Detroit Hotel Residents, Many Low-income, Given 30 Days to Move
Allie Gross, Detroit Free Press
8:45 a.m. ET Oct. 11, 2018
(Photo: Junfu Han, Detroit Free Press)
People living at Park Avenue House — a hotel at 2305 Park Ave. known as an affordable housing option in the city — received notices this past weekend that they have 30 days to vacate.
The news, which was accompanied by rumors that the building has been sold, highlights the continued development and interest in downtown Detroit but also draws attention to limited affordable housing options in an increasingly desirable city.
"As one of the last affordable places to live, this is displacing many poor and low-wage working people," resident Richard LaBelle wrote in an email to the Detroit Free Press. "It is a shame, and it would be nicer if we had more time, or some assistance — at least some publicity in our plight!"
Details of the building's sale — what is believed to have spurred the notices — are fuzzy. The Wayne County Register of Deeds and City Assessor's office have yet to show documentation of a sale. As of Sept. 27, the 180-unit, 13-story building, which also houses the Town Pump Tavern and is just south of Little Caesars Arena, was listed for $15 million, according to CPIX, a commercial real estate information exchange.
The Free Press made multiple attempts to reach out to the building's manager Sean Harrington but it has yet to hear back.
Listed on the National Register of Historic Places, the Park Avenue House has a uniquely Detroit history. Originally called the Royal Palm, it was one of three hotels designed by architect Louis Kamper for Detroit hotelier Lew Tuller in the early 20th Century. The trio — which also included the Eddystone (currently owned by the Ilitches) and the Park Avenue Hotel (demolished by the Ilitches in 2015) — were known by Tuller as the "Three Sisters."
In 1976, Wilbur and Catharina Harrington purchased the building for $89,275 and renamed it the Park Avenue House. In 1994, they signed a quit-claim deed selling the property for $150,000 to Harrington Properties Inc., whose resident agent is Sean Harrington, the couple's son.
Today, the younger Harrington manages the building, which, over time, became less a spot for transient guests and more — with its low weekly, biweekly and monthly rates — a home catering to those with limited incomes or cash flow problems. Sean Harrington also owns other establishments on the bustling block such as Hot Taco, the Iodent Lofts and Centaur Lounge.
While stories of business owners combating Detroit's toughest times and being able to make a profitable sale after years of hardship are typically celebrated, when the business is also a home, and the sale means displacement, the news is complicated.
"There is not a lot there anyway, there are not a lot of places for these folks to turn," said Ted Phillips, the executive director of United Community Housing Coalition, a local nonprofit that works on housing affordability issues in the city.
"The typical thing is that folks like this will feel very pressured. They don't want to be shut out at the end of November, beginning of December, they don't want to have to go to court and all of that, so they're probably going to grab what they can, which is always a bad, bad sign," Phillips continued, explaining that while his organization is set to lose 90 percent of its housing placement funding by the new year, he hopes it will be able to help some of the soon-to-be-former tenants of Park Avenue House.
"Some, but not soon," Philips wrote via text about his program's capacity to help — an admission to the crunch those working on these issues are feeling when it comes to dealing with Detroit's affordability crisis.
And even with support, according to Philips, finding comparable prices in the same area is going to be difficult.
LaBelle, who has lived in the building for three years, says he pays $920 for a double (two hotel rooms conjoined). However, most tenants pay about $600-650, he said, with some who have been in the building for years paying as low as $500 (rooms range in size from studios to doubles).
For a comparison of prices, last month it was announced that Dan Gilbert's David Stott building would soon be reopened and available for tenants. Studios (418 square feet to 570 square feet) would rent for $1,420 to $1,540 per month, and one-bedrooms (593 square feet) would rent for $1,920 to $2,100 per month.
And it's not just downtown with the surging prices. Last month, a spokesperson for the City of Detroit told Bridge that rents citywide are up about 25 percent to more than $800 a month.
With nearly 40 percent of Detroit's residents straddling the poverty line, increasing rents have created a conundrum. According to the Urban Institute, nearly 60 percent of renters in Detroit are considered "rent burdened," which means they spend more than 30 percent of their income on housing. This is 10 percent higher than the national average.
