I talk a lot about Detroit’s Strategic Neighborhood Fund (SNF) and different streetscape projects.
But again, it’s easy to go on quick brain dumps over the phone with investors I work with but it’s impossible to get all the details out during a short conversation.
If you’ve been digging into the Detroit real estate market you may have heard about the Strategic Neighborhood Fund but you likely don’t truly understand what the SNF is or why it’s a big deal.
Fear not! I’ve got you.
I’m going to clear up any questions you may have about this awesome program, where it’s happened (and currently happening), and whether or not we can use this as a strategy to guide our Detroit real estate investing plan.
Let’s dive in!
Understanding Detroit’s Strategic Neighborhood Fund
By 2014 it was clear Detroit was starting to see some much needed changes.
But those changes and investments were largely siloed in a handful of pockets, most notably downtown.
In hindsight that makes a lot of sense. You can’t rebuild a vast city all at once. You need an incredibly strong base to build from.
But long-time residents were getting pretty agitated feeling like they were being completely left out of the Detroit comeback.
And whether it was part of the plan all along or if it was in response to these cries for inclusion, the Strategic Neighborhood Fund was launched in 2014 with $42 million in funding.
The fund was initially created to target three areas of Detroit for investment and streetscape projects. The idea was to focus on communities that had remained strong and resilient and make them even stronger.
Ultimately, these first three targets were deemed successful enough to expand the program to seven other target areas with an additional $130 million.
Most of these Detroit neighborhood framework plans include a significant investment into the community through parks, community centers, and residential housing improvements.
But they usually include a large streetscape project as well.
Detroit Streetscape Projects & Why They Matter
On the phone with an investor the other week I was asked, “what is a streetscape project, anyway?”.
The question stopped me in my tracks.
It was one of those moments that made me feel a bit dumb.
I’ve mentioned Detroit streetscape projects a multitude of times to other investors, simply figuring they understood what I was talking about.
This individual’s question was likely on many other folks’ minds as I blabbered on about different streetscape projects throughout Detroit. But everyone else was afraid to ask.
In short, Detroit streetscape projects tend to revitalize commercial corridors by improving lighting, sidewalks, roadways, parking, and walkways.
The idea is to make these areas safer, more aesthetically pleasing, and to spur growth in new businesses and commerce.
The city of Detroit has a website explaining these streetscapes in more detail and listing the different streetscape projects by year.
Ultimately, these streetscape projects have had a huge impact on the growth and revitalization of Detroit neighborhoods.
How impactful?
Let’s take a look at the ten target neighborhoods to understand the progress they’ve seen or have planned.
Detroit Strategic Neighborhood Fund Progress
Now that the Strategic Neighborhood Fund has been active for nearly a decade we’ve had the chance to really see how the initial efforts have unfolded.
And it takes time, right?
Creating smart, equitable plans and involving the community throughout the process is no small task.
As a result, some targeted neighborhoods are further along than others. And it’s worth understanding where each of the 10 neighborhoods are today in terms of progress.
Let’s break it down!
Livernois/McNichols aka The Avenue of Fashion
The Livernois/McNichols area was one of the first big projects under the Strategic Neighborhood Fund. Many folks simply refer to this as the Avenue of Fashion.
In reality, it was an experiment to see if careful planning could revitalize a neighborhood. You get a real feel for how experimental this all was in this short video:
The streetscape project started in 2019 and finished during the summer of 2020. But the work was far from over!
Completing a streetscape is one thing. The real work is attracting businesses to help revitalize an area.
Luckily, the Avenue of Fashion has done an amazing job of that.
You can get a great feel for the different businesses that have moved into the area as a result of the streetscape project in this Visit Detroit article.
The Southwest/West Vernor Neighborhood Plan
Better known as Detroit’s Mexicantown, the Southwest/West Vernor area was among the initial three targets of the Strategic Neighborhood Fund.
Things were unfolding in this neighborhood at about the same time as the Avenue of Fashion project, and there seemed to be some struggles for small businesses during all the construction.
But, to me, it looks well worth it.
By January, 2020 Detroit’s first-ever shared street was completed in Mexicantown and it looks pretty cool!
I’m a bit ashamed to say I’ve never been to Mexicantown, but now I badly want to visit!
Mexicantown has been booming for years now.
Granted, the Detroit Mexicantown community has been extremely resilient (which tends to be a theme with these projects), but the Strategic Neighborhood Fund was clearly a catalyst in helping things improve.
