Housing market analysis City of Detroit, Michigan U.S.

H O U S I N G M A R K E T - A N A LY S I S D E T R O I T

Weimar, February 2017

BASICS AND METHODS OF REAL ESTATE MANAGEMENT ArchitecturalManagement Prof.

Dr.-Ing.

ass.

Antonia

Bernd Herten

Nentwig M.Sc.

B a u h a u s - U n i ve rs i t y - We i m a r

H O U S I N G M A R K E T - A N A LY S I S D E T R O I T Carla Kienz ............................117699 Johan Nilsson ........................117801 Tanja Potezica .........................117700 Johanna Richter ......................117560

C

ONTENT

INTRODUCTION

7

LEARNING FROM DETROIT?

8

DETROITS FUTURE PLAN

10

DEMOGRAPHICS

15

AGE STRUCTURE

16

RACE AND HISPANIC ORIGIN

16

INCOME

17

POVERTY

17

CRIME

18

COMMUTING

19

SPATIAL PATTERNS OF DETROIT

21

SPATIAL STRUCTURE

22

HOUSING MARKET

25

MARKET TRENDS

26

HOUSING PRICES

26

HOUSING VALUES

27

HOME SALES

27

DEMOLTIONS

29

DISTRICT PROFILES

30

OVERVIEW AND COMPARISON DISTRICTS - DETROIT-MICHIGAN-USA

38

DATA VISUALIZATION & CONTEXTUALIZATION

40

REFLECTION

47

REFERENCES

48

I

NTRODUCTION

This report will look into the current situation of the housing market in the City of Detroit, Michigan U.S. The findings will further research and consider the changes of economic-, demographic- and housing characteristics, drawing on trends in the housing market and the history of the city and its development. These findings will mostly rely on quantitative data extracted from statistics and geographical spatial data, supported by other literature research along with news articles and reports done by both public and private institutions. Most of the data regarding market trends span between the years 2000-2015, with a

few indicators already reported as of january 2017.

These findings will be emphasised and presented together with graphics, images and maps as we try to conclude correlations between various data that affects the understanding of the housing market. The report also seeks to reflect and draw conclusions on which factors we can identify as the main drivers in the market, which actors and circumstances influencing it, and how the situation might be improved - seen from a broad perspective of the inhabitants, real estate actors and the city authorities.

7

LEARNING FROM DETROIT? Detroit, once a former symbol of industrial success and uprising metropolis, is nowadays the metaphor for the decline and dystopian future scenarios of cities. The decline of Fordism and the auto-industry, racial tensions and increasing segregation as well as political decisions making processes, converging together might have lead to the bankruptcy of Detroit City in 2013. How can we learn from Detroit? How is the City of Detroit dealing with a shrinking population spread over a surface of 139 square miles (Dear 2015, p. 5)? In the case of Detroit, “Neoliberal” politics and “austerity urbanism” (Peck, J. 2015), which has been applied to several other cities since 2008 doesn’t seem applicable. Instead an alternative approach to stabilize the economy, social infrastructure and the housing market is needed. There is “a consensus that economic growth alone will not reverse Detroit’s decline” (Schindler 2016, p.831). As a result Detroit could be seen as an experimental urban field. Schindler (ibid., p. 820) defines the current policy approach as “degrowth machine politics” with the “objective to improve the quality of life in the city rather than simply augment the value of land and spur economic growth”.

From growth to decline, is an investigation in the housing sector applicable and can this be recommended? The following section should serve as a frame for the housing market analysis and will offer an overview of historic and current development plans of the city, giving a brief overview of how the city in the future will deal with their economy, their social services, infrastructure and housing supply.

THE GROWTH AND DECLINE OF DETROIT CITY The growth and decline of Detroit can be described in several phases (Bekkering & Liu 2011, p. 3). Starting with the first phase in the end of the 19th and beginning of the 20th century, manufacturing and auto industries settled in Detroit. Firstly, “small, privately owned workshops dispersed all over the city” (ibid.) producing materials and parts for the large factories. In 1908, Henry Ford designed the Model T., revolutionizing the American way of life. This was accompanied by the first assembly line established in 1914 (Farley 2015, p.123).

