Hey everyone,
Conditions at properties owned by the Detroit Housing Commission (DHC) were substandard earlier this year when we published our investigative series on Detroit’s largest provider of affordable housing. The commission’s CEO Sandra Henriquez promised improvement by the end of the year. We wanted to follow-up, but new inspection scores aren’t being made public.
We continue to field calls from disgruntled DHC tenants complaining about a lack of hot water, no heat in the winter, flooding, broken doors and windows, and roaches. This week, we detail our efforts to learn about the scope of the DHC’s property woes and what the DHC board and staff intend to do.
There was also a lot of real estate news in Detroit this week. The City of Detroit reached a settlement with Dollar Tree over blight tickets, and the cheap chain store got a hefty discount on its fines. Elsewhere, negotiating over land continues to hold up the District Detroit, the Joe Louis Greenway build-out proceeds step-by-step, and Wayne State University plans a new $40 million building for its law school.
As always, thanks for reading.
The Dirt
>>Dollar stores being cheap: Dollar stores can offer goods and food to areas with few other options. In Detroit, they also contribute to blight: overgrown sidewalks and parking lots and trash the stores don’t pay to clean up. Dollar Tree Inc. alone has racked up over $740,000 in unpaid finds for more than 2,400 blight tickets. The city recently settled with the chain, which also owns Family Dollar, for just $150,000 and assurances it follows a regular maintenance schedule. Dozens of cities have banned or restricted the development of dollar stores (paywalled), and now City Councilmember Angela Whitfield Calloway wants to temporarily ban new dollar stores in Detroit. Dollar Tree and Family Dollar have around 50 locations in the city, according to their official websites, and they are far from the only dollar stores here. (BridgeDetroit, MLive)
>>Pay to play: Olympia Development of Michigan LLC still hasn’t come to an agreement with the obscure Detroit/Wayne County Stadium Authority to purchase the land it needs to break ground on its $1.5 billion District Detroit expansion. Richard Kaufman, a negotiator for Wayne County, said the two parties have agreed on a sale price of about $35 million. The main sticking point is the portion of those proceeds that would go to the county and how much would go to the authority, which owns Comerica Park. There is speculation the authority’s share would go back to the Ilitches for improvements to the stadium. An Ilitch executive recently teased “significant changes” to the ballpark, but funding sources have not been disclosed for the work. (Outlier Media, Axios Detroit, Detroit News)
>>Building out and around: The long-awaited Joe Louis Greenway is more than 25% complete (paywalled). A new trailhead at West Warren Avenue and McDonald Street called the Warren Gateway includes a $6 million playground, pavilion and park near the Dearborn border opened as part of the 29.5-mile loop for pedestrians and cyclists. The city said it’s looking to finish the entire $350 million greenway in the next five to 10 years. (Crain’s Detroit Business, Michigan Chronicle)
>>Core issue: Philip Kafka is mystified by an emergency demolition order the city issued for one of his buildings. The Core City developer has completed developments for a number of buildings in the area. Kafka is using a former rail yard targeted for demolition as storage and said he planned on redeveloping the site into a music-centric “cultural center” as early as next summer. The city didn’t respond to questions from reporters. (WDET)
>>Development news quick-hitters: Wayne State University is planning a new $40 million law school building (paywalled) and has already secured $30 million for the project in the state budget… A $16 million development for veterans at risk of homelessness and disabled tenants broke ground last week near 8 Mile Road and Van Dyke Street. The 50 units at the Benjamin O. Davis Veterans Village will be supported by vouchers to ensure residents pay only 30% of their income on rent… The city is offering grants up to $45,000 to landlords who own two- or three-unit properties to bring them up to code so they can be rented out below market rate. The $2.3 million program will support nearly 150 rental units… The city constructed a new $7.9 million community center in Jefferson Chalmers equipped with climate resilient features like a solar array and green stormwater infrastructure. (Crain’s, Fox 2 Detroit, City of Detroit, Detroit Free Press, Planet Detroit)
>>Change agents: A jury in federal court ruled that home sellers no longer have to pay brokerage fees for the buyer, upending decades of real estate practices. Instead of sellers paying around 5-6% of the cost of the home, agent rates are no longer fixed according to rules set by the National Association of Realtors (NAR). The ruling also awarded damages of $1.8 billion to the home sellers against the NAR and several large brokerages, claiming collusion among them. It may take some time for the effects to be felt locally (paywalled), since the defendants plan to appeal the decision. But real estate experts said eventually commissions might go down and banks might include the cost of brokerage fees in mortgage loans. (New York Times, Crain’s)
Dig This
Detroit Housing Commission stopped making inspection reports public after recent failures
Nearly every property owned by the city’s largest provider of affordable housing, the DHC, failed inspections the last time it made scores public. That was more than two years ago.
Earlier this year, Outlier Media documented appalling conditions at properties owned by the DHC. The commission’s CEO Sandra Henriquez promised improvement, saying “the 2023 scores are going to be better.”
We can’t know if Henriquez has made good on her pledge because the DHC hasn’t made their most recent inspections public.
The Spin
“Great news! Please leave”
Residents of the Addison building in Midtown worried they’d have to move out of their apartments earlier this year because of flood damage. Instead, it’s rent increases that might push current tenants out.
When developer Joel Landy died in 2020, his estate went to a trust controlled by his lawyer Joseph Kopietz. Tenants of the Addison complained about his handling of the flood and stewardship of the historic building on Woodward Avenue and Charlotte Street. Many stayed despite the issues because it was one of the more affordable places in Midtown. Kopietz ultimately sold the building to a partnership of developer Civic Companies and real estate financier Kevin Kovachevich.
The new owners promised residents they’d be able to stay in their apartments. That’s no longer true.
Axios Detroit reporter Samuel Robinson got a copy of a letter sent to tenants by property management company Peak Management. The letter shared “some exciting news.” Current tenants can reserve an apartment in the renovated Addison — with rents between $1,350 and $2,245 — and get a $200 monthly discount. These renovated apartments have a higher-than-average price per square foot compared to other Midtown units, according to RentCafe.
If they don’t want to accept those higher rents they’ll have to leave. Permanently. “We kindly request you vacate” by Dec. 31, the letter says. Robinson, a former tenant at the Addison, told us that both the owner and property manager told him earlier this year no one would be “kicked out.” All the tenants are on month-to-month leases and will have little recourse.
We’ve seen lots of attempts to spin unpleasant news into something positive, but this one is up there with the best (worst?).
One Good Map
A parcel-level view of changing taxes
The Dig favorite Detroitography published a fascinating and useful interactive map of how Mayor Mike Duggan’s proposed Land Value Tax Plan would affect every residential parcel in Detroit.
The proposed tax plan would increase tax on vacant land while decreasing it for buildings on the land. Duggan has claimed that 97% of Detroit homeowners would see a reduction in property taxes.
Designer Pat Sier created the map using data from a public city server for the land value tax estimator released by the city last week. Users can see every parcel’s 2023 tax bill, proposed taxes under the Land Value Tax Plan and estimated change between the two.
A cursory glance shows the vast majority of residential properties would in fact see a reduction in taxes. It’s also interesting to note where they would increase. Most of the properties in Midtown would have higher property taxes, likely because the land there is so valuable. Other scattered parcels with higher taxes show they’re incredibly low to begin with. For example, the 2023 tax bill at 14915 West Chicago St. is just $76.89. Recent images of the property suggest it’s abandoned.