This article appeared as a Spotlight in Detour, which is described as “an email newsletter for the Detroit community.” It was written by Kate Abbey-Lambertz and distributed on November 6, 2018.
Yet another hyped development that didn’t live up to promises, and left tenants dangling
You know when people tie balloons to their door to advertise a yard sale, or a graduation party, or some festive event? Using red balloons to identify poor tenants who are behind on their rent is kind of exactly the opposite, but it definitely happened. So reporter Aaron Mondry discovered from a tip that led to a Detroit News story published Monday. (Mondry reported the story with Outlier Media, an accountability nonprofit and Detour partner.)
We chatted with Mondry to hear a little more about the situation at Brightmoor Homes, 190 houses primarily rented to low-income families, most of whom are single mothers.
Mondry first checked out the tip that the property’s management company, KMG Prestige, was Scarlet Lettering its tenants. A KMG executive said the balloons were meant to let residents know to contact the company urgently, rather than a shaming
But Mondry heard more nd more complaints from the tenants of Brightmoor Homes — residents had exorbitant fees added to their rent on the regular, but couldn’t get issues like basement flooding or black mold handled expediently.
Still, some residents have stuck around for years and years. Why? Because they thought that the nonprofit developer, Northwest Detroit Neighborhood Development, would give them the chance to buy their homes at a reasonable price after 15 years were up. The first 45 homes recently hit the deadline, but no renters have become homeowners.
“The developer billed this as an affordable rent-to-own model,” Mondry said. “They attracted investors that way, they got publicity that way and, ultimately, they got renters that way.”
It sounds like a great get for residents, who trusted a neighborhood developer to follow through. In fact, the Brightmoor model doesn’t sound too different from the lauded tiny house rent-to-own program run by Cass Community Social Services, noted above.
But NDND’s actual agreements with tenants are a lot murkier, and residents are paying way more in rent than their homes would have cost. Mondry described one woman who had paid out more than $100,000 over the 15-plus years she’s lived in a Brightmoor Homes property. She was given the chance to buy it for almost $80,000 — far less than what the limited local market would support.
Complexity of the financing, requirements for the use of low-income housing tax credits, and unforeseen market crash mean there likely wasn’t an intentional bait-and-switch on the part of the developer. But still.
The city has started putting pressure on NDND, as well as the management company, which contracts to manage 32 other Michigan State Housing Development Authority projects across the state. The state agency told Mondry it’s received no direct complaints about the Brightmoor housing management, though you have to wonder if there should be a little more scrutiny.
Mondry said the there is now a path to ownership program for Brightmoor Homes tenants that has 19 people enrolled (no one has completed it yet). He’ll be looking to
see if the program succeeds.
Meanwhile, the majority of renters in Detroit are “rent-burdened,” meaning they pay more than 30 percent of their income on housing. Poorly maintained units and negligent landlords pushed the city to start a sweeping rental inspection program. And so-called “affordable” units in new developments often aren’t truly priced for Detroit incomes. So it’s pretty depressing when one of the real affordable developments — planned by a nonprofit and with a slew of public financing — isn’t much better.
