The Wealthy Heights Revitalization Project
A Habitat for Humanity and Dwelling Place Collaboration
BACKGROUND
Since Dwelling Place was formed in 1980, the organization has developed a wide array of
affordable housing for low to moderate income individuals and families. While much of it is
located in the Heartside neighborhood, in downtown Grand Rapids, Dwelling Place has also
developed a substantial portfolio of housing partnerships in other city neighborhoods as well as
other West Michigan communities. One of those partnerships is located in the East Hills
Neighborhood, where Dwelling Place already owns 2 commercial properties that offer both
residential and retail venues on Wealthy Street. The East Hills Neighborhood is one that is
changing as the area has attracted interest from an increasingly diverse population including
young families, artists, gay and lesbian households and many other groups with a strong interest
in revitalization of urban neighborhoods. To date the amount of displacement of the low income
households who have lived in the neighborhood for many years has been limited. The
neighborhood would like to encourage the continued revitalization of this area while at the same
time preserving affordability for homeownership.
THE ORIGINAL PLAN
In 2005 Dwelling Place was asked to participate in the creation of a unique form of housing
development called a Community Land Trust (CLT). CLTs provide opportunities for
homeownership to low income households while at the same time preserving the affordability for
home ownership in perpetuity through provisions within the CLT structure. Development of a
community land trust (CLT) was identified as a strategy for supporting neighborhood
revitalization while at the same time developing permanently affordable housing. Community
land trusts, now in operation in more than 100 communities in the U.S., have an impressive
record of achieving sustainable housing affordability. CLTs purchase property, hold the land in
perpetuity, and sell the housing on the land (the improvements) to low and moderate income
buyers through long-term “ground leases.”
The target area for creation of the community land trust was a part of the East Hills
Neighborhood which has not experienced the resurgence seen in other areas of the neighborhood.
The 40 parcel area which is the focus of this initiative is comprised of five short residential
streets running north of Wealthy between Fuller and Diamond Avenues and a short residential
segment of Wealthy Street. The dead-end pattern of four of the streets has served to isolate them
geographically. The high level of absentee ownership has contributed to deterioration of the
housing stock and increased the difficulty of sustaining resident involvement in revitalization
activities.
Land control was identified as a key issue to get this project off the ground. A unique
opportunity presented itself in 2006 to acquire 9 existing housing units from Community
Rebuilders, a local non profit agency who, at the time, were seeking debt relief by selling nine of
its Wealthy Heights properties. Through a Program Related Investment (PRI) 2% interest loan of
$462,025 from the Grand Rapids Community Foundation, Dwelling Place was able to acquire all
of these parcels at approximately 70% of their appraised values at that time. Dwelling place had
been operating these housing units as rental properties anticipating the potential to eventually
incorporate them into a CLT initiative that would include:
1. Renovation and sale of 5 of the Community Rebuilder units
2. Demolition on the sites of the remaining 4 Community Rebuilder units with one being
sold to the City of Grand Rapids for a planned street connector while the other three sites
would include new construction “for sale” units. (The demolition portion of the project
received approval from the Historic Preservation Commission and the Planning
Commission subject to submission of acceptable plans for redevelopment of the 3 home
sites)
3. Eventual acquisition and new construction of 4 additional “for sale” units on 4 city
owned lots
During subsequent years, Dwelling Place and the East Hills Neighborhood Association were able
to complete a number of steps on the way to implementation of this plan including the following:
1. Acquisition of 9 parcels for redevelopment with $462,025 loan from Grand Rapids
Community Foundation
2. Options of 4 city lots for new development
3. Approval of a Neighborhood Enterprise Zone (NEZ) for tax abatements in this area
4. Completion of a streetscape design plan for this area
5. Completed designs for 3 different new homes to be built on the vacant lots and the sites
where demolition was to occur.
6. Secured $520,000 of Grand Rapids City HOME funds and an increase in that allocation
to $756,000
7. Secured a commitment from MSHDA for $75,000 per unit for three (3) homes to be
rehabilitated which was later increased to six (6) homes
8. Secured $30,000 in Predevelopment Funds from the Dyer Ives Foundation
PROBLEMS CAUSED BY THE ECONOMY
The economic downturn in 2008 that has devastated the housing market nationally has also
affected the viability for this project as it was originally envisioned. Property values have
plummeted and even homes developed for sale by other area non-profit groups are sitting idle for
lack of interested and qualified buyers. Mortgage qualifications for loans are now much more
difficult for households under 80% of the area median income. Foreclosures are also at an all
time high and the impact of this fact can be found in every neighborhood within the city,
including East Hills.
