As downtown living continues to gain in popularity, one community in the region is stepping up to the window to help property owners who would like to enhance their investment, while developing a second revenue source through creation of upper-floor apartments in the city’s central business district. It’s Dowagiac.
Private downtown property owners in that Cass County community will once again have the opportunity to apply for funding through the City of Dowagiac to develop such upper-floor apartments, or lofts.
Dowagiac plans to apply for Community Development Block Grant funds from the U.S. Department of Housing and Urban Development, through the Michigan Economic Development Corporation, to support the development and rehabilitation of quality and affordable rental housing within the downtown.
Vickie Phillipson is Program Director for the Dowagiac Downtown Development Authority and the Greater Dowagiac Chamber of Commerce. She says, “The continued conversion of unusable, upper-floor space into residential housing is beneficial to the property owner and also to the community, as it enhances the vibrancy of our central business district.” Phillipson says that the Rental Rehab Program provides property owners with a forgivable loan of up to $60,000 to develop each apartment. Property owners have to contribute only 25-percent of the total project cost for each rental unit. The program can also be used on existing apartments, when significantly upgrading finishes and appliances.
At the time of the initial lease, 51-percent of the renovated apartments in a building must be rented to low-to-moderate income households. If two apartments are developed within a building, the second apartment can be rented at market rate. Rent can also be increased to market rate, after the first tenant has chosen to relocate.
Rent for low-to-moderate income households is dependent upon total gross income for all household residents. Based upon HUD averages for Cass County for 2019-2020, one person can make up to $35,150; two people can make up to $40,150; three people can make up to $45,150.
Phillipson says, “A number of building owners, within the last 10 to 15 years, took advantage of a similar program, however, funding at that time only provided for a loan of up to $35,000 per apartment,” adding, “Today’s program has been significantly strengthened in favor of our property owners.” She said some downtown apartments are now being leased at up to $1,000 per month.
Property owners interested in learning more about the program should contact Phillipson at 269.782.8212.
The photo accompanying this story on Moody on the Market is for illustration purposes only and is not intended to represent available options in the community of Dowagiac.
