Priced out of downtown Detroit? … and maybe that's a good thing
Click On Detroit ran a CNN story Tuesday morning about some Detroiters upset they're being priced out of the downtown rental market.
We are conditioned to think rising rents are a bad thing. It's cause for consternation and concern.
Yet, when Zillow reports that metro Detroit home prices have risen 16.3 percent over the last year, the general consensus is that's a good thing.
Home price increases rarely lead to concerns about first-time home buyers being priced out of their dream neighborhood, nor are there many panel discussions about suburban gentrification pricing folks out of Harrison Township.
Home price increases are generally seen an indicator of increased demand and improved consumer confidence, reflecting a stronger overall economy.
Of course, those same factors also play a significant role in rising rental costs — in downtown Detroit and anywhere else.
That there is an increased demand for downtown housing, that more people are increasingly comfortable downtown are both good things. Rising rents is the inevitable result of those trends.
And maybe that's good news because it means Detroit, a city that has spent a half-century losing middle-class residents, is able to again attract the folks who make up the core of a tax base. Granted, the number of new downtowners is tiny compared to the 250,000 residents who have left Detroit since the turn-of-the-century, but small victories are still victories.
Here's some more good news: Compare greater downtown Detroit rents to rental rates in downtowns mid-sized Midwestern cities like Pittsburgh, Cleveland, or Milwaukee and you'll find very similar prices.
Older, smaller buildings on the edge of downtown offer inexpensive one-bedroom apartments for around $500-$600 in Detroit and similar Midwestern cities. The more luxurious central business district high-rises in Detroit are also priced similarly (more than $1,000/month) to comparable buildings in Midwestern cities.
Make no mistake: When we're talking about downtown rental prices rising, we're talking about a market correction (call it the re-gentrification of traditionally middle class and upper middle class areas) rather than a Manhattan-style hyper market, pricing out everyone but the proverbial 1 percent.
What's more, while downtown's prices may be going up, there are plenty of other, very livable Detroit neighborhoods with less expensive rents -- eastside neighborhoods like Islandview or West Village, and southwest Detroit communities not named Corktown, New Center, Palmer Park etc.
I say this as a renter myself, one of the trade-offs with renting is your housing price is only constant for the term of your lease. But make no mistake just because prices are going up at the Lofts at Merchant Row doesn't mean Detroiters are being priced out of great apartments or a desirable quality of life in the city.
Even more importantly, let's start these conversation by recognizing that economic situations are almost always more complex and nuanced than they can first seem.
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