The second phase is characterized by incorporating the smaller workshops to bigger factories. “In 1925 the city was home to 3,000 manufacturing plants, 37 automobile manufacturing plants, and 250 automobile accessory plants. Factories employed over 300,000 people” (Martin 1993). In addition, the great headquarters and 8

administrative offices of the automobile companies were built (ibid.). Nearly a century ago, the auto industry and the Fordist productions catalyst the city‘s development and made Detroit the fourth largest city in the country. “Detroit became the Motor Capital of the world” (Farley 2015, p.123). The peak was reached in 1950 when almost 1.85 million people moved to Detroit to find work, attracted by the three big auto companies: Ford, General Motors and Chrysler (Padnani 2013).

In 1909 Michigan adopted the “Home Rule” law, which made it easier for townships to form their “own highly independent governments” (Farley 2015, p. 122). Resulting in independent decision making processes, power over taxes, debts and distributions (ibid.). “The Home Rule system vests great authority in local governments as independent entities responsible for their own welfare” (ibid.). But in

1967: A workman adjusted a Ford Mustang in Detroit-area factory.

Preston Stroup/Associated Press

addition the “Home Rule Law” made annexations difficult.

As a result, in the 1960s Detroit was surrounded by 124 suburban governments. Stemming from the old law, every municipality regulated their own economic development and land use, resulting in the lack of a common regional planning approach (ibid.). In contrast to other cities, which recognized the need to annex suburban areas to the core city and to create regional plans including education, infrastructure and economy, the City of Detroit missed this important shifting point in the 1950s (ibid.). “Since 1950, 13 cities have surpassed Detroit in population size, primarily because they annexed their suburbs” (ibid.).

THE CITY OF HOLES Because of the restructuring of the working conditions due to increasing automation processes by replacing assemblyline jobs by machineries, the cities decline started slowly after the peak in the 1950s (ibid.). Decentralization and replacement of the factories took place because of increasing labor strikes related to racial tension in the city

(ibid.). In addition, the “risk of the city’s reliance on a single industry became apparent” (Padnani 2013). The tendency of the relocation of industry and offices of the companies from the urban to suburban areas, where larger spaces for fewer costs was available, increased (Bekkering & Liu 2011, p. 3). This can be described as the third phase – leading to a “City of Holes” (ibid., p. 4).

RACIAL TENSIONS The growing manufacturing industry in the beginning of the 20th century explained the migration of African Americans to Detroit, which lead to a prosperous and wealthy black working class population (Farley 2015, p.124). Meanwhile, it lead to bitter conflicts concerning the

Foto: Kevin Bauman

out placing itself again to even greater distances (more than 60 miles) from the city and its suburbs.” (ibid.). Since the 2000s the population continued to decrease by almost 25% and more than 50% of the city’s manufacturing jobs were eliminated (Schelter 2016, p.821). In contrast to other American cities “Detroit did not experience a real estate boom, the collapse of its housing market began in 2006” (Schelter 2016, p.821 quoted by McDonald, 2014). The decline in population and thereby the lack of tax revenues, culminated in 2012 by a deficit of $326 million (Schelter 2016, p.821 quoted by McDonald 2014).

THE BANKRUPTCY OF THE CITY A National Guardsman in Detroit during the riots of 1967. Associated Press

right to neighborhoods, to employment (ibid, p. 125) and an increase in racial tensions in the 1940s. During the 1950s, a high fluctuation of population is noticeable – the white population dispersed to the suburbs and black migrants moved into the urban center. “The solution of persistent racial conflict was the withdrawal of most whites from the city – the American Apartheid Solution” (Massey and Denton 1993; Farley, 2014, p. 126). In 1950, the population counted 16% African American, and by the time of the 1967 riots the share had grown to a third. In 2000 it has been estimated that about 82% of the city‘s population will be African American and the three county suburban rings will count for a white population of 86% (Farley 2015, p.118).

