At Ada and Simpson Streets, new and rehabbed homes are making a difference

There are five new houses on the blocks along Ada and Simpson Streets on the Northside. They’re part of a two-pronged development approach — building new houses that are meant to remain affordable for 99 years and rehabbing houses already there — undertaken by Kalamazoo Neighborhood Housing Services.

New homes for the future, plus KNHS work rehabbing four other homes, are intended to stabilize some of the struggling blocks of the Northside. The effort has “changed the personality of the neighborhood,” says Beth McCann, Executive Director of KNHS.

Before work got underway, McCann says the neighborhood’s reputation was “not great. It was one of the toughest neighborhoods, we were told. And had a lot of disinvestment. And so we put a lot of money into the rehabs, and we built the new builds.”

Residents have been inspired to improve their homes, to do “even just little things, like putting flowers out that weren’t there before.” And a man who lives across the street on Ada, “works for us now. And he’ll tell you that before we came, he didn’t let his kids play out on the street. He didn’t like walking down the street.” 

The newly built homes are making a difference in the neighborhood. McCann recently showed off a couple of them.

One, 617 Ada, was spacious, with a back door opening up on a large yard. The other was on a smaller plot, narrow but long to fit the property.

She points to the smaller house next door, 611 Ada. “How many bedrooms do you think are in there?”

From the street, that house looks like it has one floor, with two windows and a door on the front. It looks tiny. We look inside, find two bedrooms on the main floor, and two in a finished, carpeted basement. Both the basement and main floor have their own bathrooms.

The main floor bathroom has an accessible step-in shower. There could be a time, some day in the future, when a family in the larger house could have their senior parents living next door, or their offspring could begin a new family in the smaller house.

Many generations could be living in these homes. Thanks to a new program, the homes will be kept affordable for 99 years.

What is Shared Equity Homeownership?

“Shared equity is about permanent affordability,” McCann says.

The basic outline of the program: A one-time community investment — federal, state, local government grants, and/or philanthropic — goes into building a new home that’s affordable for families with modest incomes.

That first family, and following families, agree to “pay it forward.” A requirement to keep the property at a price for a specific area median income, for generations, is baked into the deed. For the program to work, they buy it and sell it at under market value. 

Saying this will run for “99 years” is a way of saying it’s “more or less permanent,” McCann says. “In theory, it should outlast KNHS. It should outlast everybody.”

The goal is to build houses that are affordable for people who earn between 60% and 75% of the area median income (typically, KNHS’ new builds are sold for 80% AMI). 

The price of the larger home at 617 Ada, adjusted for AMI, will be $179,900. The smaller at 611 Ada will be $169,000. Open market value would put them at $195,000 to $205,000, and $185,000 to $195,000. The three houses on Simpson will go for $174,900 (market value $190,000 to $205,00).

The savings of around $25,000 on each house were made possible by funding and other support from MSHDA’s MI Neighborhood, the City of Kalamazoo, KNHS, NeighborWorks America, and the Home Builders Association of Western Michigan.

NeighborWorks America, a Washington, D.C.-based, congressionally chartered national nonprofit, invited KNHS to participate in the program. They provided training plus funding. They’ve been working on expanding housing since 1978, and work with over 240 nonprofits, including KNHS. 

Their Shared Equity Housing Initiative provides “space and support for network members to explore innovative strategies to keep housing affordable,” NeighborWorks states on its website. They use “models that are tailored to their communities’ individual needs.” 

“NeighborWorks America was really the seed money to get these houses done,” McCann says. “Because their commitment was to help us buy down the price of the house. So that’s how we make affordability. We put extra funds into it, and we buy it down.”

Northside input

Lisa Hasegawa, NeighborWorks America Interim Regional Vice President, Midwest Region, spoke at the June 11 project ribbon cutting.

Hasegawa says they’ve been working with communities around the country, to “explore how shared-equity housing models could work…. We knew KNHS had the creativity, partnerships, and commitment needed to make this approach successful, and it’s exciting to see the results standing right behind us today.”

McCann tells the crowd at the ribbon-cutting, “We immediately recognized the potential of this model for Kalamazoo. Far too many hardworking individuals and families earn enough to sustain home ownership, but not enough to overcome today’s barriers to entry. Rising home prices, limited inventory, and the challenge of saving for a down payment on a new home.” 

McCann tells Second Wave after the event that there are other long-term models to create new housing and new homeowners, such as a community land trust. In that case, a nonprofit owns the land, while residents own the home, helping keep prices down.

But then, “You don’t own the land,” she says of the homebuyer. “It’s very important to the BIPOC community to own the land.” 

At various events, Northside residents told KNHS their concerns: Gentrification, a change in the neighborhood’s character, and community investments that won’t ultimately improve the neighborhood or the lives of the people currently there.

Building generational wealth is an important part of the shared equity model, McCann says.

Owners may have to sell at a lower market rate, but they’ll still build generational wealth. They will “build their equity each year,” McCann says.

If homeowners make any improvements or additions, “they get any equity that they put into it. So if they put a new roof on it, they get the equity of the roof.”

The houses are full of the most energy-efficient systems available, yet in the next quarter century or so, they may need updating. 

When it comes time to sell the house, the homeowners will need to keep the prices at 60% to 75% AMI. The price will rise and fall with the income levels of the area over the decades. That helps avoid gentrification and driving up property taxes in the neighborhood, she says.

Residents told KNHS they also would like the homes to fit the neighborhood. McCann says that she’s seen “beautiful homes” built in other communities, but they didn’t look like the rest of their neighborhoods. “It’s super important to KNHS to build something that fits the neighborhood. And I think that also builds trust with the neighbors.”

To further help build trust, Kalamazoo Neighborhood Housing Services held block parties where residents were able to provide input on the new houses, from outside colors to interior designs. 

For example, the draft plans for 611 Ada had no back door, and one door leading to the basement bedrooms. Residents said that didn’t seem safe, and they wouldn’t want their kids downstairs behind one lockable door. The house now has a back door and an open staircase.

A new, improved, and safer neighborhood.

McCann says KNHS realized, “By combining new construction with rehab efforts, we could strengthen the entire block and create lasting investment in this neighborhood.”

So, along with building new houses, KNHS has rehabbed four homes at Ada and Simpson. 

One had been in the owner’s family since her great-grandmother lived there. 

“She saw what we were doing on the street, and she didn’t want to sell it to just anybody,” McCann says. “And when she came back to see the house (after it was rehabbed), she cried, and she said, ‘This house now is exactly what my grandmother would have wanted. It’s going to go to a family…. I wanted it to go to a family.’ “

This story is part of Southwest Michigan Journalism Collaborative’s coverage of equitable community development. SWMJC is a group of 12 regional organizations dedicated to strengthening local journalism. Visit swmichjournalism.com to learn more.