Given these conditions we determined that this project needed to be altered in order to be
successful. Community Land Trusts, by their nature, have more restrictions than conventional
mortgages and home purchases. Buyers are asked to give up a portion of appreciation from the
future sale of their property in return for purchasing the property at a price that is substantially
below its appraised value. In the present environment this would appear to be a major barrier to
overcome without some unusual circumstance or intervention. Both the City of Grand Rapids
and MSHDA indicated they would not consider allocating any HOME funds for a community
land trust project unless there was evidence of qualified buyers ready and able to purchase these
homes.
A NEW PLAN
One organization that does have qualified buyers on a waiting list and has had success in
building and selling homes to low and moderate income households, in spite of this economy, is
Kent County Habitat for Humanity. The idea for collaboration between Dwelling Place and
Habitat emerged in 2008 during the height of the recession, when it became apparent that the
original plan could not succeed. A number of factors were identified that were seen as positive
indicators that this new plan would be likely to succeed.
1. The East Hills Neighborhood has completed extensive analysis of the area culminating in
several reports with recommendations for design and development that have served as the
basis for the entire planning process (See attached “Neighborhood Enhancement Study
Report” from 2008).
2. Dwelling Place secured land control for 13 of the 40 parcels (including acquisition of 9
homes and options on 4 city owned lots) in the targeted area. Three (3) of those nine (9)
homes have since been sold to Habitat and one (1) will be sold to the City for a street
connector. The Dwelling Place options on the 4 city owned lots have since been dropped
but Habitat has agreed to purchase one of the City lots located at 307 Robey to build a
new home as part of the HOME funded initiative.
3. Dwelling Place and the East Hills Neighborhood Association have secured an NEZ for all
40 parcels in this area.
4. Dwelling Place has secured $756,000 of City HOME funds for development of these
homes.
5. The City has committed to fund more than $3,000,000 of infrastructure improvements in
this 40 parcel area as part of this project, adding to the attractiveness of this neighborhood
area.
6. Habitat has qualified buyers and mortgage financing for prospective buyers to purchase
these homes. In addition, Habitat has a track record of providing extensive support for
these families over time ensuring their household stability and a much greater likelihood
of stability in the neighborhood.
7. Habitat has extensive experience with single family development including new
construction, rehabilitation and green building techniques for both.
8. Habitat has established a partnership for construction training with both the Grand Rapids
Community College’s Building Trades program and the National Youth Build program.
Both programs provide an added dimension to this initiative, offering construction
training opportunities for a large number of low income and underemployed persons. The
Grand Rapids Youth Build program is partnership between Habitat for Humanity,
Bethany Christian Services and the US Department of Labor. The program is a 40 week
construction training program in Grand Rapids for low income adults, 18-24 years of age
who are exiting foster care helping them to obtain their GED while learning construction
job skills.
9. For profit developers have made a commitment to development in adjacent commercial
area along Wealthy Street and have indicated a desire to increase their activity if this
project moves forward.
To date, 18 community partners have come together to support preservation of this neighborhood
through major infrastructure improvements, LEED certified historic rehabilitation of existing
homes, and LEED certified new home construction including 1 net zero home. The partners in
this effort include:
1. Habitat for Humanity
2. Dwelling Place
3. City of Grand Rapids
4. East Hills Council of Neighbors
5. Michigan State Housing Development Authority
6. Ferris State University Energy Center
7. Goodwill Industries of Greater Grand Rapids
8. Grand Rapids Area Coalition to End Homelessness
9. Grand Rapids Community College Tassell M-TEC
10. Grand Rapids Community Foundation
11. Grand Rapids Public School Academy of Design & Construction
12. Hispanic Center of West Michigan
13. Historic Preservation Commission of the City of Grand Rapids
14. Tassell-Wisner-Bottrall Foundation
15. Wealthy Theatre Business District
16. Wege Foundation
17. Wolverine World Wide
18. Youth Build Grand Rapids
Even existing owner-occupied homes are receiving attention in this area through Habitat’s
“Brush with Kindness” program which paints and repairs homes and offers weatherization
assistance to improve the safety and energy efficiency of an existing home.