The city itself did not counteract those increasing tensions and Detroit became one of the most segregated urban landscapes in the U.S. (Schelter 2016, p.821).

Several policies and former planning decisions catched up with today’s Detroit. Few political and official leaders were even accused of corruption (Frayer 2015, p.122) and “numerous elected and appointed officials have gone to jail” (Frayer 2015, p. 123).

From 1950 to 1957 mayor Alberto Cobo declined “federal money for housing” but instead let the money flow into the construction of highways and thereby enhancing the suburbanization process (Pandani 2013). The hometown of

THE ONGOING DECLINE Further on, from the 90s to the 2000s “the car industry of the ‘Big Three’: Ford, General Motors, and Chrysler, was

Detroit‘s Michigan Theater; now used as a parking garage. Sean Doerr/WNET.org

9

the auto industry never invested in public transportation, but rather dismantled its highly used street-cable car system, instead emphasised the development of highways to reach the suburbs easily (ibid.). Today Detroit is facing the dilemma that, commuting costs have risen, and people have to overcome long distances. In addition, the majority of the population can’t afford a car anymore and the city itself is not able to maintain the conditions of the streets.

Coleman A. Young was the first Afro American mayor elected in 1973 and a main figure for 20 years. This was also “a shift in which race ran Detroit” (Frayer 2015, p.126).

Unfortunately his election didn’t decrease the tension between the “white” and “black” population but instead further increased the split. The fractions between “white suburbs” and the “black city” even intensified, supporting

in the direction of an ongoing downward spiral, financing their debts “with further borrowing, while tax revenues continued to shrink” (Schindler 2016, p. 822). In March 2013 Michigan’s Republican Governor Rick Snyder put an emergency manager, Kevyn D. Orr, in charge of Detroit’s finances (State of Michigan Executive Office 2013; Schindler 2016, p. 822). Kevyn D. Orr was appointed to oversee the city’s operations who declared the bankruptcy of Detroit in 2013.

DETROIT’S FUTURE PLAN How to re-envision Detroit’s Future and which plans could be applied to the city? According to Schindler (2016, p.

824) Detroit exemplifies the limits of “entrepreneurialism” in urban planning processes. Urban renewal projects, proposing for example the construction of the “Red Wings arena and the redevelopment of the State Fairgrounds” try to seek the redevelop parts of Detroit, and illustrate private-public partnerships, the transfer of land and entrepreneurialism in the city par excellence (ibid.). The lack of “serious investors willing to undertake any development” (ibid., p.25) shows the limit of entrepreneurialism and the need for another urban redevelopment approach from the side of municipal authorities.

Mayor Coleman A. Young of Detroit in 1980. Richard Sheinwald/Associated Press

mistrust and complicated a common regional planning approach. In 2013 Detroit was still one of the most racially homogenous cities with the highest poverty rate of 41% with 59% of children impoverished (Farley 2015, p.119). According to Farley (2015, p.131) racial changes in the metropolitan areas of Detroit can be recognized.

Key points in the struggle for equal opportunities came from the 1960s, when the Civil Rights Act, the Voting Rights and the Open Housing Law were won (ibid.). The achievement of these goals can be observed in changes in terms of occupation, interracial marriage and residential segregation (ibid.). With the “Open Housing Law” the real estate practices that enforced segregation in Detroit was overturned. The black population was no longer excluded by the suburbs, which caused another way of out-migration from the inner city. Between 2000 and 2013 the inner city lost 228,000 of their black population, while the suburb rings gained 167,000 (ibid.). “Detroit is still a highly segregated metropolis, but residential integration is occurring peacefully in the one all-white suburbs.” (ibid., p.132). Dave Bing was elected in 2009, “pledging to solve Detroit’s fiscal problem” (Pandani 2013). In regard to the trend of “austerity urbanism”, Detroit announced cuts in services, trying to balance budget deficits. The city turned 10

The Detroit Future Plan has been developed by the Detroit Works Project (DWP), launched in 2010 by the former mayor Dave Bing and is still supported by the current mayor Mike Duggan. It is a guide for decisionmaking regarding the city’s future, written and composed by various stakeholders, professionals and citizen participation through different mediums and methods.

