Gilbert charity development aims to improve Detroit housing but sits vacant, boarded

A development in Detroit near Michigan Central Station that promised to serve as a model for building affordable housing fast has instead suffered delays, frustrated neighbors and raised questions about whether the homes will truly be affordable.

In February 2024, the Gilbert Family Foundation and North Corktown Neighborhood Association announced they would build nine homes on a mostly vacant street to show the potential of manufactured home building to quickly deliver affordable options.

But the up to $5 million project is behind schedule, leaving the seven homes built thus far sitting vacant for months — long after their October public unveiling. Since then, two have been broken into, with doors boarded up and the neighborhood association hiring round-the-clock security to protect the homes.

Building costs estimated to exceed more than $500,000 for some houses have also rendered the project too expensive to replicate without a deep-pocketed backer like Gilbert, the foundation acknowledged.

Detroit faces an affordable housing shortage driven by rising rents and a historic lack of investment in repairing aging homes and building new ones. Peter Hammer, faculty director of the Damon J. Keith Center for Civil Rights at Wayne State University Law School, who studies economic and social issues impacting Detroit, said the project’s challenges show the difficulty of creating affordable housing in a “highly dysfunctional housing system,” and offer a broader lesson.

“This is the wrong tool for the problem that they’re trying to solve … if you’re not focusing directly on the nature of the problem and trying to tailor your solutions to what people actually need, you get all of these white elephants,” Hammer said, an analogy that references an expensive and costly-to-maintain gift of limited use.

Gilbert Family Foundation Executive Director Laura Grannemann stood by the project, saying its primary objective was to “spark a conversation” around the potential for manufactured housing in Detroit.

The current vacancy is not a problem, she added, as long-awaited electrical connections included upgrades to ensure the “homes are set up for success.” Low-income buyers will also receive support to maintain the homes, she said.

“While this was a delay, we’re still really confident that we’re doing the right thing that will ultimately be to the benefit of the homeowners and to the community,” Grannemann said.

North Corktown Neighborhood Association President Bre Williamson, who inherited the project after her predecessor’s departure, said the homes will be listed for sale as soon as June.

Though she said she appreciates the intent to create affordable housing, she has concerns about how the project unfolded.

“I do just think a lot of this boiled down to inexperience — on our part as an organization, inexperience on (the Gilbert foundation’s) part in it being their first run at this type of project,” said Williamson. “It’s a hard project to work on. I would caution community groups to not entertain housing unless it’s something they’re already specialized in.”

An innovative project

The development funded by the Dan Gilbert-backed foundation is known as Tomorrow’s Housing Innovation Showcase — or THIS.

Located about a half-mile from the newly revamped Michigan Central Station, it sits in North Corktown, a neighborhood seeing a surge of new construction and rising housing costs. In the last 24 months, the average North Corktown home sale price soared to more than $400,000, sales data shows. Median income in the neighborhood, however, remains just $30,000, according to census data.

Built on two mostly vacant blocks at 16th and Perry streets, the nine homes to eventually make up THIS are reserved for households earning 50% to 80% of the region’s median income, with the Gilbert foundation covering the gap between building costs and sale prices. The seven houses erected thus far range from 800- to 1,800-square feet and were initially due to be priced from $225,000-$280,000, Williamson said.

In addition to spotlighting factory-built construction, the development is to be managed by a Community Land Trust, a budding concept in Detroit. Under the CLT model, a nonprofit owns the land on which the houses sit and maintains long-term affordability by limiting the profit owners can make when they eventually sell the home. Grannemann said the Gilbert foundation was drawn to North Corktown because its neighborhood association had already established a separate CLT.

“Detroit lacks quality, affordable housing solutions,” Grannemann said in a February 2024 statement announcing the plan. “This investment will showcase the next generation of housing solutions, putting Detroit at the center of housing innovation.” It would also “lay the groundwork for a more stable housing ecosystem,” she said.

Unrealistic timeline, vacancy

Philanthropies are known — and often lauded — for their willingness to take on risky investments in an effort to solve stubborn societal challenges.

To show how quickly manufactured housing could be built, the partners budgeted less than four months for the project, starting construction in July with a plan to unveil the homes in October.

That, however, left less than four months for DTE hookups in a long-idling area with antiquated infrastructure. Such upgrades typically take at least a year, Williamson and two Detroit development experts told the Free Press.

By the time of the October open house, the homes were still not connected to power.

Nevertheless, the four-day festival went on — with a DJ, food trucks serving free fare and a community land trust policy talk that asked attendees “What is a city but the people?” For the duration of the event, the houses ran on generators.

Three weeks later, as they remained unoccupied — appliances and staging furniture still inside — two were broken into. Stolen was a generator valued at $1,500, according to a police report obtained by the Free Press.

The neighbor’s view

Thirty-six-year-old Alex Lauer poured his savings into gutting and renovating a pre-1900s Victorian he bought in 2017 on a vacant block of 16th Street. In the last year, THIS was built around his home.

A construction manager and real estate broker, Lauer was skeptical about the pace of the project when he learned about it and expressed his concerns to the groups involved — including the Gilbert Family Foundation, North Corktown Neighborhood Association and the architects — but “pretty much nobody listened to me or cared to hear what I had to say,” he said.

Twice in July, after construction began, an excavator ripped out powerlines, triggering explosions on the street and cutting his power, Lauer said.

“Every step of this process has been problematic,” he said. “There hasn’t been one step that has been executed properly.” Then in November, the two break-ins happened.

“The Gilbert Family Foundation has postured themselves in this way where they want to take the credit for the good that has yet to be done, and they want no accountability for the damages and neglect that has occurred. And I’m just stuck here having to watch this every single day, and to me, there’s no end in sight,” he said.