The Islandview/Greater Villages Neighborhood
The Islandview/Greater Villages target area encompass Islandview (obviously) as well as Detroit’s West Village, Indian Village, and East Village.
This Strategic Neighborhood Framework was anchored by the Kercheval streetscape project running right through Detroit’s West Village.
The project was completed in 2021 and you can see the fresh look and cleanliness it’s brought to the area.
I love this article from last year that takes a look at all the business activity that’s been taking place there.
This is another great example of how the projects have begun to reshape communities by focusing on bringing in businesses.
The Grand River Northwest Neighborhood Plan
The Grand River/Northwest framework was not part of the original three target areas for the Strategic Neighborhood Fund.
Instead, it was added as part of the expanded plan with seven more neighborhoods.
With learnings and confidence after the initial three streetscape projects, plans called to (smartly) update some infrastructure during the Grand River project.
This included the water main and replacing lead service lines.
The overall Northwest Detroit framework project focused on two main pockets but the streetscape anchor was placed in the Grandmont-Rosedale subdivision.
Again, this has been a great success. Grandmont-Rosedale is a vibrant and strong area in Detroit.
This area, particularly the northern pocket where the Old Redford Theatre is located, caught my eye way back in 2019.
It drew me in enough and gave me confidence to bet on the area with my very first Detroit rental purchase, The Great Greydale, located just around the corner.
The Jefferson Chalmers Neighborhood Plan
The Jefferson Chalmers area was targeted under the SNF and underwent framework planning between 2018 and 2019.
Part of this planning was building out and attracting businesses like Norma G’s restaurant which now seems to be winding its operations down.
And while the owner’s cite slower than anticipated development progress and “uncertainty” as some of their reasons, it sounds to me that the challenge of running a restaurant is more of a factor than anything.
My understanding is this framework plan did not have a big streetscape project focal point like we’ve seen in many of the other target areas.
Instead, the plan focused on some larger buildings and developments, residential housing stock improvements, and park upgrades.
Here’s a one-minute video highlighting some of these projects:
While there has been progress, it does feel a bit slower. That tends to happen when taking on these bigger commercial buildings.
One great example of progress is the Neighborhood Resource Hub that was opened a couple years ago.
Jefferson Chalmers is definitely an interesting area that I believe will continue to be strong. But it can feel isolated.
That’s also part of the appeal. The water access via canals is a selling feature for folks that enjoy a boating lifestyle.
Ultimately, I believe the area will continue to see development.
The Russell Woods/Nardin Park Neighborhood & Dexter Streetscape
I fell in love with Russell Woods back in 2019 after randomly stumbling upon an off-market duplex that became my first self-sourced deal.
Since then I have been pounding the table on the area, as well as Dexter-Linwood as a whole, but most folks think I’m crazy.
The framework plan for the Russell Wood/Nardin Park area went through planning during 2018-2019.
And there has been some progress like the improvements to Zussman Park I watched unfold in 2021.
But the focal point of these projects tend to be the streetscapes. And the Dexter Streetscape project wasn’t announced until just recently.
The streetscape project is receiving $21.5MM in funding.
While the Dexter streetscape project hasn’t started yet, it’s definitely coming.
It’s already gotten started with some pop-up retail shops that may not look impressive, but this is how things start moving.
The whole project will give a big boost to the momentum that’s been happening in the area over the last several years.
Detroit’s Banglatown Neighborhood Plan
The Campau/Banglatown Strategic Neighborhood Fund target area is anchored by the Conant Streetscape Project.
The streetscape project was completed in 2021 and you can get a feel for how things were shaping up in this 2019 article.
To be honest, I don’t know much about this pocket and it seems difficult to find a ton online about the current progress.
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That said, it’s clear there’s still momentum with projects like this old school building being converted into affordable housing.
I do know the area is home to a large Bangladeshi population and culture. This article does a great job of diving into the history here.
The city adding this to the target list for reinvestment is great.
The strength here is drafting off Hamtramck and it’s wise to double down and continue making Detroit an attractive place for the community and culture to expand to.
Rebuilding The Warrendale Neighborhood
The Warrendale/Cody-Rouge neighborhood framework program included several items to improve the area. The theme was to create a youth-centric neighborhood.
As part of this Strategic Neighborhood Fund plan, the West Warren streetscape was completed in 2022.
Anecdotally, I can tell you the plan has been a success.
