Homes for All is a video series commissioned by Stadsleven in which correspondents from all over the world report on the state of the housing market in their city. In episode 4 Steven Lewis, Urban Design Director for the City of Detroit, shows how a strong vision of city planning can turn vacancy into a chance to attract market opportunities.
Blog written bij Sanne van der Beek
Detroit’s downfall: a tragic history
If you talk about Detroit, you cannot avoid mentioning its tragic history. Once it was a thriving city, also known as The Motor City, thanks to the large automotive industry. Companies like Ford, General Motors and Chrysler created quick growth for the city. But when the industry fell away, many jobs disappeared. And with the jobs, the people disappeared. A lot of middle class people left downtown to go to the suburbs. From 1.8 million inhabitants in 1950, Detroit dropped to a little over 672.000 in 2016.
And so it was that Detroit became the symbol of urban decay. In 2013 Detroit was forced to file for bankruptcy because of a debt of 18 million dollars. It was the largest city in U.S. history to do so. Michigan Governor Rick Snyder explained why Detroit had no choice. His arguments included that the fact that city’s unemployment rate was sky high: it had nearly tripled since 2000 and was more than double the national average. The homicide rate was also at historically high levels, and the city was named among America’s most dangerous for more than 20 years. Not only were crime rates high, but the municipal services struggled to keep the city safe. Detroiters, for example, had to wait an average of 58 minutes for police to respond, compared with the national average of 11 minutes. And in the first quarter of 2013, an estimated 40% of the city’s streetlights didn’t work.
Vacancy as an opportunity
And of course there was a lot of vacancy. At the moment that the city filed for bankruptcy, roughly 78.000 city structures were abandoned. “Since 2005, more than 1 in 3 Detroit properties — 139.699 out of 384.672 — have been foreclosed because of mortgage defaults or unpaid taxes, property records show,” according to the Detroit News in 2015.
But strangely enough, all those vacant buildings and empty land can also provide opportunities, as Steven Lewis shows in his ‘Homes for All’ video. By getting innovative development projects going, the city will demonstrate to development firms that there is room for interesting projects which might not work in other cities.
And in 2016, Dutch students bought a house in Detroit for a mere one month’s worth of student loans. These students from the small city of Delft bought a house because they wanted put what they have learned at the university into practice. They wanted to experiment with techniques to create a sustainable house. The Dutch housing market is so expensive that the students decided to make their dream come true in Detroit.
New property owners in Detroit, like the Dutch students, might have made the right move by grabbing land while it’s still cheap. The city took the number 1 spot in Forbes’ new ranking of undervalued housing markets. The ranking lists the city as 11.7 percent undervalued. This might have to do with the image of Detroit’s Renaissance which the city is carefully cultivating. In downtown Detroit, a lot of new restaurants, coffee places and public art projects are reinvigorating the city and letting millennials and empty-nesters rediscover the joys of urban living.
Besides attracting and housing newcomers, the housing market of Detroit is expecting to change in three important other ways, according to a report that the nonprofit Urban Institute, a leading national think tank, released in July of 2017, which forecasts metro Detroit housing trends through 2040.
The first trend is a big increase in senior-headed households, which are expected to double between 2010 and 2040. Most of those will be today’s middle-age folks ageing in place. That will put a premium on maintenance of older housing stock, as well as providing transit options for seniors no longer able or willing to drive.
At the same time, there will be a decline in African-American home ownership. African-American homeowners suffered disproportionately from the housing crash during the Great Recession and the foreclosure crisis. By 2040, the report predicts, the majority of African American households will rent rather than own their homes.
And thirdly, renting will be more in demand than ever before. Where in the Detroit regio it’s quite common to own your house, the report sees an increasing demand for rental housing, both because of changing lifestyles as well as financial inability to afford houses.
These challenges demand a strong pan-regional planning policy, as they cross city borders. The authors of the report write: “The default response is to focus on individual policy and program solutions that only affect one city or one facet of the housing market. Business as usual, however, ignores the opportunities for more effective and efficient strategies. [ A regional] collaboration does not happen overnight, but must be cultivated.”