Expectation of homeownership eludes Detroit’s Brightmoor renters
For more than a year, Tracie Curry paid nearly $690 in monthly rent for a home she should already own.
Curry has lived in the same three-bedroom house in Detroit’s Brightmoor neighborhood for 18 years, waiting for the day she could call it her own. Like many of her neighbors, Curry thought it already would have happened.
The house she moved into was part of a Northwest Detroit Neighborhood Development project that used tax credits to build single-family rental homes for low-income residents in Brightmoor, where the median household income is less than $33,000. As many of the residents understood it, after 15 years as rental properties, they’d have the option to buy. It’s why Curry, 56, moved out of her grandmother’s house and into Brightmoor.
She and her son have both taken the requisite homebuyer’s class. She’s passed an inspection. But since 2018, when the city determined she was eligible to buy the home NDND built, she’s continued to wait for the deed to her house.
“It’s depressing, very depressing, when you think you’re going to have something and you don’t get it,” Curry said. “It’s stressed me out. I want to be a homeowner.”
She’s not the only one who’s frustrated. At the city of Detroit, officials have been trying to work with NDND, a community organization, to sell the homes in the development’s first phase to renters who expressed interest in owning them. But some of the rental properties continue to fail inspections, repairs have taken more time than expected and the sales process continues to be slow.
“It’s certainly taken too long for homes to go from people saying that they want to purchase them to actually owning their homes,” said Julie Schneider, director of the city’s Housing and Revitalization Department. “Not every tenant wants to purchase their home. But when there is an opportunity to purchase, we want to see it move quickly so that people aren’t continuing to pay rent when they could be owning their home.”
Instead, residents like Curry continue to wait.
‘I was relentless’
Beginning in 1999, NDND built 231 homes in Brightmoor, a neighborhood on Detroit’s northwest side that still has abandoned lots, rundown houses and plenty of blight. The community organization received more than $2.1 million in low-income housing tax credits for its first three construction phases, according to the Michigan State Housing Development Authority, which allocated the tax credits and oversees the program. As part of the agreement for those credits, NDND opted into a program that allowed the sale of rental homes to tenants after 15 years, if they were interested in buying them. But if the homes couldn’t be sold, per the agreement, they would continue to be rentals. In Brightmoor, 55% of households were renters in 2021, according to statistics from Data Driven Detroit.
Tenants like Curry misunderstood the agreement and thought they were entering a rent-to-own arrangement that would automatically make them homeowners. They said the Brightmoor marketing materials led to the misconception, but copies of those marketing materials are no longer available.
“I have not seen any of those (marketing) documents yet,” said James Tate, the president pro tem of the Detroit City Council, who represents the area and has been trying to help renters there acquire their homes based on their understanding when they moved in. “It’s frustrating for me. I hear it, but I have to go back to what I can prove.”
Still, city officials confirmed the existence of a pilot program in Brightmoor that was intended to make some of the low-income residents homeowners. In the first phase, 16 residents expressed interest in ownership, including Curry. Of those 16, only 10 have succeeded in getting their deeds.
One of them, Dawn Clark, said she stopped paying rent in spring 2018 to protest the long delays. She finally closed that December. Clark has been a resource for other neighbors, like Shelia Carter, who didn’t close until September 2021.
Shelia Carter moved into her home in Brightmoor in 2007. Becoming a homeowner, she said, “meant everything to me.” (Photo by Quinn Banks)
“I just wouldn’t stop, I was relentless,” said Carter, who paid her monthly rent of $604 for two years after turning in her paperwork to acquire her home. “Everybody’s just been waiting.”
Since becoming a homeowner, Carter bought new blinds and doors, painted walls and installed new carpet, added lighting in the kitchen and dining room and upgraded the electricity in the house. She’s happy to pay property taxes – “You don’t mind paying for what’s yours,” she said – and intends to continue investing in her house and in Brightmoor.
“I feel great just putting money into the house,” she said.