When I first started investing in Detroit in 2019, nobody wanted to touch Warrendale. This 2017 article details some of the area’s struggles and how the community felt “left out” of the revitalization efforts.
By late 2020 I had made a few trips over to Warrendale to check out some potential houses, but I never ended up buying anything.
It just didn’t feel ready yet.
But in the last couple years the neighborhood has become far more popular from a real estate investing standpoint. More people are investing there and looking at it as an up-and-coming area.
It seems Warrendale has turned a corner, and the Strategic Neighborhood Fund has been a big part of it.
Difficulties With The Gratiot/7-Mile Area
The Gratiot/7-Mile area is a challenged spot in Detroit. The wide Gratiot thoroughfare tends to present unique challenges for redevelopment plans.
And it’s likely part of the reason this is the last of the 10 Strategic Neighborhood Fund targets to see changes.
While things do seem to be progressing for the Gratiot and 7-Mile area, it’s slow.
The area is notoriously rough. A good friend of mine, born and raised in Detroit, had previously warned me from going into this pocket.
Not just for investment reasons, but… physically.
It’s known for gang activity and deemed dangerous.
Obviously, that’s probably changed a bit since our first conversation about it in 2020. And I’m sure it will improve going forward.
But for now, this is one of Detroit’s more troubled areas and has seen the least progress of all the SNF targets.
The East Warren Neighborhood Plan
The East Warren streetscape is by far the one I’m most excited about and plugged into.
It’s for good reason.
I fell in love with the Morningside area in 2019 and one of our first Detroit rentals was purchased there.
We now own five homes in the area and I was extremely involved with the community while we lived in Metro Detroit.
Watching the progress has been incredible!
The E Warren Streetscape, an $8.2MM investment, is nearing completion.
And it was recently announced that another $35MM will be invested there as well.
Restaurants, shops, and small businesses are coming into the area faster than I can keep track of.
And awesome new developments like The Ribbon are already underway.
Here’s an aerial shot of The Ribbon on Detroit’s East Warren. It is coming together quickly! And notice the streetscape progress on the left.
This area is absolutely on fire!
That said, I can confidently say that the Morningside community has been well organized and active for years. Neighboring East English Village has been even more resilient over the years.
The city isn’t plucking neighborhoods at random for these Strategic Neighborhood Fund investments.
They recognize leadership and strength and, instead, come in and double down on already strong activity.
So should we, as individual investors, be using the SNF areas as a signal for our own real estate investing?
Investing Around SNF Targets As A Strategy… Does It Work?
There’s a lot of temptation for Detroit real estate investors to have tunnel vision and start trying to hunt for properties right around these Strategic Neighborhood Plan projects.
And now that you know a fair bit about them all you’re probably feeling pretty confident!
But there are a couple issues with this “strategy”.
Prices Reflect Progress
For starters, quite simply, you are late to the game.
The areas that have seen major improvements have also seen major house price appreciation.
That’s not to say there isn’t more on the horizon. There likely is. But you aren’t going to find a “deal” in a prime location.
That means you likely won’t find anything that cash flows. And isn’t that a big part of why we’re investing in Detroit?
As an example, I was buying homes in Morningside in 2019 and 2020 for $40,000 – $50,000. You can’t get a decent home in the area today for under $120,000 – $150,000+.
This is where people start trying to buy near these development projects and get in trouble because they don’t understand the landscape of the Detroit market.
Detroit Is Vast And Difficult To Analyze
As real estate investing markets go, there’s nothing quite like Detroit.
It’s huge and incredibly block-by-block, meaning you can go from an investable area to a war zone extremely quickly.
That’s why I created the Detroit RE Playbook, and it’s the best investment in your education you could make if you’re even considering investing in Detroit real estate.
Don’t Get Tunnel Vision
I wrote this post to help folks understand what the Strategic Neighborhood Fund is and why Detroit streetscape projects are important.
But I could have just as easily written it as a post about why Detroit is an incredible up-and-coming market that every real estate investor should take a hard look at.
The reality is the Detroit story is just getting started.
You do not have to be hunkered down with your investment properties right next to one of these streetscape projects.
A rising tide will lift all boats. And buying a decent area on a strong block is ultimately the most important factor when investing in Detroit.
Yes, it’s important to understand what’s happening in terms of investments and neighborhood targets. But don’t let that close your mind off to opportunities outside of these locations.
Have you invested near any of these areas? Do you have a favorite one? Is there something I completely missed in all of this that I should be including?
Let me know in the comments!