Developer tests the market with 23 new home sites near Indian Village

Among the first new speculative homes built at scale in Detroit in decades, sales are underway at a new-build development on the city’s east side.

Detroit-based multi-family apartment developer Greatwater Opportunity Capital LLC is now venturing into the for-sale side of the real estate business with a new project one block east of the historic Indian Village neighborhood.

With two homes already pending at full asking price, one currently listed and two more under construction likely to be ready for sale by early summer, the developers have a total of 23 home sites along Fischer Street between Kercheval Avenue and St. Paul Street.

The developers acknowledge that the project — estimated at an $8 million-$10 million investment should all 23 houses be built — is something of a market-tester, but is also designed to be replicable around the city, which has ample amounts of vacant land.

“We didn’t know. It was definitely an act of faith,” said Matt Temkin, a managing member and co-founder of Greatwater, when asked about the demand expectations for the new homes. “The neighborhood is great. The goal was to just make (the product) great.”

The current footprint of the project sits along Fischer Street in the East Village neighborhood just outside the Indian Village historic district, home to stately, century-old mansions and the occasional new build.

Just farther west is the West Village neighborhood, home to an increasing amount of consumer-facing retail businesses and multi-family developments. 

The Greatwater homes are built on property acquired from Hantz Woodlands LLC, a tree farm situated on about 2,000 vacant parcels around the lower east side of Detroit and long owned by metro Detroit businessman John Hantz, who has in recent years been selling off parcels.

The push by policymakers, residents and developers for new and increased housing stock in Detroit and around the state has reached something of a fever pitch in recent years. Amy Hovey, who runs the Michigan State Housing Development Authority, has said the state is about 200,000 units short of what’s truly needed.

While 23 single-family houses on Detroit’s lower east side may not change that math much, a developer building new speculative houses does mark something of a turning point in the city, said Jed Howbert, another Greatwater co-founder and a veteran of Detroit Mayor Mike Duggan’s administration.

As the city has mounted a comeback post-bankruptcy, much of the push was around new housing options in Detroit’s central business district and immediate neighborhoods, such as Midtown and Corktown. But like other cities, there’s a “lifecycle” as the development spreads, according to Howbert.

“That lifecycle is occurring in Detroit and many want to stay in the city,” Howbert said. “We see an opportunity to have a really well-built new construction home as opposed to a beautiful old home.”

Duggan said the Greatwater homes project offers the luxury of choice for those looking to live in the city.

“It is going to take a lot of different solutions to meet the incredible demand we see for living in Detroit,” the mayor said in a statement. “Some people want condos or to live in an apartment on a vibrant commercial corridor, while others want the challenge of renovating a Land Bank house. But there are a lot of people who want to live in a house in a Detroit neighborhood, but prefer new construction. The Greatwater model allows people to have a brand-new option in a great walkable area of the East Side, close to lots of retail, restaurants, and proximity to the water.” 

With their East Village project, the Greatwater principals say they’re trying to offer buyers much of the same experience and upgrades they might find in a traditional suburban, newly built subdivision, but in an urban neighborhood.

The houses come in 12 available designs, a mix of ranches, bungalows and cottage styles and range from two bedroom, one bathroom homes up to three bedrooms and two-and-a-half bathrooms. Sizes range from 900-1,800 square feet. 

A base model can be purchased for about $285,000, according to Temkin. A wide variety of upgrades are available, ranging from tile and cabinets to adding an additional bathroom in a finished basement.

The houses are being built on lots measuring 30 feet x 100 feet.

The two houses with sales pending are poised to sell for $339,000 and $459,000 respectively. Sales are being handled by Bill Swanson, a broker with Detroit-based O’Connor Realty LLC.

The project is being financed with private capital, and buyers can qualify for the Neighborhood Enterprise Zone tax abatement, which can reduce both the city and Wayne County operating millage by 50%, typically resulting in savings of 15%-20% for homeowners, according to the city.

While development in Detroit in recent years has resulted in numerous new condo and townhome projects, real estate experts could point to few if any single-family developments of the scope planned by Greatwater.

Temkin, one of the Greatwater principals, said homebuilders “make plenty of money elsewhere” in their projects as opposed to coming to Detroit neighborhoods. He pointed to real and perceived bureaucracy at the city level as one potential deterrent.

Asked about expected demand for the product, Howbert said: “It’s still early days,” but with two home sales already pending, the demand has “exceeded expectations.”

Compare Properties

Compare
You can only compare 4 properties, any new property added will replace the first one from the comparison.