The reality — especially when it comes to downtown — is something Park Avenue House residents are concerned about.
"A lot of my neighbors can walk to work right now," explained LaBelle, who works for Mayor Mike Duggan's Work Force Development Board and categorizes himself as part of what he calls the 2 percent of the building that feels confident they will land on their feet.
"People appreciate being downtown, they come from the east or west side and say it's nice to be in a safer environment," he continued, recalling how a neighbor, upon hearing the news this past weekend, told him she would now "have to go back to the hood" and hates this fact.
This fear was reiterated by others in the building.
"A lot of people want to stay in the city but they can't afford it. That's a big concern" said a tenant who declined to give her name given the sensitivity of the topic but who has lived in the building for eight years.
"I'm telling tenants to take a lot of pictures, we're at the end of an era," the tenant continued, pointing out that the building's location used to be a heavy spot for drug use and prostitution but ultimately came out the other side. "We survived all of this."
For Brian Demarest, who has lived in the building for nearly two years, it is the short time frame to find a new place that has him most anxious.
“Thirty days isn’t a lot of time, that’s what makes me nervous,” said the 49-year-old who grew up Downriver, bouncing between Taylor, Inkster and Westland for years before deciding to give Detroit a shot in December 2016.
Landing at the Park Avenue House at the suggestion of his friend LaBelle, Demarest pays $680 for a studio with a kitchen. He had planned to stay for the long haul — pointing to his spectacular view of the city as a real drawing point.
“I paid my rent the 3rd and got the eviction on the 5th,” he said, explaining that he works at a screw machine shop on Grand and Martin Luther King.
“I’ll draw a circle around that and try to find something in the area,” he said, explaining that his current mode of transportation is a bicycle. “I need to find something biking distance.”
What will be possible with his budget and transportation restrictions is still unknown. He's been searching online for places in southwest Detroit — another neighborhood that has attracted more interest in recent years and at a heightened pace in recent months with news of Ford's move to the Corktown neighborhood.
"I hate to say it," Demarest said. "I think this mayor did a really great job cleaning up the city but then it got too expensive and you can't afford to live here. If you don't qualify for low-income assistance you got to be really well off, when you're just stuck in the middle it's really hard."
According to a 2016 study commissioned by the Detroit's Housing and Revitalization Department, fewer than a quarter of the rental units in Detroit are affordable to "extremely low-income households." The current housing stock, the study wrote, "lacks adequate units affordable to households with an income under 30 percent Area Median Income."
Complicating this statement is the fact that the Area Median Income used in this study — and by the city at large — includes outlying suburbs, specifically the Detroit-Warren-Livonia metropolitan statistical area. The result is an inflated AMI, which skews out of the favor of actual Detroiters (while the AMI of a single person is $48,000 according to city literature, the true median income in Detroit is $28,000 — a 71-percent difference).
In other words, when the city study says Detroit "lacks adequate units affordable to households with an income under 30 percent Area Median Income" this figure is based off an inflated AMI.
Today in Detroit, low-income individuals have three options when it comes to renting. They all come with problems — namely a lack of actual availability.
A person can live in public housing, which are units run by the Detroit Housing Commission. There are 3,340 units under the organization's purview. In April, they were at 95-percent occupancy. The waiting list, which is currently closed, was holding 5,760 individuals at the time.
A second option is a housing voucher — known colloquially as Section 8 — which gives a person a rental subsidy, which can then be used at any unit at which a landlord decides to accept it. The waiting list for the city's housing voucher program, which has been closed since 2014, has 6,000 people on it. As of April, 140 vouchers were issued, according to the Detroit Housing Commission.
Finally, one can look for so-called affordable housing. These are units that are built through the Low-Income Housing Tax Credit (LIHTC), which gives developers tax subsidies in exchange for building a certain number of "affordable" housing units that accommodate those living below the Detroit-Warren-Livonia AMI.
