additional financing brought the total funding to $6.5 million. The refurbished building now it provides 28 one- and two-bedroom affordable units to households earning incomes at or below 50 and 60 percent of the area median income. Per the affordability requirements of the funding sources, both the state and city evaluate and adjust the project’s affordability level annually.

Affordable Housing Contributes to Community Revitalization

To fight longstanding disinvestment and stimulate population growth, Detroit has channeled resources into its Downtown and Midtown neighborhoods. Treymore Apartments contributed to these revitalization efforts by turning a vacant property into a community asset. Attracting young professionals and employees of area anchor institutions, 98 percent of the rental units in Midtown were occupied by 2015. Since the tightening of the housing market threatens to price out lower-income residents, affordable housing options such as Treymore are needed to ensure that lower-income residents can remain in Midtown as its economic fortunes rise. Demand for such rental opportunities has been high — affordable developments in the area have had a high occupancy rate, and the newly renovated Treymore is also fully leased.