This work started in 2010, finalized in 2013 into a policy/ directory document forming a framework for future main developments and focus areas in the city. The plan itself is governed by a non-profit organization, which is being supported among several others by the “Michigan State Housing development Authority” and in close relation to the City of Detroit’s Planning Department and the Major of the city. Financially it has been supported by several Foundations, including Ford Motor Co. and the Hudson Webber Foundation (Schindler 2016, p. 826).

According to the report, it is “the first time in decade that Detroit has considered its future not only from a standpoint of land use or economic growth but in the context of city systems, neighborhood vision, (…)” (p.5) (Schindler 2016, p. 826). The main goals of the framework in regard to housing, land use and urban development is to “Stabilize Neighbourhoods”, “Renew City Systems Strategically”, and “Transform Vacant Land Into an Innovative Open Space

Network”. (Detroit Future City 2017) The overall vision for Detroit is that it has the possibility to be a vibrant city of 700,000, if it can retain its young population, increase family wealth and earning power, get people out of poverty, attract recent graduates as new workers, welcome foreign-born families and ensure that the city’s oldest residents have the choice to grow old and stay in their current homes.

The framework is shaped by five main “Elements” which each contain several strategies. Here they will be briefly presented, showing the main outlines connected to housing. The elements consists of “The economic growth Element: The Equitable City”, “The Land Use Element: The image of the City”, “The City Systems Environment Element: The Sustainable City”, “The Neighbourhood Element: The City of Detroit and Regionally Competitive Neighborhoods”, and lastly “The Land and Building Assets Element: A Strategic Approach to Public Land”.

THE ECONOMIC GROWTH ELEMENT: THE EQUITABLE CITY The Detroit Future Plan emphasizes to diversify the city’s economy and focus on more sectors that have the potential for growth such as “food processing, medical technology, education and digital/creative industries” (Schindler 2016, p.827). The aim is to spur the economic growth, which will require “innovative approaches” (Schindler 2016, p.827).

downtown and suburbs-suburbs, and surrounded with green corridors will create these attractive neighborhoods.

The former housing structure and the “Fordist residential pattern of sprawling neighborhoods with single-family homes” (ibid.) will be replaced by new ideas of housing.

Neighborhoods will be designed “stronger, greener, and more socially and economically vital (…)”, featuring “a wide variety of residential styles from apartments to houses, and where residents are connected to jobs and services by many transportations options (…)” (ibid.).

THE LAND AND BUILDINGS ASSETS ELEMENT It tries to deal with the issues and problems the vacancy have on the aspect of “quality of life”, contributing to crime, negative impacts on public health, undermining property values, and the psychological aspect of seeing your surrounding environment hit by decay and decline.

The plan seeks to foster physical restructuring and nourishing of the already built, to positively raise the sense of confidence both for private citizens and local businesses. The plan emphasizes that there is a need for a common plan which creates a rigid structural system, in how to tackle the problem on a larger scale.