According to a study by University of Michigan researchers, called Saving Decent Affordable Housing in Detroit, however, 7,000 apartments and homes under the LIHTC are going to hit their 15-year mark between 2016 and 2022 — at this point development owners can apply with state officials to stop setting aside units for low-income families.
The City of Detroit is in the process of a five-year fundraising campaign to bring in $250 million for affordable housing that would save 10,000 set-to-expire units and create an additional 2,000 units.
“It’s important to say to people who stayed in Detroit, ‘We’re going to keep your units affordable,’” Arthur Jemison, the City of Detroit’s chief of services and infrastructure who oversees the housing and revitalization department, told Bridge last month.
Complicating the evictions at Park Avenue House is the fact that the building does not fall into any of three listed categories above. No developer received LIHTC funds. It's not run by the Detroit Housing Commission. It doesn't take Section 8 vouchers. Technically, it's market rate — it has just been priced, on its own, at an affordable price, likely, according to Philips, because it could not fill up as a hotel.
This reality makes it a bit more difficult for any outside body to weigh in.
Had Park Avenue House received HUD funding, for example, residents would have had some protection or at least a bit more of a cushion.
Section 8 subsidized buildings must give residents a full-year notice before converting into something else. This is what happened at 1214 Griswold, which, in March 2013, told more than 100 low-income seniors, many with disabilities, that they had a year before Broder & Sachse Real Estate Services would redevelop the building into luxury apartments known as The Albert. All of them were able to find new placement with the longer time frame — this was in part because of the year deadline but also because of the fact that the residents were already in the city's housing voucher program.
With less than 150 vouchers issued in the first four months of the year, and the waiting list closed, entry now into the program could be difficult.
The hybrid housing situation — a hotel acting as a landlord, an affordable housing option operating outside of regulation — is one the City of Detroit is still working to understand.
"We're aware of this," said Jemison, who explained that the city is taking the eviction notices "very seriously" while also still "fact-finding" around what happened as details on the sale are so scant. "I think the basic message I'd share is the mayor is being very clear that there are no incentives for people who displace Detroiters."
"We are going to use any instrument in our portfolio," he continued, "to make sure people have safe, clean and decent housing."
8:45 a.m. ET Oct. 11, 2018
(Photo: Junfu Han, Detroit Free Press)
People living at Park Avenue House — a hotel at 2305 Park Ave. known as an affordable housing option in the city — received notices this past weekend that they have 30 days to vacate.
The news, which was accompanied by rumors that the building has been sold, highlights the continued development and interest in downtown Detroit but also draws attention to limited affordable housing options in an increasingly desirable city.
"As one of the last affordable places to live, this is displacing many poor and low-wage working people," resident Richard LaBelle wrote in an email to the Detroit Free Press. "It is a shame, and it would be nicer if we had more time, or some assistance — at least some publicity in our plight!"
Details of the building's sale — what is believed to have spurred the notices — are fuzzy. The Wayne County Register of Deeds and City Assessor's office have yet to show documentation of a sale. As of Sept. 27, the 180-unit, 13-story building, which also houses the Town Pump Tavern and is just south of Little Caesars Arena, was listed for $15 million, according to CPIX, a commercial real estate information exchange.
The Free Press made multiple attempts to reach out to the building's manager Sean Harrington but it has yet to hear back.
Listed on the National Register of Historic Places, the Park Avenue House has a uniquely Detroit history. Originally called the Royal Palm, it was one of three hotels designed by architect Louis Kamper for Detroit hotelier Lew Tuller in the early 20th Century. The trio — which also included the Eddystone (currently owned by the Ilitches) and the Park Avenue Hotel (demolished by the Ilitches in 2015) — were known by Tuller as the "Three Sisters."
In 1976, Wilbur and Catharina Harrington purchased the building for $89,275 and renamed it the Park Avenue House. In 1994, they signed a quit-claim deed selling the property for $150,000 to Harrington Properties Inc., whose resident agent is Sean Harrington, the couple's son.
Today, the younger Harrington manages the building, which, over time, became less a spot for transient guests and more — with its low weekly, biweekly and monthly rates — a home catering to those with limited incomes or cash flow problems. Sean Harrington also owns other establishments on the bustling block such as Hot Taco, the Iodent Lofts and Centaur Lounge.
