A Way Home — Housing Solutions: This story is part of Southwest Michigan Second Wave's series on solutions to homelessness and ways to increase affordable housing. It is made possible by a coalition of funders including the City of Kalamazoo, Kalamazoo County, the ENNA Foundation, Kalamazoo County Land Bank, and LISC.
"This is crazy," this journalist says out loud. "Almost said you're crazy, for trying this."
"Thank you," Jake Tardani responds. "I'll take that. It takes a little bit of risk."
Our feet were crunching on broken glass, entering the murky, dank interior of what Tardani says was a late-1800s cement factory, one of the first in the City of Kalamazoo. It's small for a factory, with heavy cement block walls, and a rotting wood roof.
This "charming and quaint property" is located behind a former drug house on Denner Street. Tardani has purchased them both, and promises to turn them into habitable, rentable dwellings. He currently owns eight properties on Denner.
Tardani points to what he sees in a future version of the old structure. Over there, a kitchen; here, a living room; there, a dinette; and upstairs "are these great barn doors, that will be perfect for a bedroom."
All that's visible now is junk and rot, dim under the light coming through holes in a roof that's covered with vegetation.
"The neat thing is, with our second City of Kalamazoo grant round, we're going to transform it into a single-family dwelling," he says. Just run electrical, sewer, and water lines to it. "Will be a one large bedroom, large living room, kitchen, bathroom, with a garage -- a house."
Landlord with a mission
Landlords get painted with a broad brush. Usually as the bad guys, because their business is in providing a significant life necessity. When that necessity is priced out of reach, their customers' lives are upended. People need more than shelter, they need a stable home, and that's difficult when there's a housing shortage.
We talked to some local landlords -- ones who live in Kalamazoo -- about how they could play a role in keeping housing affordable. That story will come later.
One thing they said was, "You should talk to Jake." The implication was that Tardani was driven, on a mission, he wasn't the usual landlord.
Tardani is head of Odyssey Properties
, with the motto, "a new way to live."
A look at 1028 Denner before Jake Tardani gets to work on it.
His business is buying-up houses and buildings, most of them cheap and in near-ruin. He rehabs them and rents them at rates kept as low as possible.
His goal is to "keep it as sustainable as possible, keep the costs low so that rents can be low based on the costs of acquisitions and renovations," he says. "It's a pretty simple model, but it's a lot of hard work."
Helping are grants from the City of Kalamazoo and HUD funding from the Home Investment Partnership Program
. Using HUD money means "you have to meet an income threshold for tenants and residents that live here, and you have a minimum amount that you can charge per unit, or per house," he says.
Julie Johnston, community development compliance specialist speaking on behalf of the city's planning department, says, "Essentially, Jake was provided some funding to rehabilitate housing that will stay affordable to low-and-moderate-income households for 5 to 15 years depending on the amount of money invested in each unit."
Tardani and his small crew do most of the rehab work themselves, which also helps to keep his costs low.
There's a lot of work to be done at 1028 Denner.
"When a house is all done, we might be into it for $50,000 to $60,000, and then you get a mortgage on it for $75,000 that has a payment of $500 a month. Rates are changing a little bit now, but that doesn't impact it too significantly."
The math: he pays $500 a month, charges $800 in rent, and makes a profit. "You make that modest profit on one unit, but if you do that times 10 units, times 100 units -- I'm not quite at 100, but in 10 years we've built a modest portfolio based on small margins but high number."
His model has been working, he says. The company continues to grow. In the last 10 years he's acquired 37 rental properties, sold eight, and now owns 29, a majority of them in the West Douglas neighborhood.
Across Denner from the former drug house "is one of my favorites," 1028 Denner. New siding, windows, and a door have made it look like a new version of its late-1800s self.
Inside, it needs further work. Tardani and his team have installed new electrical, a modern furnace, PVC pipes, and more. But paint and old wallpaper are peeling from the old lath and plaster. Walls have been torn out. As it stands, the house is its own before (inside) and after (outside) photo.
Stacks of newspapers have been removed. He pulls out a 1948 Kalamazoo Gazette, with stories showing how the city commission once regulated taxicab fares and a profile on the "gals" in the ladies bowling league.
The house will all be new, up-to-code, and affordable to rent, he says. Thanks to HUD funding, a zero percent interest loan, he'll be able to charge $1,100 a month for the full house. A house of its size in a similar neighborhood, "fully-finished, turn-key," would likely rent at $2,250 a month, he says.
Jake Tardani says, thanks to changes in the city's ordinance on additional dwelling units, this garage at 1028 Denner St. can be made into a small house with one bedroom, living room, kitchen and bathroom.
The house has a separate garage that he's planning on turning into another dwelling, like the little old factory across the street.
The city's zoning code didn't permit what are known as "Accessory Dwelling Units" up until a couple years ago, City Planner Christina Anderson says. "ADUs can be... a separate building from the main building on the property.... They can also be internal to the main building on the property," Anderson says.
His plan is to turn the garage into a small one-bedroom home, with kitchen, bathroom, and loft space, comparable to the tiny homes built elsewhere in the city.
Wouldn't it be cheaper to tear the mess down and build new?
"The cost of building, though, is getting so extreme," that building new is not the best option.
The cost of renovating the garage will be lower than building a tiny house, he says, "especially when doing in-house, instead of retail,” – in other words, doing the work himself with his hired crew – “I've got to stress that."
