The Southfield Housing Boom

[Allan]

The Southfield surprise: Home building is booming in the inner-ring suburb, despite above-average taxes and below-average MEAP scores

April 18, 2004

BY JULIE EDGAR

FREE PRESS STAFF WRITER

Tanya and Lamont Simpson could have moved just up the road to Farmington Hills and saved a bundle in property taxes.

Instead, they stayed in Southfield and staked a claim to a $320,000 suburban fortress typically found in the metro area's tonier ZIP codes.

That puts them in the company of lots of young single and married professionals and empty nesters in Southfield who are fueling a mini-boom in housing that is taking city officials by surprise.

"It's pretty bizarre. We've got the second- or third-highest tax rate in the state. People are paying double here, but they're still building. In Troy, they're used to it, but we're old. It's not like we're a burgeoning suburb," says Nik Banda, Southfield's planning director.

Since 1998, Southfield has issued close to 800 residential building permits -- among the highest for suburbs near Detroit -- for homes and condos that are fetching from the low $100,000s to more than half a million dollars.

Southfield Mayor Brenda Lawrence calls the trend amazing and hopes it's driven, in part, by an attraction to Southfield's schools, public and private, and its ethnic and religious diversity.

Math and reading MEAP scores for the Southfield Public Schools district run about 5 percent below state averages. Other districts are Oak Park Schools (14 percent below) and Birmingham Public Schools (26 percent above). Seven colleges and university centers are in Southfield.

Taxes are $55 per $1,000 of a house's taxable value in the Southfield school district, $40.60 in Oak Park and $44.18 in Birmingham. A $166,293 (average price) house with a taxable value of $83,146 would have property taxes of $4,565 in Southfield, $3,375 in Oak Park and $3,673 in Birmingham. Jonathon Hallberg, executive director of Southfield's Cornerstone District, a redevelopment area bounded by 8 Mile and 9 Mile roads and Mt. Vernon and Southfield roads, says the city's stability, affordability and top-notch services attract residential builders.

"Southfield was one of the first edge cities, and we are more vital than ever," he says. "Things are happening downtown, and we have staying power as a corporate center. We're not a Royal Oak or a Birmingham, but we can offer some of those amenities."

A sense of community

A craving for the sense of neighborliness that older communities seem to offer is driving a demand for new housing in the cities that ring Detroit, says demographer Kurt Metzger of Wayne State University's Center for Urban Studies. People are fed up with long commutes, and for those leaving Detroit, they're getting away from high property taxes and insurance rates, Metzger says.

Southfield also offers a level of social comfort for blacks, who make up 54 percent of the city's 78,331 population, he says.

"The housing boom is wonderful. So often, when a city becomes majority African American, the variety of folks looking for housing drops because whites won't look in those areas. Luckily, this isn't happening," Metzger says.

Residential builders explain it this way: Buyers want upscale housing in a location that makes it easy to get to Detroit, to their jobs, to restaurants, casinos and malls. They also want a safe community with reliable snow removal, street repair and garbage pickup.

"We took the opportunity to build in the area because after doing a lot of market research, we found there was huge demand, but not (much offered) at the price point we were offering," says Desiree Davis, marketing manager for Tadian Homes, which built the Village at Cornerstone town houses in the Cornerstone District. They are priced from about $140,000 to $170,000.

Larry Cohen, president of Cohen Associates in West Bloomfield, which built the 286-unit Park Place town homes at 10 Mile and Evergreen, says his residents -- doctors who work at Providence Hospital, people who work in the Town Center complex, young families and new college graduates -- like Southfield's urbanity.

And a 55-mills tax rate is apparently not a deterrent. The Park Place town houses at 10 Mile and Evergreen, priced at about $200,000each, are almost sold out, and more than half the town houses at the Village at Cornerstone have been snatched up. Only 16 of 100 condominiums at the Vistas at 9 Mile and Southfield roads are available for sale, and there are several more projects under way.

Castle II Construction, based in Redford Township, continues to build luxury homes throughout the city because the buyers are there. Workers are putting up three more 3,000- to 4,000-square-foot homes along an unpaved horseshoe off Evergreen between 9 Mile and 10 Mile roads. They are selling them for up to $650,000, says project manager James Devidts.

Most of the buyers, he says, are black professionals looking for upscale houses on large, wooded lots.

"People can't believe we're building this type of product in Southfield," Devidts says. "The only difficulty with Southfield is it's pretty much developed."

Park Place residents can hop on the freeway to quickly get to points north and south. They can walk to work if they're at the Town Center, and they're close to the Southfield Civic Center, which offers a state-of-the-art library, skating rink and golf course.

"I think taxes are always a concern. But I also think that home values that are in a modest range, all the bills that come along with that are modest," Cohen says.

More revenue, full schools

In the past four years, Cohen and other developers have cobbled together relatively small parcels of land in Southfield for $27 million in new construction -- 1,019 new town houses and condominiums and hundreds of spacious single-family homes like the one the Simpsons have.

As a result, the city expects to reap about $360,000 this year in new tax revenue, says assessor Michael Racklyeft.

Public schools are experiencing fuller classrooms, partly because of the building boomlet, says Ken Siver, spokesman for Southfield Public Schools. Enrollment, especially in the middle and high schools, has climbed by about 900 students since 2000 to about 11,000 students.

It's unclear how big a lure schools will be in coming years.

In late March, voters turned down a millage renewal for public schools, leaving the district with no choice but to go back to voters or risk losing $68 million a year in revenue. Another loss could mean a severe blow to school services and the city's reputation.

Location and a sense of security were key in helping the Simpsons decide where to live. Three years ago, the couple, both in their early 40s, bought into Tyler Estates, part of a concentration of 144 new brick colonials off 12 Mile Road between Northwestern Highway and Inkster.

They paid $320,000 for their 2,700-square-foot home, which was customized with a second-level loft space. They moved in in 2001.

Both like the easy commute to work. It takes Tanya Simpson 15 minutes to get to her job as a bank manager at Charter One in Livonia, and Lamont Simpson, a referee for pro and college sports, gets to and from the airport with ease.

"We chose the area because of its easy access to the Lodge, Telegraph, I-275," he says. "And I think it's a quality neighborhood."

Their $8,000 annual tax bill? They don't like it, but they've just refinished their basement, and they're staying put.

"We feel safe, and we feel comfortable," Tanya Simpson says. "We walk our dog at night."

Contact JULIE EDGAR at 248-351-3294 or [email protected].