Upward Mobility in the Motor City

8 min read

Empresa puts YouthBuild grads to work   

The good news is that Detroit seems finally on the way back up with strong signs of urban renewal and rehabilitation. The not-so-good-news is that, as in many areas of the country, there is a shortage of construction trade workers to handle the challenge. But an innovative partnership is attempting to tackle the issue, while at the same time addressing Motor City’s need for affordable housing and bringing hope, confidence, job skills and upward mobility to a low-income demographic that for a long time had little of all four.

There are several ways to tell this aspirational story, but let’s start with the bricks and mortar.

Broderick Manor was a four-story 45,000 square-foot apartment building erected in the 1920s at 1516 Vinewood Street in southwest Detroit, in the Clark Park area of Mexicantown. For decades it was well-kept up and had a high occupancy rate. By the late 1980s, like much of urban Detroit, it fell upon harder times. Social threads from 2009 and 2010, lamented, “This apartment is home to drug dealers, addicts, ne’er-do-wells, misanthropes and other problem makers. People walking past this building have been constantly harassed by residents hanging out in front.” Then the fires started, several of them thought to be arson, and by 2011 the building was declared unsafe and uninhabitable. Vandals and looters completed Broderick Manor’s degradation.

In 2014, an entity of Shelborne Development Corp., a local company with more than 35 years of experience rehabilitating historic mixed-use buildings in urban areas, purchased the property from its owner for about $125,000, with the idea that it could be part of the city’s nascent revitalization. Founded by Kathy Makino-Leipsitz, Shelborne concentrates on developing and operating quality affordable housing projects using Low Income Housing Tax Credits and other tax credit vehicles.

SER Metro-Detroit is a nonprofit dedicated to cultivating a qualified, skilled and adaptable workforce for the metropolitan area by providing individuals in its programs with the education, training and resources needed, in its words, “to create a life of self-sufficiency and self-fulfillment.” SER stands for its mission of service, employment and redevelopment. SER runs one of the 260 YouthBuild programs, spread over 45 states and supported by the national YouthBuild USA, Inc. 501 (c)(3) nonprofit center.

As detailed in the July 2017 issue of Tax Credit Advisor, YouthBuild provides training, job experience and high school completion or equivalency to 16-to-24-year-olds, who are neither in school or working, in a pre-apprentice program with HUD-administered funding, aiming to break the cycle of poverty. At YouthBuild programs, low-income young people learn construction skills through building affordable housing for homeless and low-income individuals and families in their neighborhoods, and other community assets such as schools, playgrounds and community centers. The program, which generally lasts from nine months to a year, provides a modest stipend to participants.

“One of the benefits of our programs is that employers witness the mindset, work ethic and potential in our students and get to see them as people,” states David M. Abromowitz, chief public policy officer for the national organization. “We find that employers really get to know them as individuals, see them in a work environment and see them as assets for the long-term.” Abromowitz gave up a partnership at the nationally prominent Goulston & Storrs law firm (where he remains of counsel) to take the position.

Unique partnership
The rise in the cost of construction is due to many factors, but the skilled and semi-skilled labor shortage is prominent among them. “We get calls at the national office all the time for middle-skills workers. We address the skills gap by matching our graduates who are ready to be semi-skilled workers with jobs on the local level,” Abromowitz notes. “In Detroit, they’ve taken it a step further and created a joint venture with an affordable housing developer.”

That step is Motor City Empresa GC, which SER Metro formed with Shelborne to serve as general contractors for the $9.7 million renovation of Broderick Manor into a 49-unit residential building with studios, one- and two-bedroom apartments in an area expected to be an increasingly attractive part of Detroit’s redevelopment. About 45 percent will be classified as affordable housing and the rest will be market-rate. Ann Leen, SER’s assistant vice president for youth services and director of housing initiatives, says that financing for the project is in the final stages, with some delays caused by the tax law changes affecting LIHTC investments. The Michigan State Housing Development Authority has conditionally approved financial assistance and SER and Shelborne have applied for $1.5 million in affordable housing funds from the city. Foundation grants should account for the remaining ten percent of costs.

