Detroit to pay landlords to rehab 2nd floor apartments above stores

For 20 years, Jamahl Makled owned a mixed-use building in southwestern Detroit. He rented the commercial space downstairs to a financial services company and a cell phone store, but largely ignored the six upstairs apartments, which he said had water damage, falls from plaster and outdated electrics and plumbing.

That is, he ignored apartments until a pilot program with the Southwest Detroit Business Association awarded $8,500 per unit to renovate apartments above commercial space. Then Makled spent about $110,000 – including this grant – to upgrade the electrical and plumbing, install new toilets and sinks, install wood-grain vinyl plank flooring, and repair walls. in ruins.

Now he rents an apartment for $650 a month and the rest for $750. This achievement is one of the reasons the Detroit City Council recently approved a plan to expand the $35,000 pilot program with additional incentives of $305,000 and more for homeowners to upgrade and rent vacant units above storefronts.

“I wouldn’t have done it without the grant money,” Makled said. “I didn’t want the residential upstairs to interfere with the commercial downstairs. … Residential, if it was all out of my pocket, I wouldn’t think it made sense.”

But for Detroit, which is trying to increase the number of affordable homes and apartments for residents, empty and abandoned second-floor units represent an untapped market.

There are no hard numbers on the number of unoccupied apartments above the city’s shops and restaurants, but Elaina Peterson, a program analyst on the department’s policy and enforcement team housing and city revitalization, said it could be as many as 12,000.

These estimates come from looking at the roughly 3,000 commercially zoned structures built between 1920 and 1929, when these buildings were most likely to have owners living above their workplaces, and multiplying them by about four. units per building.

That many more apartments, if updated to be livable, could make a big difference to residents struggling to find affordable housing as rents and sale prices rise.

“There is a stock of second-floor units ready for renovation,” said Keegan Mahoney, program director with the Department of Housing and Revitalization’s policy and implementation team. “We think there’s the potential for pretty decent scale without a steep grant increase and development timeline.”

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