Through the partnership with Grand Rapids Community College, students are learning green
construction techniques with work they will do on a number of these homes.
Habitat’s newest program, “Youth Build Grand Rapids”, helps “at-risk” 18-24 year olds obtain
GED, life skills training and Pre Apprenticeship Construction Training through the rehabilitation
of homes in Wealthy Heights as a learning laboratory.
When this initiative is complete more than a quarter of this 40 parcel, “Wealthy Heights” area,
will be Leadership in Energy and Environmental Design (LEED) Certified.
The level of commitment by Habitat, many donors and other community partners is already
evident in the work that has already been completed to date. These include:
HOMES FOR SALE COMPLETED TO DATE
1. 306 Donald Place SE – Total gut rehab of an existing home for a new home owner
family
2. 335 Freyling Place SE – New construction of an accessible, super energy efficient home
that produces its own energy for a home owner family of seven
3. 353 Visser Place SE – Total gut rehab of an existing two-family home into a single unit
4. 302 Donald Place SE – Community Garden created on the site of a deadly fire which
took the lives of an entire family
BRUSH WITH KINDNESS PROJECTS COMPLETED TO DATE
1. 309 Donald Place SE – Removed exterior lead paint, painted home, replaced porch post
2. 314 Donald Place SE – Removed back patio, replaced fence, installed new landscaping
3. 319 Donald Place SE – Removed exterior lead paint, painted home
4. 322 Donald Place SE – Replaced porch and post, installed new landscaping
5. 337 Donald Place SE – Repaired garage service door, basement access door, glass block
windows, fence, removed exterior lead pain and painted window trim, and installed
landscaping
BRUSH WITH KINDNESS PROJECTS PLANNED
Weatherization and “A Brush with Kindness” activities are planned for up to another 14 owner
occupied homes in the neighborhood as part of this initiative
PLANNED NEW CONSTRUCTION AND REHABILITATIONS
WITH PRIVATE, CITY AND MSHDA FUNDING
1. LEED Certified Rehab of 336 Robey SE (with private funds only)
2. LEED certified Rehab of 341 Visser SE (with private and HOME funds)
3. LEED certified Rehab of 349 Visser SE (with private and HOME funds)
4. LEED certified Demolition of 327 Freyling SE for new construction (with private
and HOME funds)
5. LEED certified Demolition of 319 Freyling SE for new construction (with private
and HOME funds)
6. LEED certified Rehab of 352 Visser SE (with private and HOME funds)
7. LEED certified New construction at 307 Robey SE (with private and HOME funds)
FINAL STEPS TOWARDS IMPLEMENTATION
The need for City Commission and MSHDA Approval to Change the Grantee
As a consequence of the shift in plans from Heartside Non-Profit Housing Corporation
(Dwelling Place) acting as developer to Habitat acting as developer it became increasingly clear
that the level of complexity would likely grow for compliance monitoring if Heartside NPHC
(Dwelling Place) remained as the grantee. HOME regulations would be imposed on Heartside
NPHC through a program agreement with years of compliance monitoring and Heartside NPHC
would then need to enter into a sub-program agreement with Habitat to monitor their
performance in the grant, creating a duplicate effort for the same result. In addition, both Habitat
and Heartside NPHC would be required to include the grants in their annual audit reviews under
the “Single Audit Act” requirements duplicating ongoing auditing costs for this project. The
added complexity led everyone involved in the project to question the need to maintain Heartside
NPHC as the grantee given Habitat’s evolving role as the primary developer.
MSHDA has already indicated a desire to move forward to change the grantee for their $450,000
in this project. While Habitat was included in the City’s Release of Funds Approval from HUD,
the original City Commission resolution was with Heartside NPHC only which is why action to
substitute Habitat for Heartside NPHC is needed.
This 40 parcel area is a “tipping point” project. With the time and investment made to date and
the plan for historic rehabilitation of existing homes, construction of new homes and city
infrastructure that are part of this plan, the area will be well on its way to stability and join the
rest of the East Hills area as one of the most resurgent neighborhoods in the City of Grand
Rapids.