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Joining the condo line

David Naczycz wants to buy a condominium. And he wants it to be in Detroit. Not many years ago, the 31-year-old consultant and Madison Heights native, a 6-foot-tall white male, would have stuck out like a sore thumb in this predominantly black and poor section of the midtown enclave commonly referred to as the Cass Corridor. But he’s lived in a rented apartment in the neighborhood for a few years, and says there has been a marked change.

“The neighborhood is very walkable, actually,” he says with a laugh. “It’s not the Cass Corridor of old, it’s pretty safe. Plus, I don’t want my own yard to maintain.”

Naczycz (pronounced Na-chizz) says his experience living in Manhattan created an affinity for urban living. He feels safe, energized by the activities and the sounds of the city.

He also says the increase in young professionals, couples, students and professors moving into the area means the neighborhood is diversifying. So now he’s in the market for a condominium, an apartment-style living space that he would purchase, while paying a monthly fee to a company that would care for the grounds outside the building for him and neighboring residents.

Area developers and city officials, eager to accommodate, and capitalize, off people like Naczycz, are in the throes of a condo building boom. The trend began around 1997, with the erection of projects outside of downtown Detroit such as Indian Village Manor on the east side, Campau Farms in Lafayette Park and the Corktown Condominiums.

Henry Hagood, development director for the Detroit Planning and Development Department, says that at least 19 condo developments are currently under way. Hagood says the city’s goal is to have 750 new residential housing units by the end of next year.

The condos are being built to accommodate the growing trend of homeowners who, like Naczycz, prefer them to traditional single-family homes. They are people who tend to be young professionals with no children, or older empty nesters looking to downsize after their kids have left, according to real estate experts. They desire the density of urban life, as well as shopping and nightlife within walking distance.

So popular are condos that people are spending from $100,000 to more than $300,000 to buy them.

Liz Tintinalli, a Detroit-based real estate agent who represents Naczycz, says condos are her fastest-selling homes. She says single-family units, such as the ones that comprise a portion of the Woodbridge Estates, are struggling to keep pace.

Detroit, according to Hagood, began experiencing the condo trend when corporations such as Compuware and OnStar opened downtown headquarters, bringing in more people who fit the condo demographic.

The Chicago-based Midwest Real Estate News reported in August that Detroit has built 677 condo units over the past 10 years and has 1,432 units under construction. Detroit is far outpaced by Chicago’s 32,000 condo units built over the last decade, but is building at a pace comparable to cities like Milwaukee and Minneapolis.

Developments located within Neighborhood Enterprise Zones (NEZ), which were created by the state of Michigan to spur growth in distressed areas, provide the added incentive of reduced property taxes.

Colin Hubbell, a developer who manages the Hubbell Group, says they also benefit developers.

“If I buy my house and have to pay eight or ten thousand dollars a year in taxes, it’s not very marketable,” he says. “But if I buy in an NEZ and receive a reduction, it’s good marketing.”

Much of the Detroit activity takes the shape of an inverted T stretching south from the New Center area along the Woodward corridor, spiking east and west just north of downtown.

City officials say that the abundance of large apartment-style buildings, suitable structures for condo development, combined with downtown business development, make the area attractive to developers.

The face of change

There are three general types of projects under way.

There are newly constructed condos built from the ground up, such as the forthcoming Ellington at the corner of Woodward and Mack avenues, and Woodward Place, constructed near Comerica Park three years ago.

Others projects involve the renovation of older buildings. The Leland Pavilion, for example, near I-75 and Rivard, is formerly the long-vacated Leland School for disabled children.

Also occurring is the conversion of existing apartments into condos. The Park Shelton and the Riverfront Towers are two examples. These projects have been scrutinized by members of the Detroit City Council, and criticized by renters forced to move if they have neither the means nor the desire to buy.

These latter developments seem to be spurred by low interest rates, which make mortgage payments competitive with rents.

The Riverfront Towers start at $100,000. Since buyers can combine units, there is no set ceiling price. Park Shelton condos sell from less than $100,000 to $250,000.

Council President Maryann Mahaffey says City Council supports the condo trend, but also cites a 1980 city ordinance that insures “protection for the people who live there” prior to the conversions. The ordinance requires that permanent leases be granted to qualified seniors, and that renting tenants be given the first right of refusal.

It also requires developers to notify tenants via certified letter before placing units on the market.

Issues like these have also led experts and members of the Detroit City Council to voice concerns about possible gentrification — the improvement of a neighborhood, which often results in the displacement of lower-income residents — of neighborhoods in which condos are being built.

George Galster, a professor of Urban Affairs at Wayne State University’s College of Urban, Labor and Metropolitan Affairs, has debated gentrification extensively, and suggests that it has positive aspects.

According to Galster, gentrification can improve the quality of life for everyone in a neighborhood when vacant buildings are turned into condos. This, he says, eradicates blight and creates a demand for neighborhood retail as locales become populated residential areas.

Of course, not every condo project in Detroit is a rehab of a vacant building. And rental conversions, he admits, is where gentrification can be negative.

“The people are already there,” he says, adding that the key issue to address is where the buyers will come from, and where displaced renters will go. He is optimistic, however, about how it can work.

“Let’s take the best case scenario. If the buyer comes from outside, and the displaced renter stays in the city to rent again, that’s a net increase for the city.”

Hubbell, a native Detroiter, says gentrification is an issue to developers, and not everyone deals with it correctly. “I think it can be dealt with, but you need to do it with sensitivity to history, and to the folks who have been there.

“Raise the word ‘gentrification’ to some, it’s positive. To others, it’s negative. I think it’s both, and I think it’s important to have diversity in values, in ethnicity. A lotta folks just wanna build some white-bread shit, and say put ‘those’ folks on a train and send them outta here.”

Even if gentrification proves healthy, and rental conversions help the city, Mahaffey argues that they will not single-handedly solve the problem of urban flight. Having reached a peak of nearly 2 million in the 1950s, the city’s population continues to drop, falling from 951,270 in 2000 to 911,402, according to the most recent Census Bureau estimates.

In another note of caution, Kurt Metzger, vice president of Wayne State’s Center for Urban Planning, says the long-term viability of these projects is not guaranteed. Optimism on the part of developers, city officials and buyers is undeniable. Metzger notes that even he and his wife have looked at condos. But he wonders whether the enthusiasm will continue, and if condos will continue to hold their value in years to come as the current generation of buyers matures, and develops the need for single-family homes.

“When they marry and decide a condo is not feasible, what do you do?” he says. “The kids coming behind them aren’t having the same numbers of kids as the baby boomer generation. Will [condos] become a market for the older generation?”

Galster guesses that a growing variety of household arrangements — same-sex couples, spouses who don’t want children, retirees — means there will continue to be a demand for the simplicity provided by condos.

Both say it’s too soon to tell for certain. For now, though, condos are an undeniably hot commodity in a city that desperately needs to see more people moving in than out.

Khary Kimani Turner is a Metro Times staff writer. Send comments to kturner@metrotimes.com

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