Live-work units offer relief from housing downturn

Terra Land Group, which produced the Town Commons traditional neighborhood development in Howell, Michigan, is now turning to inexpensive live-work units as a way of coping with the current housing market — sluggish in much of the nation and especially depressed in Michigan.
“The Michigan market is absolutely horrendous,” says Geof Greeneisen, vice president at Terra Land, based in Novi, northwest of Detroit. “The average house is on the market 14 to 18 months now.” A solution the developer has identified is production of entry-level housing — “soft lofts” and live-works — that Greeneisen says can attract Generation X, Generation Y, and “black-collar creatives” to downtown locations needing revitalization.
Terra Land teams up with municipalities to find in-town locations where it can build rows of 24-by-65-foot modules, each module containing a live-work unit encompassing the first and second floors and a completely separate “loft” residence on the third floor. The company’s 1,381 sq. ft. loft unit, offering vaulted ceilings, two bedrooms, and a balcony, typically starts at $159,900. A 1,533 sq. ft. two-story live-work unit starts at $219,900. “We’re getting two sales a week, whereas [builders of detached or condominium units] are getting sales of one to two a month,” Greeneisen says.
The first floor in the live-work unit is only about 350 sq. ft., which suits a start-up business or a one- or two-person operation, such as a hair salon, real estate office, chiropractor, or architect, he says. Behind the first-floor space are two attached garages, each of them containing tandem parking for two vehicles.
A commercial-grade stair connects the first floor to the second, so the second story can legally be used as an office. In some instances, the ground-floor space is used as a den or other living quarters rather than business space.
Terra Land previously developed live-work units at Town Commons, but Greeneisen points out that those were larger and more expensive, which is typical of greenfield developments, he says. The infill product, by comparison, is purposely built smaller to appeal to people who have less money and who in most cases are younger.

younger buyers
These younger buyers are just what a community with a downtown needs, says Greeneisen. “Typically they work eight hours, they come home, shower, shave, and they’re out on the town. Downtown is the amenity.” When a place to live costs a great deal more, he says, the buyers end up being older and less active or they work long hours — neither of which infuses energy into a downtown.
Forty-two of an expected 70 units have been built on a former ball field in Walled Lake, a little city of 6,700 just outside Detroit. Sixty-two units are being built in Ferndale, a Detroit suburb whose downtown is reviving as the “creative class” takes up residence. The City of Ferndale, population 22,000, worked with Terra Land to place the development on five parking lots not far from one another, where the lofts and live-works would give a presumably helpful boost in density at strategic nodes in the city.
“Both of these projects were public-private partnerships, including lenient building and fire code interpretations and land purchases directly from the municipalities,” Greeneisen notes. “It’s an inexpensive way to get brand-new office space in a little downtown.”
The architect, Alexander V. Bogaerts and Associates, has designed the buildings to have exterior materials that reflect the location. Near an industrial section of Ferndale, split-face block and standing-seam metal were chosen. For a site between a residential area and a commercial area, there is more of a reliance on brick, HardiPlank, and bracketed eaves. Terra Land expects to introduce similar products in two other Michigan cities — Kalamazoo and Port Huron — where Laurie Volk of Zimmerman Volk Associates recently completed market studies.