In its heyday, Jefferson Avenue was known as one of the busiest commercial corridors in Detroit. Small businesses once bloomed near the dense residential community of Jefferson Chalmers.
But like many other Detroit neighborhoods, the population decline in Jefferson Chalmers left a great number of small to medium sized commercial and multi-family residential spaces abandoned. Fortunately, many of those houses and commercial properties had great bones and remain standing, awaiting redevelopment.
That's exactly what's underway in Jefferson Chalmers.
This Thursday, Jefferson East Inc.
(JEI), Shelborne Development, and residents will be joined by Mayor Mike Duggan to celebrate the redevelopments of the Marlborough and IDAO apartment buildings. Visitors will hear more about the projects, including the rates for and amount of affordable units, and be able to look around inside the buildings.
Other funding and support for the projects came from the city of Detroit, Enterprise Community Loan, Twain Capital, and the Kresge Fund. Construction, which began in December last year, is expected to be completed by the end of 2019.
But redevelopment in Detroit is often met with a healthy amount of skepticism. While affordable housing is high on the list of priorities in the city, a common follow-up question is, "Affordable for whom?"
In 2015, JEI entered into a partnership with Shelborne Development through their development arm, East Jefferson Development Corporation (EJ DevCo). The join venture's first project was Chalmers Square, a redevelopment of three apartment buildings of nearly 50 one to three bedroom units. The developers found that demand was high for both affordable and market rate housing, sparking a realization that multi-family development is necessary in the community.
To learn more about its commitment to building affordable housing, we spoke with Joshua R. Elling, executive director of JEI. Some of the topics covered in this conversation include what affordability truly means, what it will look like in Jefferson Chalmers, and why there is lingering anxiety about development.
Joshua R. Elling
Model D: Tell me a little about Jefferson East, Inc. What are some of your goals and projects in Jefferson Chalmers?
Joshua R. Elling: Jefferson East has been around since 1994. When we were originally founded, it was really to support the commercial district. It was all about getting retail, and helping people start businesses and facade programs.
But, the Jefferson Chalmers business district has one of the highest number of early 20th century apartment buildings. The challenge with that was present right at Chalmers Square — you had four small apartment buildings that were in either in mid-collapse or disrepair.
So in the early 2000s, JEI got really busy figuring out how to renovate apartment buildings. That is when we really got to know Kathy Makino-Leipsitz at Shelborne Development. Kathy was able to acquire that building as well as three others. We knew that the redevelopment would be at tremendous cost, but also that we still wanted the units to be affordable to the neighborhood.
What exactly does "affordable" housing mean?
The city's affordable housing ordinance requires that if you receive any public subsidies you have to do 20 percent of the units at 80 percent area median income (AMI). Here's the problem with AMI: that number is not just determined by the city of Detroit. That includes the metropolitan area; cities like Livonia, Warren, the Grosse Pointes, Dearborn — the core suburban area.
The AMI for the metro area, of course, is a lot higher than it is for the actual city. So, many times, that isn't actually affordable. To truly do affordable housing in an area like Jefferson Chalmers you have to produce housing at 60 percent AMI or less. The real biggie is 30 percent AMI.
But, you also have to temper that with the fact that restoring these units comes at a huge cost.
In the Marlborough Building, we have been able to keep 60 percent of those units at 60 percent AMI or below and 40 percent at market rate. That kind of approach fuels EJ DevCo and JEI as we continue to put together multi-family unit development deals. We want to make sure that the majority of the units are affordable and reflect the income levels in the surrounding neighborhoods.
What is the biggest type of pushback experienced in the community as this redevelopment takes shape?
There is a fear that if you bring on market rate units in a vacant building that somehow that is going to drive up costs in surrounding buildings. What that doesn't take into account is the law of supply and demand. As this neighborhood improves, as crime goes down, retail amenities and transportation improves, our neighborhoods are going to become more desirable places to live. By providing market rate units to service that demand, we are also helping supply keep up and cost increases down.
How do longtime Jefferson Chalmers residents benefit from this redevelopment?
As residual profits are received, that revenue is returned back to Jefferson East to support all of the other things that we are doing to improve the neighborhood. That's more money to fund our foreclosure prevention work, our home repair programs, or our safety and financial literacy programs. That is another way we're able to reinvest funds back into the neighborhood to support existing and long-term residents.
How do you communicate the messaging to change the perception that redevelopment equates to pushing out existing or long-term residents?
It's so new. Part of the challenge for us is that we get so consumed in making the project work that we don't have a lot of time to message. Part of our job in the next year is to beef up our messaging process so that residents can understand and inform the development process, can give us design feedback, and understand the affordability goals. The Knight Foundation has supported us in hiring a Civic Engagement Director.
I think as we continue to do this work, our goals has to be to help residents not feel threatened by development, but to understand the benefits and to understand that Jefferson East and East Jefferson Development Corporation are doing development differently, and doing it without displacement.
Join Jefferson East, EJ DevCo, and Mayor Duggan at the Jefferson Chalmers Neighborhood Celebration on Thursday, Feb. 28 at 12:30 p.m. for networking and appetizers provided by Norma G's Caribbean Cuisine and a hard hat tour of the Marlborough and IDAO Apartment Buildings.
This article is part of our "On the Ground" series, where a journalist reports from a dedicated neighborhood for weekly coverage. Support for this series is provided by the Kresge Foundation.