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To Fight Steep Housing Prices in Downtown Kalamazoo, One Developer Goes Micro

Robbie Feinberg

While apartment prices in the Kalamazoo area are low compared to bigger cities like Grand Rapids, most buildings are outside the city’s core. Downtown is a different story. Apartments are in short supply, and rents can be two or three times more expensive. But one developer is trying to make things affordable by going small.

After Kristi Montgomery got divorced about five years ago, she needed a new apartment for her and her two kids, with a few requirements. She works at Kalamazoo's People’s Food Co-op, so she wanted to be close by. That meant looking close to downtown. But finding any unit for under a thousand dollars a month was nearly impossible.

"But I did end up finding a really small apartment in a house, that I could afford," Montgomery says. "That was down off of Howard and Oakland, which was probably around $525 a month, which was really good. But it was a one-bedroom for me and two kids! They were small at the time, so it worked! But it was tight. It was tight."

Montgomery’s story isn’t unique. Unless you want to live with a few roommates, living downtown likely means paying two or three times more than a similar apartment only a few miles away.

"Well, I would say about twenty years ago we were struggling to get people downtown," says Steve Deisler, president of Downtown Kalamazoo Incorporated. "Now, we have a shortage of housing."

Deisler says that as downtown has expanded rapidly over the past decade with new businesses and entertainment, housing’s been slow to catch up.

"I think the demand is really showing a need for affordable housing," he says. "When we say affordable, we’re not talking about subsidized, very low income. But we’re looking at a mix of moderate rate housing that you and I could afford."

A study commissioned by the city in late 2014 showed that over the next five years, Kalamazoo has the potential to build a thousand new rentals every year, plus almost 500 more affordable housing units. 

Deisler says filling that hole is important -- you need diversity in a neighborhood: singles, families, retirees. And one of the best ways to get that is with cheaper housing. But just because there’s demand doesn’t mean developers are building. There isn’t much available land downtown, so building there costs a lot of money upfront. 

So, how do you make affordable housing work? For one development company, the answer is to go micro-sized.

Developer Herb Ayres, of NoMi Development in Kalamazoo, walks through the basement of an old paper warehouse on East Frank Street in the River's Edge neighborhood, a few blocks from Kalamazoo's downtown core. 

"Well, I would say about twenty years ago we were struggling to get people downtown. Now, we have a shortage of housing." -- DKI President Steve Deisler

"And visually, as you can see, it’s awesome," Ayres says. "It’s all stick formed, cement poured building. They just don’t build buildings like this anymore."

The place still looks old. Graffiti lines the walls. Cob webs still coat the ceiling. But Ayres says that by the beginning of 2016, he and his development partner, Jon Durham, will have renovated it into a roughly 45-unit apartment complex, called Walbridge Commons.

The fifteen basement apartments here will be tiny -- 300 square feet. Think of something a little bigger than a one-car garage.

"So our goal with the micros is to provide a place somewhere around the $500 price point where someone can have an apartment, a service industry job, it’s affordable housing," Ayres says. "Yet they’re downtown and in a walkable community."

Ayres says even getting it down to that price took a lot of work. By working with Kalamazoo’s Brownfield Redevelopment Authority, they’re getting a tax discount. Plus, these apartments won’t have individual kitchens – instead, just a large, common kitchen for the whole floor.

But that $500 figure was important. Ayres and Durham talked with the People’s Food Co-op nearby to figure out the price its workers could afford. Their plan is that as those in the micros start to earn more, they’ll move up to the larger, more expensive apartments in the upper levels.

So far, Ayres says, he’s already hearing from recent grads, service workers, even retirees.

"But we are getting interest from people wanting to live downtown from the baby boomer generation, selling their house and living downtown," Ayres says. "So I think we’ll attract a wide variety of people! It’ll be interesting how this turns out."

Micro-apartments have already caught on in bigger cities like New York and San Francisco, but it’s yet to be seen if they can make an impact in Kalamazoo. Ayres and Durham are ambitious, though. They’ve built two smaller complexes nearby already. Three more are scheduled to be built a few blocks away on Burdick Street. And they come with lots of plans – a distillery, a mentorship program with Western Michigan University, and a “food vertical" -- a food business incubator.

Durham says it’s all part of the idea of giving Kalamazoo a “stay factor.”

"You graduate from Western, do you want to stay in Kalamazoo with your skillset?" Durham says. "With the addition of the micro-apartments, part of our master plan is for those to be attractive."

A lot more housing is needed, but at the very least, the new building will make it a little easier for some workers to live, work, and stay downtown.

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