IBJNews

Revitalization plan brings new homes to Crown Hill area

Back to TopCommentsE-mailPrintBookmark and Share

A subsidized, 15-home project under way in the Crown Hill neighborhood aims to help spur a revitalization of the area.

The not-for-profit Near North Development Corp. this month is wrapping up construction on the first property, a 1,600-square-foot, four-bedroom home at 3154 N. Kenwood Ave., just northwest of the Children’s Museum of Indianapolis.

The project is funded by $488,000 in U.S. Department of Housing and Urban Development grants targeting blighted neighborhoods that were funneled to the city of Indianapolis.

“The 3154 Kenwood property is one house out of a community of new homeowners that’s really creating significant improvements in that area for affordable homeownership,” Near North President Michael Osborne said. “Creating a real estate market where one doesn’t exist—that’s the point of what we’re doing.”

Near North is acting as master developer of the 15 homes. Near North will build four of the homes, while partner Habitat for Humanity will construct eight and rehab one. Mitchell & Sons Construction will rehab two vacant homes.

Osborne said the 3154 Kenwood project cost more than $185,000 to build. The house is listed for sale at $93,000, but optional upgrades like a two-car garage could add $8,000 to the price. The HUD funding will make up the shortfall.

Most of the 15 homes are in a nine-square-block area in the southern part of the neighborhood along Capitol Avenue and Kenwood and Graceland avenues.

Workers months ago began demolishing properties that were too dilapidated to rehab and launched renovations of others that were empty or abandoned.

The 15 home-project is Near North’s latest push to reinvigorate the area. The effort started in 2011, and by the end of this year, the organization will have developed 51 new homes for affordable homeownership, adding more than $5 million in housing stock.

"I’ve seen a lot of improvements in the neighborhood,” said Eboni Hearn-Lindsey, who bought one of those homes nearly a year ago. “New houses are going up and the houses that are boarded up are either being torn down or renovated.”

Hearn-Lindsey lives in a two-story house near 32nd Street and Kenwood Avenue. She previously lived in Carmel.

“I was paying almost double (her mortgage) for a two-bedroom apartment in Carmel,” Hearn-Lindsey said. “Now, I am living in a three-bedroom house and able to afford my mortgage.”

Houses like the Kenwood Avenue property on the open market could fetch upward of $175,000, Osborne said.

Near North is beginning construction on the second of its four houses, at 3201 Graceland Ave. It might start on its third this month.

ADVERTISEMENT

  • demolition
    Usually what's being demolished is much larger than what's being rebuilt. And it almost always has a basement...and asbestos...and lead...those are expensive demolitions. $20K is no exaggeration. . Then the builder has to run all new utility lines (water, sewer, gas) from the street, something that costs way more in a built area than in a beanfield. And federal money means energy star considerations...extra insulation, etc. Finally, if you know affordable housing, you know that Near North Development Corp. (and every other CDC in town) is a not-for-profit, and works on skinny margins.
  • Math 3
    Ok, to be fair, both examples are probably on the fringes to prove a point. Maybe $7.50/sf for demo and $80-85/sf for construction of something that is quality with modest finishes is more reasonable. So that gets to around 20% profit which is not "outlandish". But lets not also fool ourselves that anyone is working for 2-5%. The lesson here to me is that people are paying attention and there is a level of responsibility needed to make sure that subsidies are not inflating costs. Thanks to IBJ for digging into and disclosing the numbers so they can be vetted by the public.
    • expensive
      $11+/SF for demo and $90/sf construction are steep. Seems like when HUD $ is on the table it's an invitation to overpay rather than be conservative, which seems like the mindset we should be in when using taxpayer funds. Either way someone is making out well. If the builder truly has $175k in it at the end then all the contractors made hay. If they really have $135k in it ($7/sf demo, $70/sf construction) then the profit is about 37%. There is a premium built in because there is an infusion of HUD $ on the table so there is less pressure on pricing to keep it in line with the market. I realize that "the market" wont support any development here, but too often the pendulum appears to swing a little too far the other way when gov $ is involved. Im not against affordable housing efforts and revitalization. All for it and involved myself, but I also see where the public starts to get jaded about the process and feel like their tax dollars are not being used in the most efficient manner.
      • Math 2
        Oops. That's a 5% "profit", not 2%. In either case it's not extreme or "outlandish". The cost structure of building new in the midst of an old neighborhood isn't the same as building vinyl boxes in a beanfield. Grant-subsidized housing has to meet higher standards...which insures that it doesn't fall apart during its mandated "affordability period", usually 15 years or more.
        • Math
          Acquisition from County Surplus: $2,500 Demolition: $12-20,000 New construction: $90/sf x 1700sf = $153,000 We're at $175,500. A $9,500 "profit", or 2%, for buying, insuring, carrying, putting together the deal, financing construction (i.e. development) doesn't seem outlandish at all. Except maybe outlandishly low...and it explains why the "market" isn't rebuilding our old neighborhoods.
          • Wasted $
            The cause is great but the cost structure is outlandish. I call BS. Either one of two things is true. One, they are truly building a house that requires $185k for the developer to make a decent profit in which case it is a wast because they are way overshooting the market when the probably could have built two modest homes for that cost. Or option two HUD $ is being wasted on ridiculous profit and overhead for the developer, contractors etc. One is foolish, two is scandalous and the reason people get up in arms about subsidized housing.
            • Interesting
              Let's hope this plan/project pays off and helps the area. I've driven down through this area many times on the way to downtown and there are a lot of homes that need to be demolished.
            • Read please!
              Read before trying to find something to complain about. According to the article, "The HUD funding will make up the shortfall." This is a tremendous project that could lead to more private development and restoration of homes around there. This is to creating a starting point for further development.
              • Funneled?
                Nice money tree. Common core math: HUD $185,000 to build, sell for $93,000 (probably less...), at least $92,000 loss. Oh, and we moved from Carmel! Maybe someone should call HGTV's Nicole Curtis! She could show them how to do it AND make lotsa $$$$. Gimme Gimme Gimme

              Post a comment to this story

              COMMENTS POLICY
              We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
               
              You are legally responsible for what you post and your anonymity is not guaranteed.
               
              Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
               
              No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
               
              We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
               

              Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

              Sponsored by
              ADVERTISEMENT

              facebook - twitter on Facebook & Twitter

              Follow on TwitterFollow IBJ on Facebook:
              Follow on TwitterFollow IBJ's Tweets on these topics:
               
              thisissue1-092914.jpg 092914

              Subscribe to IBJ
              ADVERTISEMENT