So-called live-work projects are cropping up across the country, even as their critics complain of wasted taxpayer money and housing discrimination.
In the name of the endangered American artist, urban planners and specialty developers from coast to coast are painting rich streetscapes from a palette of federal tax credits, state grants, and city loans.
The critics have been less than impressed.
In early December, the $13.7 million Artspace Uptown Artist Lofts opened in Michigan City, Ind., population 31,000. The 44-unit building for low-income artists is a conversion of a former office building constructed in 1927. The long-vacant building was donated to the developer by the city’s redevelopment commission.
About 30 miles to the west, the $16.2 million Pullman Artspace Lofts project on Chicago’s far South Side is stirring excitement. Built with the help of federal low-income tax credits and public grants, it’s set to open in midyear, and will provide 38 affordable, live-work units for artists and their families in the city’s Pullman Historic District.
In the aftermath of the Oakland Ghost Ship warehouse fire, the deadliest fire in the United States in 13 years, big-city elected officials are signaling a renewed desire for such live-work projects. Baltimore mayor Catherine E. Pugh has charged a new task force with finding ways to create “safe art spaces.” A Kansas City public-development corporation, via a citywide survey, is plumbing interest in affordable live-work space in that city’s gentrifying Crossroads and West Bottoms districts.
Similarly, in an open letter, the Denver Commission on Cultural Affairs lamented the closure of the bootleg artist and music space Rhinoceropolis, assuring readers it was working diligently to find solutions that would directly address the city’s lack of affordability for artists.
Such live-work projects are increasingly viewed as the essential pixie dust in revitalizing long-ignored urban cores, in no small part because they are more politically tenable than “regular” affordable-housing projects, which tend to meet with local resistance. But while they look good on the surface, live-work developments for artists are increasingly dogged by charges that their use of low-income tax credits, public grants, and loans is wasteful, and that their pricing practices and capricious artist-selection processes tend to favor white sophisticates over more traditional residents of public housing. Data also suggests their tenant mix skews toward middle-aged empty-nesters rather than the struggling millennials much more than boosters claim.
Live-work projects are increasingly viewed as the essential pixie dust in revitalizing long-ignored urban cores.
A 2016 study by the University of Minnesota Law School examined four projects in the state containing 870 units. The total cost of the subsidized units was $460 million. Researchers believe they represent the most expensive subsidized-housing developments in Minnesota history, in both overall and per-unit cost. The average cost of the units — mostly studios and one-bedrooms — was about $529,000. (To put this in perspective, for the same amount of money it took to build those 870 units, 1,590 houses could have been purchased in the affluent suburb of Minnetonka.) Meanwhile, the per-unit cost of the Pullman project in Chicago was $426,000, well above the median cost of a detached single-family home in the Chicago suburbs of Buffalo Grove $276,250), Wheaton ($279,750), and Itasca ($266,500).
The study’s findings suggest many cities are operating a two-tier public-housing system in which the majority of units are in low-cost, utilitarian developments in minority neighborhoods, while a subset of units in expensive, predominantly white neighborhoods are reserved for elite artists.
“Developers have figured out that there’s a glitch that they can exploit to build not-so-low-income housing,” Will Stancil, an author of the study, told The Atlantic’s Alana Semuels in a recent article.
The Fair Housing Act prohibits discrimination based on race, religion, national origin, and sex, but a loophole larger than an Oldenburg/Van Bruggen installation allows a developer to discriminate when choosing tenants for valuable subsidized housing based on ethereal standards, such as an applicant’s perceived commitment or excitement.
The artist-restricted properties have a few common traits. Like the Pullman project, they’re often adaptive reuses of historic buildings or in historic neighborhoods. This strategy allows developers greater access to tax credits, which balloons construction costs. They also serve as a hedge against community pushback, which in an era of social media can strangle a public-housing project in its cradle. If private investors alone were bankrolling such projects, it would be no one’s business. But it’s public loans, grants, and tax credits that make live-work schemes so attractive to developers. From 1995 to 2014, developers built 2,151,369 units with the use of federal Low Income Housing Tax Credits. In 2014, 22 percent of all new apartment units were built with the help of such credits.
Artspace, a Minneapolis-based nonprofit developer and owner of live-work spaces nationwide, bills itself as America’s leader in such facilities. To vet prospective artist-tenants, Artspace forms an artist-selection committee before a project goes vertical. Six months before completion, leasing begins and the artist-selection committee works with Artspace, which often remains as the building owner, to approve potential tenants.
Artspace says its committees don’t judge the quality of prospective tenants’ artwork. Instead, it says they focus on three criteria: The applicant’s commitment to his craft; his excitement about participating in the building’s community; and his willingness to live in a noisier environment.
A dissertation could be written on the “excitement” criterion. Would the aloof Pablo Picasso or the misunderstood Dadaist Man Ray have shown the requisite excitement to qualify for residency in a trendy live-work building? By Artspace’s description, it seems clear: He who interprets “commitment” and “excitement” doles out the coveted government-subsidized housing in these projects.
There is scant data on a national level about who is inhabiting subsidized live-work spaces. One limited study by Metris Arts Consulting in 2010 shows a majority of tenants, 58 percent, in three projects, were older than 45. Only 24 percent were 34 or under. If representative, this would dispel the myth that the majority of tenants are struggling millennials. A 2013 survey prepared by Artspace Projects and Swan Research and Consulting for the city of Austin, Texas, echoes the Metris study, finding that 45 percent of Austin residents in subsidized live-work spaces are 31 to 50 years old.
If this data is representative, many of the tenants of these projects are likely empty-nesters who would otherwise be in their prime earning years. In areas prone to housing shortages and sky-high rents, live-work projects would thus seem to emphasize the “live” over the “work.” This is predictable, according to Oakland-based architect and author Thomas Dolan’s “The Ten Truths of Live-Work Planning Policy.”
“There is a demonstrated tendency for live-work space to revert to purely residential use,” Dolan writes, “regardless of how it was permitted or represented.”
So while a coterie of developers harvests government grants, city loans, and tax credits — and certain hipsters demonstrate heightened excitement for their appliqués arts or urban haiku — less creative types who pay their taxes and go about their daily business are being stuck with the bill.