While stories of business owners combating Detroit's toughest times and being able to make a profitable sale after years of hardship are typically celebrated, when the business is also a home, and the sale means displacement, the news is complicated.
"There is not a lot there anyway, there are not a lot of places for these folks to turn," said Ted Phillips, the executive director of United Community Housing Coalition, a local nonprofit that works on housing affordability issues in the city.
"The typical thing is that folks like this will feel very pressured. They don't want to be shut out at the end of November, beginning of December, they don't want to have to go to court and all of that, so they're probably going to grab what they can, which is always a bad, bad sign," Phillips continued, explaining that while his organization is set to lose 90 percent of its housing placement funding by the new year, he hopes it will be able to help some of the soon-to-be-former tenants of Park Avenue House.
"Some, but not soon," Philips wrote via text about his program's capacity to help — an admission to the crunch those working on these issues are feeling when it comes to dealing with Detroit's affordability crisis.
And even with support, according to Philips, finding comparable prices in the same area is going to be difficult.
LaBelle, who has lived in the building for three years, says he pays $920 for a double (two hotel rooms conjoined). However, most tenants pay about $600-650, he said, with some who have been in the building for years paying as low as $500 (rooms range in size from studios to doubles).
For a comparison of prices, last month it was announced that Dan Gilbert's David Stott building would soon be reopened and available for tenants. Studios (418 square feet to 570 square feet) would rent for $1,420 to $1,540 per month, and one-bedrooms (593 square feet) would rent for $1,920 to $2,100 per month.
And it's not just downtown with the surging prices. Last month, a spokesperson for the City of Detroit told Bridge that rents citywide are up about 25 percent to more than $800 a month.
With nearly 40 percent of Detroit's residents straddling the poverty line, increasing rents have created a conundrum. According to the Urban Institute, nearly 60 percent of renters in Detroit are considered "rent burdened," which means they spend more than 30 percent of their income on housing. This is 10 percent higher than the national average.
The reality — especially when it comes to downtown — is something Park Avenue House residents are concerned about.
"A lot of my neighbors can walk to work right now," explained LaBelle, who works for Mayor Mike Duggan's Work Force Development Board and categorizes himself as part of what he calls the 2 percent of the building that feels confident they will land on their feet.
"People appreciate being downtown, they come from the east or west side and say it's nice to be in a safer environment," he continued, recalling how a neighbor, upon hearing the news this past weekend, told him she would now "have to go back to the hood" and hates this fact.
This fear was reiterated by others in the building.
"A lot of people want to stay in the city but they can't afford it. That's a big concern" said a tenant who declined to give her name given the sensitivity of the topic but who has lived in the building for eight years.
"I'm telling tenants to take a lot of pictures, we're at the end of an era," the tenant continued, pointing out that the building's location used to be a heavy spot for drug use and prostitution but ultimately came out the other side. "We survived all of this."
For Brian Demarest, who has lived in the building for nearly two years, it is the short time frame to find a new place that has him most anxious.
“Thirty days isn’t a lot of time, that’s what makes me nervous,” said the 49-year-old who grew up Downriver, bouncing between Taylor, Inkster and Westland for years before deciding to give Detroit a shot in December 2016.
Landing at the Park Avenue House at the suggestion of his friend LaBelle, Demarest pays $680 for a studio with a kitchen. He had planned to stay for the long haul — pointing to his spectacular view of the city as a real drawing point.
“I paid my rent the 3rd and got the eviction on the 5th,” he said, explaining that he works at a screw machine shop on Grand and Martin Luther King.
“I’ll draw a circle around that and try to find something in the area,” he said, explaining that his current mode of transportation is a bicycle. “I need to find something biking distance.”
What will be possible with his budget and transportation restrictions is still unknown. He's been searching online for places in southwest Detroit — another neighborhood that has attracted more interest in recent years and at a heightened pace in recent months with news of Ford's move to the Corktown neighborhood.