Original plans called for ground-floor retail space, but after surveying nearby businesses and talking to community stakeholders, the developers decided it might not be commercially viable yet in the immediate area and felt it would send the wrong signal if commercial space remained empty for a prolonged period.

The idea behind Empresa was to help fill the worker shortfall while profitably advancing YouthBuild graduates to the point where actual careers were in sight – what SER refers to as unsubsidized employment. “YouthBuild has been around for several decades,” Leen explains. “But in Detroit, we, as a community, had not figured out exactly what the on-ramp was for the construction trades. We have around 100 alternative education kids in our program every day. It’s our obligation to get them to the next step. We want to eliminate the bench time. We’ve been at the Start Line and now it’s time to run. We’re all working in the same ecosystem, with the same basic puzzle pieces.”

“So, we asked ourselves, ‘Would it help if we could control the construction experience and catch [our graduates] if they fall?’ You can’t expect a [professional, profit-oriented] GC to do that, nor should they. We approached Shelborne and said, ‘Why don’t we do it together?’ It made sense from a lot of different perspectives.”

“When a young person graduates from a YouthBuild program, he or she has a diploma or equivalent and industry-recognized credentials, such as OSHA certifications,” Abromowitz notes. “But they may not have the personal network or social capital to gain employment. New profit-nonprofit models, like Motor City Empresa, provide the path for meaningful employment in the construction industry.

Short-term apprenticeship
This type of enterprise in Detroit is creating a relationship almost like a short-term apprenticeship to show employers just how ready YouthBuild students are to join their team.”

Leen feels the initiative dovetails well with HUD Section 3 requirements that states, “recipients of certain HUD financial assistance, to the greatest extent possible, provide training, employment, contracting and other economic opportunities to low- and very low-income persons, especially recipients of government assistance for housing, and to businesses that provide economic opportunities to low- and very low-income persons.”

It is also an opportunity for SER to move deeper into multifamily projects, to develop experiences and greater expertise in financing and establish a new paid internship program. “It can’t just be the YouthBuild stipend,” she says. “This is the beginning of a new phase for us.”

Despite the various types of safety nets Empresa has set up for its new employees, including job developers who coordinate with construction companies and clients, Leen, SER and Shelborne are trying to be realistic in their expectations. “It would be naïve of me to say, ‘It’s just going to be fantastic!’ But if we’re taking federal funds, we have to step up to the plate. We know they’re not all going to get there. But our goal is to place them and change their lives.”

YouthBuild has done that for hundreds of participants. Jeremy (last names withheld) comments, “YouthBuild has helped prepare me for a career. I have learned how to communicate and will walk away with all kinds of construction certifications. YouthBuild makes you feel cared about and encourages you to make a difference in your life.”

At the 2017 graduation ceremony, student speaker Sara stated, “YouthBuild taught me to believe in myself and aspire to be something. I am the first in my family to graduate and I hope I am a model for them.

I have earned my GED, construction certifications and learned how to work on a construction site. YouthBuild gave me the tools to be successful.”

Rodderial, a 2018 participant, says, “The YouthBuild Program has even helped me to take extra pride in my city and help to rebuild it. I believe that by using the skills that I’ve learned in the program and participating in the community service projects, that I’m putting my own stamp on helping to rebuild a better Detroit.”

David Abromowitz observes, “All around the country, YouthBuild programs are partnering with local developers, housing authorities and others on a regular basis. Students in the program get exposure to real work situations. Models like this help bridge the gap from YouthBuild to moving into the construction industry.”

This is only the beginning for Empresa, and SER and Shelborne are actively looking for other properties to construct or redevelop. And they would like to see it copied throughout the industry. “We are building on a model that works,” says Leen. “In a region that has been hampered by unemployment and lack of literacy, we have a career path case study in construction that is already successful. We want to see it replicated.”

Story Contacts:
David Abromowitz                               

Ann Leen