After a longer-than-expected delay, the first phase of a major residential development in the North End is complete.
Develop Detroit has finished construction on the first 21 homes of a scattered-site project, mostly in the North End, intended to add neighborhood density. The seven rehab and 14 new homes clustered on several streets around John R and Marston are all for sale, going for between $150,00 and a little over $250,000. They’re listed with City Living Detroit.
The homes are not only a combination of new and rehab, but also housing type. There’s nine units across three triplexes, two duplexes, and the rest single-family. All the homes are similar in size: two to three bedrooms between 1,000 and 1,400 square feet. Many, including all the new single family homes, have already sold.
The development’s pilot phase cost $6.5 million, with financing from J.P. Morgan Chase and $2.2 million in New Markets Tax Credit from U.S. Bancorp Community Development.
But all this progress was not without some hiccups. A few of the renovated homes were expected to be completed this spring, but Develop Detroit found elevated levels of lead in the service line. The additional labor and cost to remediate—around $10,000 to $15,000 per home—resulted in a several month delay. But Develop Detroit says they haven’t passed along the cost to the new homeowners.
“There were some growing pains and lessons learned that we can use in the next phase,” says Sean White, Develop Detroit’s director of fund development. “All in all, we’re mostly relieved and a little excited to get these out to market.”
This is, after all, the nonprofit developer’s first foray into single-family neighborhood development. The idea for this project actually came about after Develop Detroit purchased the nearby Marwood Apartments, a 53-unit building whose low-income housing tax credits had elapsed.
“It was advertised as an opportunity to do upgrades, and the implication was that the new owner could increase rents,” says Develop Detroit executive director Sonya Mays.
Develop Detroit has committed to upgrading the units and keeping them at current affordability levels.
That project got the team thinking about the value of clustering their work to have a larger impact. It then began buying vacant land and homes in the area, and embarked on its scattered-site home development model.
“Our core work is apartment buildings, but in isolation, it’s hard to create enough impact to invite other investors to do some of this work,” Mays says. “If you can scale, you can do something more transformational, that signals a different future.
“That’s why you have nonprofit developers—to take on some of the early neighborhood risk,” she adds.
Develop Detroit is already building on the success of the pilot phase. It’s begun rehabbing seven townhomes on Marston and Mount Vernon streets, and hopes to build 70 total homes, with some in Grandmont-Rosedale and Islandview.
Overall, Develop Detroit thinks its investment could exceed $25 million the North End alone.
If you want to see the homes in person, there’s an open house Sunday, November 3 from noon-2 p.m. at 8035 John R Street.