But others continue to wait, and many don’t know that they’ll ever have a path to ownership. Curry said she stopped paying rent in February after being told she would soon close on her house; she also received six months of rental assistance during the coronavirus pandemic after her son’s unemployment led the household to fall behind on rent and NDND filed to evict her. The issue has since been resolved, she and NDND confirmed, and she’s waiting for the house to be hers. She said she has plans to redo her porch, replace the doors, paint the walls and install new floors, but she can’t do anything without the deed.
“I’ll be so happy when they call me,” Curry said. “I’m ready for it.”
“It’s depressing, very depressing, when you think you’re going to have something and you don’t get it,” Curry said. “It’s stressed me out. I want to be a homeowner.”
Tracie Curry has lived in the same three-bedroom house in Detroit’s Brightmoor neighborhood for 18 years, waiting for the day she could call it her own. Like many of her neighbors, Curry thought it already would have happened. (Photo by Quinn Banks)
Karla Davis and Frederika Tolliver would also like to own their Brightmoor homes. But when Davis expressed interest in being an owner, the pilot program wasn’t accepting any more participants. And the city doesn’t have any record of Tolliver’s interest, meaning she’s also not in any queue.
Still, Davis said she’s taken the required homebuyer’s class two times and she continues to agitate for ownership.
“It never happened for us,” she said. “We’ve just been fighting and fighting for these homes ever since.”
A bad name in the community
John O’Brien, the president of NDND’s board of directors, said people “got a lot of mixed messages,” primarily from the management company NDND first worked with, when they moved into the organization’s houses. They thought their rental payments would lead to automatic ownership. It wasn’t true.
“It has gotten us an awfully bad name in the community,” O’Brien said. Later, he added, “I wouldn’t say it was conspiracies, but it was misinformation passed back and forth.”
NDND went through several management companies at the start, he said, beginning with Management Systems.
Also leading to the bad name: Another management company, KMG Prestige, that visibly targeted tenants who were behind on rent by tying red balloons to their porches. O’Brien also blamed the management company, which NDND no longer works with, for a backlog of repairs on the homes. The organization has now brought repairs in-house, and O’Brien said he’s making progress on a long list of necessary fixes.
Paul Spencer, CEO of KMG Prestige, acknowledged that the company “didn’t put our best foot forward” with the balloons, calling it a bad decision from a manager who was later moved elsewhere in the company. He said repairs were delayed because money was tight and NDND had trouble raising the funds to pay for the fixes.
“For me, it’s a shame that the finger pointing starts,” Spencer said. “I look back at what they were trying to do and they were trying to do good in the area. We just didn’t have the resources.”
Even with NDND doing maintenance themselves, Curry, Davis and Tolliver all said they continued to have repairs that took months or were still not finished. Carter, the homeowner, closed on her house with some incomplete work because she was wary of waiting longer for fixes to be done.
Some closings have been delayed because of incomplete repairs, city officials said, though O’Brien blamed city officials “for dragging their feet” on closings. Schneider said HRD has been in communication with NDND “urging the developer to get the properties in appropriate condition” since last year, after inspections showed repairs were moving slowly.
The head of Detroit’s building and safety department, David Bell, said in a statement that some tickets have been issued, and paid, as properties are inspected and NDND works to get certificates of compliance for its rental units. City information from June shows more than four dozen violations that hadn’t been paid, many of them in collections; more recent information from the city wasn’t available. O’Brien said he was negotiating some of the tickets, particularly those that had to do with illegal dumping – though many related to NDND not having certificates of compliance for the rental units. He said he wasn’t sure how many were still outstanding in October.
In addition to inspecting homes before they’re sold to make sure they’re in livable condition, the administration is involved because of its financial commitment to the project. The city committed $6.4 million in HOME loans to early construction phases. And later, to help enable sales among the 16 tenants who expressed interest in owning but thought they wouldn’t need to pay any more than they had, the city put $450,000 in community development block grant money toward debt held by another lender.