The city has 40,000 to 50,000 vacant buildings and the reality is that few of these will be able to be reused, or have any viable reason to be maintained. The plan seeks to implement a demolition plan, that contributes to the welfare and interest of property values and to the longterm goals of different neighbourhoods and in stabilize

THE LAND USE ELEMENT This part tries to make positive changes to the rate of vacancy, which in turn has an “infectious” effect on the physical conditions of the city and impacting the flow of investment into the market of housing. It seeks to divide the landscape typology into zones of the built environment into three categories; neighbourhoods, industrial and landscape. Through this, the framework can better guide stakeholders and developers on how to focus and visualize the physical development of buildings and the landscape to find their most optimal form (Detroit Future City 2017). [“We must introduce approaches to transform the vacant land of Detroit into a potential asset for the city’s future (...) and for all stakeholders and landowners to come together behind one shared vision] Transforming the empty lots into effective land usages, the plan comes down to create “A city of Distinct, Attractive Neighbourhoods”. It argues that concentrating services and employment into separate neighborhoods, connected by transportation lines that both aline between suburbs11

them. Abandonment is thereby recognized as one of the main threats of Detroit and three categories how to deal with the situation, depending on the level of vacancy, were evaluated (ibid.). The aim is to support densification processes and calls to concentrate the city’s population into areas that already have relatively higher densities than other neighbourhoods, to re-pattern the urban landscape and thereby creating a “Post-Fordist Future” (ibid.) structure.

It also means to target which vacant buildings have the potential to be revitalized and reused for when the population and businesses are concentrated to a fewer number, and smaller neighbourhood units. According to the need of new investments, “strategic” and “demanddriven” renewal will be applied. One of the strategies specifically argues for “Transforming largely vacant areas through blue and green infrastructure”, “Making landscape interventions central to Detroit’s revival” and finally to “use aggressive regulatory tools to reinforce land development, reuse and management strategies”.

THE NEIGHBOURHOOD ELEMENT In Detroit, as mentioned above, there are vast challenges to the quality of life, in the sense of lack of education, public safety, health and employment and more, but the plan argues that there has to be a greater emphasis on the opportunity to find a home where you can thrive and grow.

It tries to formulate broad strategies, but also addressing specific challenges which deals with maintaining affordable living with a diverse range of housing options, whichever life situation you are in. In terms of public services, the City of Detroit is well aware for the need to improve safety and education and calls for decentralized decision-making processes at neighborhood level. But at the same time the plan calls for a “holistic approach” (ibid, p.829), the cooperation between several public agencies and advocates a land-use policy; holding rather than selling public land.

The plan divides between neighborhood typologies according to their housing structures (apartment blocks, mixed-use or single-family homes) and emphasize to create “distinct and regionally competitive neighborhoods” (ibid.). Each neighborhood has a specific revitalization methods and initiatives will “assist residents in low-density areas to relocate to high-density areas” (ibid.).

“All land, whatever its legal ownership, is public in the sense that how it used and maintained affects its neighbors and the community as a whole, and affects the city’s ability to preserve its neighborhoods and built is economy (p.268).” (ibid, p. 289).

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The Detroit Future Plan will be applied in several phases until 2050. If Detroit will be prospering or at least be stabilized is open. The plan entails new approaches how to deal with decline and shrinkage. Downsizing and densifying the city is as well a challenging task, because the empty lots and houses are often dispersed throughout neighborhoods. In addition, Detroit has to struggle with high poverty level, unemployment, residential vacancies and lack of public services. The Detroit Future Plan does not focus on the rejuvenation of the Fordist manufacturing but rather thinks about alternatives, emphasizing more on community developments and quality of life aspects (ibid., p. 831). It is an approach to consider not growth, but rather degrowth as an alternative with the aim at least to stabilize economy and enable a bleeding ground for a stable society.

D

EMOGRAPHICS

In the 1950s the population of Detroit counted 1.8 million, representing the 4th largest city in the United States. This peak has been followed by a constant decline, mainly because of out-migration to the suburbs, change of the labor market and racial tensions. As a result since the last 60 years a constant decline of population was discernible.

Significant changes, from 952,279 inhabitants in 2000 to 713,777 inhabitants by 2010 represent a loss of 25% of population (World Population Review 2017). Especially between the years 2009 and 2010 there was an abrupt population decline of almost 200,000 inhabitants (U.S.

