A rental boom in the heart of Detroit, but at what price?
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Detroit retiree Naomi Sims moved to Midtown a few years ago.
“I wanted to get the experience of apartment living,”she explains. “I thought this was the place to be because my daughter was living down here already.”
Sims has lived in Detroit since 1968, but never in Midtown, which has become the most vibrant area beyond downtown. Although she had been a homeowner in the Grandmont-Rosedale neighborhood in northwest Detroit for years, her decision to move wasn’t difficult.
For one thing, she began to experience financial stress when the restaurant she owned closed during the 2008 recession, which tapped into some of her nest egg and made her mortgage payment untenable.
She was also ready for a lifestyle change. “It was the upkeep. It was shoveling the snow, my leaves, my lawn,” she said.
Sims has now become part of the growing ranks of Detroiters renting their homes, instead of owning. She’s done well, snagging a 1,600-square-foot flat with an affordable housing subsidy in the recently rehabbed Coronado Apartments, built in 1894. She’s paying less than $700 a month.
The U.S. Census reports that 53 percent of Detroiters now rent their homes, compared with only 44 percent in 2000. The market shift came mostly in the wake the foreclosure crisis.
Detroit sprawls across 139 square miles, much of it in housing tracts nearly one-quarter of which were built in a single decade, the 1950’s. One urban planner estimates that Detroit has more Cape Cod-style homes than any city in the nation. These were the homes of an urban middle-class that emerged with the booming post-World War II industries and many of them are now vacant, blighted or demolished.
Those that have survived often are to be found in neighborhoods where homeownership has plummeted as mortgage money has grown scarce. Detroit Journalism Cooperative partner Bridge Magazine reports that mortgage sales in Detroit communities outside of affluent areas like Palmer Woods and Indian Village are rare and most Detroit homes are sold instead for cash at prices averaging $30,000. Many of those cash transactions are by investors intending to transform the housing stock into rental units.
Melinda Clemons of Capital Impact Partners,
a nonprofit property developer says, “A lot of people who lost their homes (in the Recession) do not want to buy another home. Or, they can’t because of their credit. So, renting really has been the shift, not necessarily just in Detroit but nationwide.”
This shift came to Midtown in 2011 with a program called Live Midtown, that provided rent subsidies for people working in nearby hospitals and at Wayne State University. It was a strategic effort to attract more young professionals, according to the Hudson Webber Foundation, one of the supporters of Live Midtown. The program, available now only to employees of Henry Ford Hospital and expected to end later this year, reports it lured 1,100 new residents while retaining another 900 as of last year.
“Live Midtown has been a significant success,” says Wayne State University Urban Planning Professor Robin Boyle. “It’s stimulated the rental market.”
More rehabs and new construction have been adding new units to the Midtown mix, but they have brought with them higher prices.
Capital Impact’s Clemons says Midtown apartments are now going for more than two dollars a square foot. “Compare that to just five years ago,” she says, “(when) they were just over a dollar a square foot.”
That places prices, generally speaking, at between seven hundred to two thousand dollars a month for a Midtown apartment, according to Clemons.
The lower part of the Midtown district includes the Cass Corridor, which carried the stigma of drugs and crime in years past. “It was not what it is today,” says Patrick Dorn of the Cass Corridor Neighborhood Development Corporation.
“How do you overcome those thoughts about the area and have people move in?”
Dorn says Live Midtown program was created with that goal in mind.
He has rehabbed several apartment buildings in his area, including the historic Coronado where Naomi Sims lives. But now there is only so much old housing stock left.
“Most of the buildings are gone, really. We have been able to save a few.”
The once blighted, very recently rehabbed Chesterfield and Cass Plaza Apartments are now filled. According to Dorn, “Cass Plaza was built in the ‘20s when Detroit was the richest city in the world. It was built as a hotel, and fireproofed. There was no wood in the building.”
Cass Corridor Neighborhood concentrates on providing affordable housing for people working in the new jobs opening up in Midtown. “People, who are starting out at the hospital or at the casino or Wayne State or maybe a new tech business downtown, are not making a lot of money,” says Dorn. “They can come here and have a good, clean, safe place to live.”
But with more and people moving into areas like Midtown, could gentrification and higher prices be on the near horizon? In downtown that seems to be happening, as the recently renovated Albert apartment building dislocated low-income seniors from their homes.
But in Midtown, Urban Planning Professor Robin Boyle says the matter is more complicated. The rehabilitation of a vacant apartment building made possible by Live Midtown does not necessarily qualify as gentrification. “But if it’s pushing up the rent for a development close by,’ adds, “that could result in displacement.”
That’s why another program called Stay Midtownhas emerged.
Where Live Midtown subsidized people moving in, now the effort is to encourage current and often lower income residents to stay in Midtown with its own rent subsidies. Funded by the Ford and Kresge Foundations, the program launched in late 2016.
Elizabeth Luther, also with Capital Impact Partners, helped develop the program with Midtown Detroit, Incorporated. Luther says, “We’re using this as a temporary way of supporting existing residents who are experiencing the pressures of that rent change.”
The intent is to maintain a mixed income residential base.
As of early April 2017, more than 200 households applied for Stay Midtown subsidies, with 23 of them being approved.
“There’s nothing worse than all poor people together or all rich people together,” says Dorn, “If you have a mix, everybody’s life is enriched.”
On the northern edge of Midtown, or the southern part of the North End, depending on what map you’re looking at, Lisa Johanon, director of the Central Detroit Christian Development Corporation, is rehabbing the Casamira apartment building, constructed in 1925.
The building has to be pretty much gutted, as it needs new walls and a new roof.
Central Detroit Christian has been rehabbing homes for North End residents for years as part of its mission as a neighborhood church, but this year Johanon is assuming her largest risk as a property manager.
The younger population moving to Detroit wants apartments, says Johanon. “Folks are going, ‘I don’t need a single-family home that’s two thousand square feet to live in anymore. I’m looking for something a little more compact.’ And I think that’s what makes multifamily housing attractive for everybody.”
The Casamira will offer 44 units when it is expected to open this summer, 60 percent at market rate and 40 percent reserved for lower income residents.
“They’re very spacious units,” Johanon says. “They’re great and (so is) the location. This is going to be a very easy sell. We’ve got people who want to move in. We’ve said, ‘Waiting list.’”
Meanwhile, farther up Woodward in the North End itself, the home base of Central Detroit Christian, Johanon says she’s seeing more people exploring what’s for rent there.
“Some of that is Midtown creep,” she says.
“They’re looking at this neighborhood as the next step up, and they’re going, ‘Oh, there’s some cool housing here.’ ”