Historic Lafayette Park’s First Luxury Community in 40 Years
- Oct 04, 2017
Building a multifamily project from scratch in Detroit just a couple of years after the recession could seem risky, but some developers saw the first signs of a growing demand for new market rate and high-end units and went for it. The traditional lending environment was still restricted, so they used the U.S. Department of Housing and Urban Development’s (HUD) financing program. Michael Poris, principal of McIntosh Poris Associates, was involved in several such developments. The most recent one is DuCharme Place, a $45 million project. The four mid-rise buildings include 185 units and were designed in accordance with Ludwig Mies van der Rohe’s (Mies) vision for Lafayette Park, one of the city’s first urban renewal projects. “It was the city’s way of competing with the suburbs as the people started moving out. It was meant as a sort of living in a park in the city (or) suburban living in the city,” Poris told Multi-Housing News. Poris, a Detroit resident for more than two decades, discussed what makes DuCharme Place a success story and what it tells us about the city’s housing market.
DuCharme Place is being marketed as Lafayette Park’s first lifestyle community in 40 years. What makes this project stand out?
Michael Poris: The site is across the street from that district (Lafayette Park). The planning and the zoning was still under the initial urban renewal plan. We were limited to two-and-a-half floors and there were setbacks. It’s the first project that’s been built in this urban renewal area probably since the ‘70s, which I think is significant. We actually did plans based on renditions of Lafayette Park in the early 2000s and worked with the original developer. They didn’t make money out of Lafayette Park. The first thing they told us was that you don’t want to build in steel. Nobody builds in steel now. It’s too expensive. It’s interesting because it made us realize that it was very market-driven.
How does this community fit into an area defined by Mies’ so-called “skin and bones” style?
Poris: Lafayette Park is very much about townhouses and courtyard housing in a sort of beautiful landscape and the towers were meant to be seen as background. We did DuCharme in a similar way. We went for four stories instead of 2.5 and created these courtyards, since all of Lafayette Park is centered around courtyards. The townhouses and the low houses are centered around parking and the gardens, the landscape, so that’s why we organized it into three different groupings. Four buildings around three courtyards that are all connected.
The other thing that they’ve done in Lafayette Park was lower the parking four feet. So, when you look out from your units, you’re sort of looking above the cars. The cars are down four feet and the landscape is coming up a few feet to hide the cars. That was Mies’ intent. We have 265 car spaces for 185 units, so we basically lifted the buildings on three platforms. Almost the entire site is covered with parking, but it’s hidden. We created the largest live roof for a residential project. The units are centered around landscape, whether it’s looking out on Lafayette Park or the project, on the west or the east or on to the courtyards. They’re very much focused on nature. You’re not looking at any cars. All the units have access to this green, planted terrace. Even though it’s in the city, one thing that sets it apart is that there’s a lot of space around it. It’s a little quieter than being downtown.
Who was this property designed for? Downtown areas are now typically preferred by Millennials and downsizing Baby Boomers.
Poris: That’s the market. Downtown Detroit and Midtown have been the most active areas for new development. And this market has been mostly Millennials, mostly one-bedroom apartments. We actually did a much larger mix of two-bedroom apartments here, partly thinking that this might attract more Empty Nesters and they would want a larger apartment than a one-bedroom or young couples or possibly roommates. I don’t think roommates happened so much. There’s definitely been some Empty Nesters that have gone in and definitely a number of Millennials and couples. It’s attractive to them because: for one, it offers secure parking, so it’s convenient. It is just outside of downtown, so it’s actually quieter. It’s easy access, it’s a beautiful setting. I think the units are good units, with the amenities, with the outdoor terrace and the pool and the workout facility. They’re all very attractive to people.
How have the needs of developers and residents changed when it comes to the design of multifamily communities?
Poris: When I moved here 22 years ago, there were 90 vacant buildings downtown, in the CBD. Basically, the city wanted to tear them down and we were fighting that and pushing for adaptive reuse and in 1999, tax credits were put into place. We started doing some early tax credit projects on existing buildings back in the late 90s and early 2000s up until the recession. There was maybe one new ground-up project built back before the recession in Midtown. Everything else was adaptive reuse. And then, since the recession, since Bedrock moved downtown, with Dan Gilbert and his 17,000 employees, there’s been a lot of momentum. This has been happening since 2011, in the last five years. Almost all of the existing buildings downtown and in Midtown have been or are being developed, so there’s actually now finally a market that supports new ground-up multifamily housing.
We did one. We started in 2009 during the recession. This was another property, Woodward Garden Apartments on 3909 Woodward Ave., and that was finished around 2014. That was a HUD project funded through 221(d). DuCharme is similar. We restarted this housing project in 2012. There was an earlier version back in 2005, but that stopped because of the recession. There just wasn’t funding in Detroit, traditional funding. The HUD 221(d)(4) program was available and attractive to developers. There were at least three of those. The one we did prior, this one and Orleans Landing down on the river were all financed through HUD 221(d)(4). Those are market rate. It’s HUD, but it’s market rate housing. It’s almost the same program that Lafayette Park was built under 60 years prior.
It’s evident that demand for affordable units is still high, but demand for lifestyle communities vary by market.Is there demand for luxury communities in Detroit?
Poris: Yes. There’s a huge demand and every market study has shown that for a number of years. The issue was that rents just weren’t high enough. Just in the past couple of years rents have gotten up near $2/square foot or even higher in a few places. That seems to have been a magic number for developers and funding.
But there’s definitely been a need, because there’s been so much growth and momentum downtown and in Midtown and so many people moving down that there’s been a lack of newer housing. All the housing stock is from the 80s or earlier. There were a few things built in the 80s, some in the 70s, 60s, the houses in the 20s, 30s, maybe the 50s. There’s a huge market for new development. Of the 185 units, in a month or so, there were five or six left. DuCharme, because it’s not in downtown or Midtown, it’s in Lafayette Park and because it was HUD, rents are actually lower than downtown or Midtown. They’re about $1.8/square foot versus $2-2.5/square foot. We had to make that work and we did.
Is the fact that we are seeing such projects are starting to come to life a sign that the city is on the right track for a full recovery?
Poris: Yes, absolutely. I think that the fact that there is new development and funding available is huge. You know, I’ve been here 22 years and we’ve been working towards this the whole time. It’s something that other cities in other markets have taken for granted. Just getting funding here, having a market and having banks feel comfortable funding projects in the market has been a big thing. It’s bringing the quality up of what’s getting built. It’s making it more competitive, design-wise and amenity-wise, so I think it’s bringing the market up as well. There were periods when you could put anything new up and people went for it because it was new, but now they’re starting to have choices though it’s still a very tight market. We need a lot more of it. There is still demand for thousands of more units.
Images courtesy of Jason Keen and McIntosh Poris Associates