Census Bureau, 2015a). The latest counting was 688,701 inhabitants (ibid.), meaning a 60% population decrease since the 1950s. As a result the city had to struggle with social changes, resulting in an increasing stock of vacant housing, empty lots and thereby a decline of tax revenues.

According to the U.S. Census Bureau (2015a), the estimated population in 2015 was 677,116, representing a decline of -5.1% compared to 2010. The shrinkage of the city is still foreseen and in the future scenario, in 2030 a population of 610,000 inhabitants is estimated (World Population Review 2017).

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AGE STRUCTURE

RACE AND HISPANIC ORIGIN

The population in the 2000s, in regard to the age structure, was composed of 33.8% under the age of 18, 14% in between 18-24, 29.5% in between 25-44, 12.6% in between 45-64 and 10.4% older than 65 years. The median resident age was 30.9 (U.S. Census Bureau, 2010).

Within a century, as mentioned before, the social and racial structure of Detroit went through transformation. In the beginning of the 20th century till the 1950s a mainly white population lived and worked in Detroit city. During the peak in 1950 with 1,849,568 inhabitants in total, the white population counted 1,545,857 people (83.6%). In contrast the black population only made up for 16.2% of the whole city and counted 300,506 people (U.S. Census Bureau, 2005). American Indian, Alaska Native and Asian population only made up for a small part, counting together 3,251 people.

In regard to the demographic structure in 2015, the city still has a wide distribution of ages. According to the U.S. Census Bureau (2015b) statistics, 28.4% of Detroit’s population is under 18 years old, 11.8% are in between 1824, 25.0% are 25-44, 25.5% are in between 45-64 and 12.4% are 65 years old and older (ibid.). The median resident age in Detroit is 35 years (ibid.).

In the following years, the 1960s and 70s the city became more and more attractive by an Afro American population, later leading to racial tension and increasing conflicts between the black and white population. In the 1980s a significant shift is recognisable: the white population only counting 413,730 people, representing 34.4% of the 45-64 and 65+ population the black population counting 758,939 people, now representing a majority of 63.1%. The American 25,5% 12,4% and Asian population remained in Indian, Alaska Native low numbers (U.S. Census Bureau 2005). Detroit thereby

Detroit city will be on the one side confronted with an increasing population of young people in between 25-44, which lead to a demand of different housing forms than detached housing, and the need for more workplaces.

18-24 2015comparing <18the age data On the other hand of the25-44 2000s and 2015 the increasing number of population from 45 up 11,8% the future 25% to 65 years and older, might28,4% already envision tendencies towards an aging population.

Age structure

2015

1950

1,800,000 inhabitants

<18

18-24

25-44

45-64

65+

28,4%

11,8%

25%

25,5%

12,4%

Age structure

2000

952,279

2010

White 83,6%

1950 Others <1%

688,701

inhabitants

inhabitants

inhabitants

1950

2013

713,777

910,921

inhabitants

Black and African American 16,2%

2009

2000

Black and African American 82,7%

White 10,6%

2009

2010

2010

20

Others 1,4%

16

952,279

910,921

713,777

inhabitants

688,7

inhab

families $30,999

U.S.

per household $51,084

Average income

became one of the most segregated cities in the US, with a black population in the core city and a white population dispersed in the suburbs.

75%

estimated

employment

Still today a high segregated population is noticeable.

According to Census Data from 2010 Detroit’s population is composed of 82.7% Black or African American, 10.6% white, 0.4% American Indian and Alaska Native and 1% Asian people (U.S. Census Bureau 2010).

INCOME The 1950s were known as one of the most prosperous times in the US. The further development of technologies and the rising industry produced a consumerist society. In addition the boom of the housing market in the suburbs were signs for a growing economy. In parallel rising incomes and increasing public welfare improved the living conditions and the wage system made it for a wide range of the population possible to afford their own car.

living

below the poverty line

Looking at the statistic dating between 2011-2015 conducted by the American Community Survey (2011) the mean income for a household is estimated to be $25,764, for non-families $18,513 and for families $30,999. This is nearly half (52%) of the income compared to the median income in the US which is $51,771.