While MSHDA said purchase agreements for 2023 have a listed sales price of $46,875 for the homes, residents like Carter didn’t pay anything upon closing because of the city’s role. A spokesperson for Detroit’s Housing and Revitalization Department said the city doesn’t have the money to replicate that effort for other Brightmoor homes or those elsewhere in the city.
But even if the homes are low-cost or free, as they would be for the first group of tenants that expressed interest in ownership, O’Brien questioned whether the low-income tenants would be able to handle the costs of home ownership, including needed repairs. He said keeping the homes as rental properties ensured tenants wouldn’t be subject to reverse mortgages or lose their homes to foreclosure because they’re unable to pay property taxes.
“They think home ownership is a panacea when it’s a rock around their necks,” O’Brien said.
O’Brien said he was concerned that new homeowners in Brightmoor would want to sell their properties, pocket any money they would get and lead the area to become unaffordable for their low-income neighbors. Once they’re sold, he said, there are no affordability controls. As rental homes, he still has sway over the incomes of the residents. The sales agreements require tenants to own their homes for five years before they can sell them, or pay a penalty.
“It’s a little bit patronizing, I’m realizing, but there’s also an element of truth,” O’Brien said of his concerns. “For the very poor, it’s not realistic to expect that there’s going to be disposable income that’s going to allow them to keep these homes insured, to keep a roof over their head.”
While O’Brien said he intends to offer more homes for sale to those tenants who can qualify for a mortgage, he has his own financial concerns. Selling homes dilutes the amount of rent money coming in to cover taxes and other costs.
“Affordable units do actually depend on there being enough units involved so that we can actually maintain them all and keep them managed effectively,” he said. “It’s really a complicated balancing issue.”
A path to sales
While NDND’s sales continue to stagnate, there’s one low-income sales framework that Detroit officials see as a model for the region – and O’Brien has no interest in participating in.
Ohio-based CHN Housing Partners has helped about 1,700 renters become homeowners, including about 70 in Detroit, said Kevin Nowak, CHN’s president and CEO. The organization built its own single-family rental homes in Ohio, similar to NDND, but has also stepped in to help organizations sell their own low-income rental homes, as it’s done with those locally managed by Cinnaire. Detroit is using $4.9 million in American Rescue Plan Act funds to partner with CHN in the hopes of getting more rental homes into the hands of low-income buyers across other scattered-site projects.
Statewide, there are 37 lease-purchase projects, according to MSHDA, with 10 projects currently selling to residents. In Detroit, 120 homes have been sold to tenants across other projects, in addition to the 10 Brightmoor homes that have closed. Since CHN got involved in Detroit, more than 100 additional residents have been contacted about the possibility of buying their rented homes.
There are challenges to making Brightmoor residents homeowners that CHN doesn’t face in its own properties, Nowak said. He said in the homes CHN builds for low-income tenants who could eventually be buyers, it focuses on ensuring the construction doesn’t include a lot of debt that buyers will have to pay back. Buyers come with an average down payment of about $1,200, he said. And they have access to a community development financial institution associated with CHN where they can get loans for their home purchases that usually range from $10,000 to $15,000. As renters, residents are used to paying between $463 and $790 a month.
“At the end, it’s not a huge capital need,” Nowak said.
CHN also focuses on maintaining the homes, including by teaching residents how to do maintenance when workers come to make repairs. And at least twice a year for the five years before home ownership, Nowak said, employees meet with residents to talk about budgeting and what they need to do to become a homeowner. CHN wants to ensure that residents’ principal, interest, taxes and insurance don’t cost more than their monthly rent.
In Detroit, Nowak said, CHN expects to spend about $10,000 per house on needed repairs and the city has agreed to put an additional $10,000 per home toward down payment assistance. He said he’s engaged with NDND “multiple times,” including several meetings, but the organization hasn’t opted in to its program.
“Any time they would be interested in reengaging, we would be interested in reengaging right away,” Nowak said.
But O’Brien said he has no plans to.
