Sunday, January 26, 2014

Downtown Detroit Rent Rates Soar

So it turns out that downtown Detroit (and Midtown and Corktown) are experiencing a revival.  If you want in on it, it will cost you more than it would have a year ago.  A lot more.

As the Freep reports, rents in the trendy areas are up, it seems by about $400/month all of a sudden.  Young white collar urban pioneers and hipsters are being forced out of their rentals because of the increase.  Taking their place are professionals and other people higher up the income ladder.

The David Whitney

Since I have friends in New York, Chicago, LA, etc., I will steal their thunder and agree that a $1,500/month rent for a two-bedroom in a desirable neighborhood downtown is not remotely possible where they live.  But we're talking about Detroit, where six months of that kind of rent can buy a house.

These rent increases are helped by several employer subsidy efforts, which will fade out eventually.  However, coupled with the staggering revitalization of the Downtown and Midtown commercial real estate market, Detroit has an economic engine that it has been missing since, well, ever since I can remember.  The synergy is there and I truly believe that things are going to continue to improve.


What is less clear is the impact on the other Detroit neighborhoods, including the longstanding leaders such as Indian Village and Palmer Woods.  Will these new hotspots take people who otherwise would have located there?  Maybe, maybe not.  As for the rest of the city, any positive effect at this point is unsubstantiated.  Maybe non-existent.  They still don't have adequate police and fire responses in Warrendale, Old Redford or Delray.  Until that problem is solved, we have two Detroit living experiences that are very different.

On a side note, it is nice to see my old classmate David DiRita quoted in the article.  Since he is identified as a developer in Midtown, I can only assume he is doing very well these days.