In 2010, 57.8% of all households paid more than 35% of their income for housing. In 2015 that number was 58.3% showing that affordable housing is still hard to come by for

DETROIT CITY

Average income

18-64

65+

57,1%

37,5%

20,4%

estimated

25%

unemployment most (U.S. Census Bureau, 2015c). The median estimated gross rent in Detroit in 2013 is $722 compared to the national level, estimated to be $889, a difference of 20%.

Living in Detroit, compared to other American cities seem to be expensive in relation to income distributions.

POVERTY According to the American Community Survey (U.S. Census Bureau, 2015d), 57.1% of the under 18 year olds are estimated to live below the poverty line, 37.5% between the ages of 18-64 and 20.4% of the 65+ respectively. Statistics from 2015 (ibid.), estimate that 25% of the population in Detroit (“civilian labor force 16 years and over”) are unemployed and 75% employed. Among these, there are still 19.6% that live below the poverty line even though they are working (41,731 people).

non-families $18,513

per household $25,764 families $30,999

<18

U.S.

per household $51,084

According to the annual report for Detroit in 2015 concerning homelessness around 10,406 people live on the street (Homeless Action Network of Detroit 2015).

Amongst them 193 under the age of 18 and 2,107 people which are categorized as “chronically homeless”, being “homeless four or more times in the past three years or have been homeless for one year” (ibid., p.3,5).

estimated

75%

employment

17

In regard to education the U.S. Census Bureau estimates for 2015 that from the population in between 18-24 years, 19,274 (23.7%) will have less than a high school degree, 27,154 (33.3%) will achieve a high school graduate and only 3,498 (4.3%) will achieve a bachelor degree or higher (U.S. Census Bureau 2015g).

The previously listed data is mirroring the difficulties of the city to counteract the emergence of a increasing young, poor and uneducated population. Raising the question of how the population and especially the increasing young generation will be able to afford housing if a high unemployment rate is estimated in the future.

2017). Concerning the property crime rate, Detroit has the double amount of incidents, 456.4 compared to the U.S. average rate of 220.1 (ibid.). In the case of the property crime rate a slowly decrease is recognisable since 2006, from the highest count of 919.1 incidents (ibid.).

As mentioned before the crime rates in Detroit including murder, rappes, robberies or theft incidents illustrate an extremely high rate compared to other American cities. It reflects the chaotic and uncontrolled situation in Detroit, the inability of the municipality to take drastic government actions. Because of the lack of public funds, the municipality is not able to afford or to maintain public services, like the presence of police or even street lights.

Detroit‘s situation seems to tell an ongoing down spiral.

CRIME The violence rate in Detroit is in comparison to the average national level crime rate very high. Nevertheless, over the last 10 years a slightly decrease has been recognisable.

2015 Detroit counted a violent crime rate of 984.9 (per 100,000 inhabitants) (compared to U.S. average 207.7), representing one of the lowest rates since 2004 (City Data

COMMUTING The main means of locomotion in the former “Motor Town” is still the car: 68.8% of the population take the car, truck or van on their own to go work and 13.2% share vehicles.

Only 8.6% are using public transportation systems. Mean

Regional commuter flow Waterford Pontiac

111,400

LIVE INSIDE - WORK OUTSIDE

Madison Heights Warren Sterlin G Heights

Troy Bloomfield Birmin Gham

Southfield Farmington

Livonia

Midtown Downtown

Ann Arbor

163,500

WORK INSIDE - LIVE OUTSELF

18

Windsor

Dearborn

70,700

LIVE AND WORK IN DETROIT

travel time is around 26.8 minutes (U.S Census Bureau, 2015e). According to the Detroit Future Plan (2012, p.359) an average of 32% of the annual household income is spent on transportation.