A few houses down from his rehab project at 1028 Denner is one of Tardani's finished homes. "There's a beautiful family living there now, of five."
These will be homes with a spacious yard where he pictures future kids playing. "Housing should come with more than the bare minimum," he says. "I want to demonstrate it to the city that that is part of the model. It's not always what's the cheapest, what's the least expensive way to get housing. It's what's going to make this last for the next 20 to 30 years, while keeping it affordable, too."
Stability for renters and neighbors
"There's a lot of private investors that are trying to buy up all the available housing that comes up in Kalamazoo," Tardani says.
Tardani doesn't advertise, doesn't place "We Buy Houses" signs around town. He simply knocks on doors.
At 1028 Denner, he found a house that had been in a family since it was built in 1895. A woman in her 70s owned it, who had childhood memories of hauling dirt out to expand the basement for the original owner, her grandfather.
The woman's niece was living in the house. "It was in such bad condition that neither of them could afford to restore it." They were eager to sell.
He made sure the niece had a "smooth transition" so she could move on her own time, "without any pressure." The niece moved after eight months.
Tardani found that the family also owned the house across the street, built in 1925, now a duplex. The owner was also eager to sell that. "It was a well-known distribution house" for meth and heroin, he says.
SWAT took the resident away to jail, but since the arrest was at the height of the pandemic, he was released -- after Tardani had bought the house.
Another house on Denner is Jake Tardani's next project. It had been used as a drug-selling operation. West Douglas has had a bad reputation, but now "it's a good neighborhood. It's safe, it's secure," he says.
He didn't go into details, but Tardani found himself having to evict all those in the house. "It was still being occupied, and drugs being distributed.... It was pretty intense to experience."
Afterward, neighbors came to thank him, he says.
Denner and West Douglas have had a bad reputation. Tardani knows -- he lived on the street in 2007 as a student. Lately, "I've been so impressed with the neighborhood and the stability of it.... It's a good neighborhood. It's safe, it's secure."
His past in a housing-unstable family
With the exception of drug houses, Tardani makes sure the residents of the houses he buys have time to move, with no pressure, he says. And he wants his tenants who move in to have steady, affordable rents in homes that shouldn't need any major maintenance for the next few decades.
He hopes to see people live in his properties long enough that they develop a real connection to the neighborhood, and his ultimate dream is that after a couple of decades the tenants could buy the houses from him, and become permanent residents.
There's a reason behind his dream. "I was housing-unstable when growing up in the Muskegon area before I came to Kalamazoo for college."
Tardani's family had to move eight times before he reached the 8th grade. He knows what it's like to hop from school to school, try to fit into different neighborhoods, then pack up once again, not really feeling that a place is a home.
"It's not a very fun experience," he says. He hopes to "make an impact (on housing insecurity in Kalamazoo) -- it doesn't have to be hundreds, it's just one-by-one."
Tardani graduated from Western Michigan University in 2008 with a degree in Arabic language and Middle Eastern culture, and with a minor in business. He sold cellphones in a mall kiosk, then got a job as an insurance salesman.
In the recession, he kept hearing of people buying up houses. "Why am I not doing this?" he asked himself. He bought his first house, on Jefferson and Denner, "for a hobby." Three years ago he quit the insurance job and doubled his properties portfolio.
"It's a feast-or-famine thing," he says. He has three daughters, the oldest 15. "It doesn't matter how much money you make and earn" -- Tardani laughs -- "you're going to end up finding you just have to continue working and loving what you do, and at the same time."
"We talk a lot, my daughters and I, about giving back to the community in ways that are different from what I grew up in," he says. They talk about what they can do in their lives, to follow their passions -- "It's a weird dynamic. We never had that conversation growing up."
Tardani says he's found that "you can disassociate the profits of life with the productivity of life, and live reasonably within your means."
Housing insecurity in Kalamazoo
For people on the borderline of housed and homeless, "I hope and believe that there's going to be additional government assistance to help with some of these issues. Because right now it's becoming endemic," Tardani says.
During the pandemic, he "saw the government locally and federally dedicating a lot of resources to keep people from being homeless, because the cost of paying for their housing and utilities was a lot less than if they had to be homeless."
The city has initiatives that help him in his mission, but there's also red tape, he says. "Even with all the red tape there is, we can still continue to do good."
He outlines his model once more: "Buying houses for $20,000 and $30,000, renovating them for $30,000 and $40,000 more on federal grant money, and renting them out at a modest rent that covers all expenses.... My goal is to demonstrate with the city how we can do this, and how it can be profitable on a private business level, but at the same time keeping rents modest and low, while delivering a high quality product."
He does what he can, but sometimes he has to raise rents. "I have very modest increases. I get criticism because I don't increase them enough. I increase rents when need be."
Tardani continues, "But at the same time my justification is if we add more units to the portfolio, we won't need to increase rents. I look forward to the days when we can decrease rents because we have an abundance of units."
He wants to be in the business of creating long-term housing, but that goes against the grain of what other developers are doing. "People criticize me because it's more profitable to flip houses -- and it absolutely is in this market. It's more difficult to hold a long-term rental property than to flip a house."
For his model, "The profit is in long-term passive income, but it requires a lot of upfront work to make that happen."
He points down Denner and says, "There's a beautiful family living there now, of five." He points in the opposite direction. "Just last February there was a home-birth in that house by one of my residents, so it's really cool to provide housing that's welcoming more life into the world."
From the sound of his voice, one can assume he includes factors like these into his total profits.