The new houses surrounding him are expected to remain vacant through at least next month, according to Grannemann. Power hookups ordered July 2 took 10 months to complete, with work wrapping up April 29.

At issue was a late-stage development decision to add garages that triggered a safety requirement to move power poles. DTE requested a city permit for that work in October, but did not receive one until February. The city said the approval process took five months because the developer did not provide clear instructions.

Grannemann said the complicated nature of Detroit development makes it “important to push on some of these deadlines a little bit.”

“Part of this project is to say we think we can bring this innovative technology to the city of Detroit in a way that meets our design standards, is beautiful, is high quality and is preserving affordability but that also brings product to market in a quicker way,” Grannemann said. “… So I think it’s still important to push on the process so other projects can benefit from speed to development.”

‘Who’s got that kind of money?’

Tony Candell, a 70-year-old lifelong North Corktown resident, says he has endured a lot in the neighborhood over the years, from hearing gunshots nightly to drug trafficking and regular thefts. THIS has come too late to help the people who were there alongside him, he said.

With seven homes standing empty, Candell said he doesn’t like the look of it all.

“Sounds like these highly educated, smart billionaires don’t have no common sense to me. They got more money than brains.”

As for the price, initially projected to be at least $225,000 — nearly 10 times the assessed value of his own home, he asked: “Who’s got that kind of money?”

Indeed, the association is reevaluating the sales prices of the homes. Williamson said in April that prices may need to come down to ensure they’re affordable for people living at 50% to 80% of the area median income.

Academics have also questioned whether the houses could be affordable for buyers earning so little. The income bands translate to $50,500 to $80,800 for a household of four. For a home to be considered affordable, total housing costs including utilities cannot exceed 30% of the household’s income.

“It doesn’t take a mathematician — anyone trying to support a family on $50,000-$80,000 could tell you a quarter-million dollar home is not affordable,” said Lex Eisenberg, an affordable housing researcher and lecturer at the University of Michigan, noting that beyond paying their mortgage and utilities, buyers would have to cover the cost of repairs, property taxes and home insurance.

Eisenberg added that “a house deemed affordable based on AMI for the entire Detroit metro is not actually affordable for legacy Detroiters,” because median household income for Detroiters is about half that of the metro region.

“If you want to make homes truly affordable for people who have lived here, if you want people to be able to stay in these homes and build wealth, the costs to them must be much lower,” Eisenberg said.

Prices are high because the project has had conflicting goals: displaying the cost efficency of manufactured housing, and destigmatizing that type of housing, which can conjure the image of trailer parks. The latter goal resulted in a showcase of varied home models from multiple manufacturers and of higher aesthetic quality — at least two of which are on pace to exceed more than $500,000 in building and site work costs, Williamson said.

For Williamson, “ultimately the goal was to show this is just a really cost-effective way to build.” But, she added, “It has just turned out this is not the case. I don’t know if the industry is far enough along to produce in-fill homes at a reasonable cost that meet a certain design aesthetic.”

Williamson declined to provide a complete project cost breakdown, saying investments are still being made in garages and other areas. She said the decision to designate the homes as for-purchase to households earning as little as 50% AMI — the lowest designated buyer income bracket in Detroit, as per city data — predated her.

Who benefits?

Bill Cheek, who lives a few blocks from THIS, called the development a “vanity project” and said the foundation should have instead helped low-income North Corktown residents maintain their homes by investing in new roofs and other needed repairs.

“It’s frustrating from the perspective of what they could have accomplished here,” Cheek said. “When you look at having the resources Gilbert has … deploying ($5 million) into this neighborhood could have made orders of magnitude of difference in people’s lives.

“This is the pinnacle of the nonprofit grift that exists in Detroit,” he added. “You’ve got all these dollars that seem readily available around the city, and how are we using those dollars to … really make a difference?”

Williamson thinks a lot about rising housing prices in the neighborhood — the adult children and grandchildren of longtime North Corktown residents who cannot afford to buy homes there. For her, the project is beneficial because it ensures some quality lower-cost and community stewarded housing.

But she also thinks about the approximately 60 North Corktown homes with crumbling roofs.

“I think we’re just repeating the same cycle that got us to homes with significant deferred maintenance,” Williamson said. “Why do we have all this land in Detroit? Because it used to be houses. And we didn’t invest in upkeeping them then, we didn’t invest in the people who were in them, we took the people out of them and then we just let them sit, and then they disappeared and we were just left with land.”

The Gilbert foundation and a related Gilbert entity that does charitable work — the Rocket Community Fund — have indeed historically focused on stabilizing existing Detroit housing, with $33 million in investments in home repair and tax-foreclosure prevention programs.

But Grannemann said the philanthropy has expanded to new development because “we’re not going to repair our way out of the housing issues in Detroit.” Also needed, she said, is increased “innovation in (the) housing supply so we can have more housing diversity that can address lots of needs and increase the quality of our housing stock.”

THIS — even with its prohibitively high costs — helps move the city toward that goal, she said.

“If you are a regular developer and you’re trying to replicate the project, is it going to be replicable? No,” she said. “But does that mean factory-built technology is not an important tool for the future of housing affordability? I also think the answer is no. … We can take the information from and the learnings from this project and apply them to future projects in ways that will be more affordable and sustainable.”

For Williamson, the project’s lessons are different.

“The way we do all of these things is just broken,” she said. “There’s been such significant disinvestment that we’re just sort of putting Band-Aids on bullet wounds here. We’re not actually solving a problem.”

This article was updated to reflect the Rocket Community Fund is not a registered charity.

Nushrat Rahman, who covers economic mobility for the Free Press and BridgeDetroit, contributed to this report.

Violet Ikonomova is an investigative reporter at the Free Press. Contact her at vikonomova@freepress.com.