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Metro housing boom gives economy boost

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Metro housing boom gives economy boost

Biggest jump since '98 may signal turnaround; Macomb, Canton, Detroit lead growth in '03


By Gene Schabath and Brad Heath / The Detroit News


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Awesome. Detroit looks like its starting to turn the tide and things in the city are improving.

To have more housing go on the market within the past few years be more then the past 20 or so years combined - something good HAS to be going on.

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A lot of people are rediscovering Detroit...especially midtown. They generally move from places in the suburbs. Although I'm sure that some people who already live in the city are also moving into these homes. Hopefully this signals an upcoming population increase. The decline is really leveling off.

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Fom today's paper....

New homes put Detroit in 3rd place for growth

Only Canton and Macomb Twp. had more construction

May 1, 2004



Detroit leaped to No. 3 among the metro area's top 10 cities for new residential construction, outranking fast-growing suburbs such as Sterling Heights, Novi and Northville Township.

The city issued 872 permits for new houses, condos and lofts last year, up 54 percent from the year before when the city ranked eighth with 586 authorized units, according to a recent report of 2003 data by the Southeast Michigan Council of Governments.

In 2001, Detroit didn't even make the top 10 list.

The jump is good news for a city that collects only 11 percent of its $1.4-billion general fund from property taxes, and is projected to lose about 86,000 residents during the next three decades.

"Things are happening in Detroit," said Janet Mocadlo, a SEMCOG planning analyst who wrote the housing report based on monthly data from 233 cities in the metro area.

"Builders are finally seeing a renewed interest, people want to move downtown," she said. "They are making big headway."

The SEMCOG report ranks Detroit behind Macomb Township in Macomb County and Canton in Wayne County for new housing last year. Macomb Township had 1,421 new units, while Canton had 1,003.

In recent years, Detroit has seen new condos, lofts and single-family houses going up in hot spots around the New Center, downtown and Riverfront areas, and in blighted neighborhoods in southwest, northwest and east Detroit.

In the mid-1990s, when the Bagley Housing Association started a residential revival in Mexicantown, the average home price was about $10,000.

The group started modestly with two new houses on a vacant lot near I-75 and Bagley. They had to start with two because they weren't sure how they would sell.

"All the momentum was on the side of desertion and despair," said Vince Murray, the group's executive director. "It takes a lot to turn that around. It takes a long time."

By 2002, the housing association had finished the construction of 45 new homes -- all of which sold with a starting price of $55,000.

Today, the group is overseeing the construction of 72 new condominiums, which start at $160,000.

"There is a lot of activity," Murray said. "That's not to say there is still not a huge amount to be done yet."

The construction spreads citywide.

This year, U-SNAP-BAC, another housing nonprofit, completed about 150 single- and multifamily homes called MorningSide Commons on the east side.

Still, the city won't feel an immediate effect from the rise in new construction.

At the current rate, it could take up to 15 years for the city to slow its population loss and begin to make gains, said Jim Rogers, SEMCOG's data center manager.

"At the present time, it's not enough," Rogers said.

The city needs to build new housing as it demolishes old ones. Detroit, bleeding population since the 1950s, is still demolishing homes that are abandoned and deteriorating.

The city was responsible for almost half of the demolitions in the region last year with 1,231 units, the SEMCOG report shows.

"If you look out far enough, Detroit will get to a point where new construction equals demolition or surpasses it," Rogers said.

That won't help the city in the here and now as it faces a projected $263-million budget deficit this year.

Matthew Grady, Detroit deputy finance director, said the increase in new housing is an investment in the city's future, not a quick solution.

"You will not see an immediate bang as a result of this in property taxes or income taxes," Grady said.

He said a more immediate impact will be felt as new businesses, such as dry cleaners, stores and restaurants, open near successful new housing.

"It all feeds on each other," Grady said. "This is getting the ball rolling."

Contact MARISOL BELLO at 313-222-6678 or [email protected]

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