Most of America’s major cities have seen an apartment-development boom in recent years.
In fact, CoStar Group Inc.’s research from 2016 shows that, out of 189,000 multifamily rental units built in in 54 U.S. cities that year, 85% were luxury apartments or condos.
The one city as yet unaffected by this development is, sadly, Detroit.
Due to scarce bank lending and the overall risk of building or renovating in a city with an underemployed population and thousands of vacant homes, Detroit has been passed over by most condo developers. But as vacancy rates rise and rent growth slows in other, stronger markets, eyes are turning back to the Motor City with renewed interest.
Additionally, downtown Detroit has seen job growth to the tune of about 20,000 jobs since 2010, and new downtown residents have a higher median income ($55,000) than the city average ($26,000). They’ve even been attracting trendy businesses to the area. But until bank lending picks up, Detroit developers have been combining public subsidies with investor capital and their own money to complete projects, even though it may take years to see a return.
The Wall Street Journal has more on the risks, and possible rewards, of housing development in Detroit.
—RealClearLife
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