Upper floor housing rehabs spur neighborhood growth

By now, most of us are familiar with the plight of downtowns that began when businesses fled historic city centers for malls in the 1950s and 60s, and urban sprawl took hold. While downtown storefronts have been making a fierce comeback for decades, one piece of the redevelopment puzzle has remained an obstacle: underutilized upper floors.

 

The upper floors of historic downtown buildings throughout Michigan hold literally hundreds of thousands of square feet of economic potential. When renovated as living spaces, these spaces can increase the value of the buildings, generate new revenue for downstairs businesses, build a cluster of daily customers for local businesses, and create a day-and-night vibrancy to downtown neighborhoods. 

 

But there’s a hitch, and it’s a big one. Because many of these spaces have remained vacant and deteriorating for so long, renovation is often cost prohibitive for the property owner, regardless of the huge potential for economic growth throughout the downtown. Finding a solution would require a tool that could break through that economic barrier and allow these historic, urban neighborhoods to flourish.

 

Several years ago, our partner on this special report, the Michigan State Housing Development Authority, became committed to helping cities break through that barrier. By offering financial incentives to property owners, MSHDA has helped bring affordable rental housing to downtowns, benefitting small businesses, property owners, and the new residents themselves. 

 

Here, we look at three examples of neighborhoods that have been changed by the development of upper floor housing. In Manistee, the young owners of a new art gallery and studio are able to live where they work after a rush of upper floor rehabs sets the stage for downtown growth. In Detroit, a forgotten architectural jewel reemerges in a neighborhood leading the city in second- and third-floor loft redevelopment. And in Portland, local government partners with property owners to overcome a geographic obstacle to downtown housing, and totally transform their community along the way.