“They’re wanting to take over the whole project,” he said, including the portions that remain rentals. O’Brien said CHN wants its tenants to be at 60% of the area median income, or $56,820 for a family of four, while NDND’s renters make less. “Effectively, they want to move all these houses out of affordability.”
CHN disputed the claim. Laura Boustani, the vice president of external affairs, said CHN’s role “is to help the owners deliver on the lease-purchase promise” to convert renters to owners. She said CHN would not take over any homes that people want to continue renting and CHN would “have no ownership, whatsoever.”
Tate, the city council president pro tem, said O’Brien was “not necessarily looking to relieve himself of those properties,” one of the main causes of delays.
Brightmoor is “still a very challenged neighborhood,” Tate said. A failure to make needed repairs and the “callous” treatment of residents makes things worse for the community.
“I’d like for the process to move a lot quicker,” he said. “Don’t give up hope. We’re still working on it. … We’re not going to let go until we get as far as we can. We’re not done yet.”
‘I take pride in my home’
Carter, who did close on her three-bedroom home, said she had to buy a new refrigerator because NDND provided used appliances that soon died. Only two eyes work on her stove, so she’ll need to replace that, too.
No one at NDND prepared her for these additional costs she’d have to shoulder, she said. Carter, 67, is on full retirement after working in maintenance at a charter school in the city and delivering the Detroit Free Press for 20 years. The frustration over the drawn-out process to get her deed led to headaches and high blood pressure; an experience that “was supposed to be smooth sailing” was anything but.
“That I know of, five or six people are still waiting,” she said. “They’re not even trying to help them get the houses.”
Still, Carter didn’t entertain thoughts of leaving Brightmoor or the home she moved into in 2007. Becoming a homeowner, she said, “meant everything to me.”
“I’m at peace knowing that I own this house,” she said. “I take pride in my home.”
Curry, who’s still waiting to close, said the stress has caused arthritis and lupus flare-ups. But she doesn’t plan to give up. She’s found a church community in Brightmoor and wants to stay in the home she’s come to love, in spite of water leaks and other maintenance issues she would have to contend with on her own.
“It would get better; I would make it better,” she said. “It’s an awesome feeling, even thinking about it.”
Schneider said she hopes the remaining six homes close this year. The city is trying to learn from the issues tenants in Brightmoor have faced, she said, including better designing programs so they work for residents.
Davis, the renter who expressed interest in buying too late to officially be on the list, said she came to the house specifically for the chance to be an owner. She’s on disability now, but worked in construction and with heating, cooling and plumbing, so she’s not scared of the leaks and shoddy craftsmanship she’s seen in her time there. She’s just mad she was misled.
“I want the house because it was offered to me for $1,000 and if that’s all I’ve got to pay, I can take this house and fix this house up,” she said. “I’m living with it. Why wouldn’t I want it? Your own God-given home on this land is a beautiful thing.”
Davis, 58, is her block club president and on the board of Neighbors Building Brightmoor, a volunteer group working toward making Brightmoor a healthy and sustainable community. She said she knows plenty of area renters who would prefer to own, and she thinks letting them do so would add value to the community.
“It’s just sad we have to go through this,” she said. “It shouldn’t have to be this way.”
Tolliver, who the city doesn’t have a record of, said no one contacted her back when she tried to reach out about her interest in owning. She said she doesn’t know how to move forward.
“I think we’re at a standstill. We’re at a brick wall,” the 44-year-old said. “I don’t know what to do and I don’t know how to feel.”
She said she’s worried rising rents will push her to move, something that’s particularly frustrating because she doesn’t think she should be renting any longer.
“I don’t understand why they won’t just give us our houses,” she said. “If someone falls behind, at least they tried.”
O’Brien, with NDND, said he felt like the organization’s efforts to provide housing for low-income residents had become a no-good-deed-goes-unpunished situation. There’s been a lot of disappointment from residents, he said, and a lot of frustration in administering and managing the houses, the newest of which are nearly 20 years old.
“The actual implementation of this has been quite a nightmare,” he said. “On so many different levels, we didn’t adequately think it through.”
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