"I hate to say it," Demarest said. "I think this mayor did a really great job cleaning up the city but then it got too expensive and you can't afford to live here. If you don't qualify for low-income assistance you got to be really well off, when you're just stuck in the middle it's really hard."
According to a 2016 study commissioned by the Detroit's Housing and Revitalization Department, fewer than a quarter of the rental units in Detroit are affordable to "extremely low-income households." The current housing stock, the study wrote, "lacks adequate units affordable to households with an income under 30 percent Area Median Income."
Complicating this statement is the fact that the Area Median Income used in this study — and by the city at large — includes outlying suburbs, specifically the Detroit-Warren-Livonia metropolitan statistical area. The result is an inflated AMI, which skews out of the favor of actual Detroiters (while the AMI of a single person is $48,000 according to city literature, the true median income in Detroit is $28,000 — a 71-percent difference).
In other words, when the city study says Detroit "lacks adequate units affordable to households with an income under 30 percent Area Median Income" this figure is based off an inflated AMI.
Today in Detroit, low-income individuals have three options when it comes to renting. They all come with problems — namely a lack of actual availability.
A person can live in public housing, which are units run by the Detroit Housing Commission. There are 3,340 units under the organization's purview. In April, they were at 95-percent occupancy. The waiting list, which is currently closed, was holding 5,760 individuals at the time.
A second option is a housing voucher — known colloquially as Section 8 — which gives a person a rental subsidy, which can then be used at any unit at which a landlord decides to accept it. The waiting list for the city's housing voucher program, which has been closed since 2014, has 6,000 people on it. As of April, 140 vouchers were issued, according to the Detroit Housing Commission.
Finally, one can look for so-called affordable housing. These are units that are built through the Low-Income Housing Tax Credit (LIHTC), which gives developers tax subsidies in exchange for building a certain number of "affordable" housing units that accommodate those living below the Detroit-Warren-Livonia AMI.
According to a study by University of Michigan researchers, called Saving Decent Affordable Housing in Detroit, however, 7,000 apartments and homes under the LIHTC are going to hit their 15-year mark between 2016 and 2022 — at this point development owners can apply with state officials to stop setting aside units for low-income families.
The City of Detroit is in the process of a five-year fundraising campaign to bring in $250 million for affordable housing that would save 10,000 set-to-expire units and create an additional 2,000 units.
“It’s important to say to people who stayed in Detroit, ‘We’re going to keep your units affordable,’” Arthur Jemison, the City of Detroit’s chief of services and infrastructure who oversees the housing and revitalization department, told Bridge last month.
Complicating the evictions at Park Avenue House is the fact that the building does not fall into any of three listed categories above. No developer received LIHTC funds. It's not run by the Detroit Housing Commission. It doesn't take Section 8 vouchers. Technically, it's market rate — it has just been priced, on its own, at an affordable price, likely, according to Philips, because it could not fill up as a hotel.
This reality makes it a bit more difficult for any outside body to weigh in.
Had Park Avenue House received HUD funding, for example, residents would have had some protection or at least a bit more of a cushion.
Section 8 subsidized buildings must give residents a full-year notice before converting into something else. This is what happened at 1214 Griswold, which, in March 2013, told more than 100 low-income seniors, many with disabilities, that they had a year before Broder & Sachse Real Estate Services would redevelop the building into luxury apartments known as The Albert. All of them were able to find new placement with the longer time frame — this was in part because of the year deadline but also because of the fact that the residents were already in the city's housing voucher program.
With less than 150 vouchers issued in the first four months of the year, and the waiting list closed, entry now into the program could be difficult.
The hybrid housing situation — a hotel acting as a landlord, an affordable housing option operating outside of regulation — is one the City of Detroit is still working to understand.
"We're aware of this," said Jemison, who explained that the city is taking the eviction notices "very seriously" while also still "fact-finding" around what happened as details on the sale are so scant. "I think the basic message I'd share is the mayor is being very clear that there are no incentives for people who displace Detroiters."
"We are going to use any instrument in our portfolio," he continued, "to make sure people have safe, clean and decent housing."
No comments:
Post a Comment