The City of Detroit should consider to improve the public transportation system and enable cheaper commuting alternatives. An improved network of public transportation and street system would better connect different neighborhoods and would make life in the city easier.

82%

CAR, TRUCK OR VAN 68,8% alone 13,2% carpooled

8,6%

PUBLIC TRANSPORTATION

4,1%

NON-MOTORIZED

3,6% walking

0,5% bicycles

Means of Transportation to work 19

20

S

PATIAL PATTERNS OF DETROIT

The following maps represent the current spatial situation of Detroit. They illustrate and locate the current setting of infrastructure (highway and public transportation), public spaces (parks, education, culture), industrial zones and point out where the recreational zones of residential and commerce are supposed to be implemented.

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SPATIAL STRUCTURE

22

Highway System

Public Transportation

Parks

Industrial Areas

Universities and Colleges

Revitalization & Densification of residential and commerce

H

OUSING MARKET

In the following part, the housing market will be examined from several perspectives. Firstly, the different profiles of the districts will be presented, thereby enabling an insight in the current structure in regard to the social, spatial and economic distribution in Detroit. The profiles will be followed by an overview of the current demolitions

in Detroit, realized since 2004. Afterwards the housing trends, values and rental prices will be discussed. The collected information about the districts will be put in comparison to each other by focussing on specific aspects.

The visualizations of those comparisons will finally lead to our reflection.

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MARKET TRENDS A report Forbes Magazine published in 2016 about “The five most overvalued and undervalued housing markets in the country”, ranked Detroit as second among the most undervalued city, “with home prices that are 23% below fair value” (Slowey, K, 2016). According to CoreLogic Data, the number of loans underwater have gone from 40,000 in 2009, to a steady decline to just below 20,000 in late 2015 (decline of 55%) (The Urban Institute, 2016). The city has a great supply but the number of jobs has between 2008 and 2015 fallen by 3% in the metropolitan area, where the city has already since beginning of 2014 and today 10,862 houses of the planned 40,000 (City of Detroit 2017).

According to Major Duggan, only 500 home mortgages were granted out of the about 3,000 homes sold in Detroit during 2015. And generally in Detroit, most sales are still made with cash due to few having the economical means to be granted a mortgage (see below for statistics) (Aguilar, L., 2016).

When looking at Detroit‘s demographics, main points are the high rates of unemployment, crime and alarming levels of negative public health. The ones dubbed Motor City has

now an almost completely depleted auto-industry. Today the population is seemingly young, having an average age of 35 with the majority moving to the city between 20102014, 34.6% and 27% between 2000-2009 (U.S. Census Bureau 2015c). Only 15.6% have lived in the city dating back further than 1979 when the industries were still peeking.

The population itself has gone from 951,270 in the year 2000, to 713,777 in 2010 (-28%), to 2015’s total of 690,074 (-3%) (U.S. Census Bureau 2015b).

As a whole, the city contains of 65.8% 1-unit detached houses, with the closest being the buildings with 20 units or more making up 11.7% of the total. Of all the houses being built,

HOUSING PRICES When looking at housing prices in the city between January 2000 and January 2017, it reached its peak noting in July 2005 of $130,000 (mean sale price), rising steadily from its first noting of $60,000 in 2000. The sales kept on at a quite stable rate until late in 2006, when it dropped from $79,000 to a staggering low of $18,000 in the beginning of 2007 (Trulia, 2017; Bai, B. et. al., 2016). In July 2008 the

0.0%

2014 or later

0.6%

2010 to 2013

2.7%

2000 to 2009

2.1%

1990 to 1999

2.3%

1980 to 1989

4.1%

1970 to 1979

7.3%

1960 to 1969

22.9%

1950 to 1959

24.6%

1940 to 1949

33.2%

1939 or earlier

Construction years of the building stock

single family Building stock 26

2 to 9 units

10 to 19 units

20 to 49 units

50+ units

median sale price did go up slightly, but then down again single family 2 to 9 10 to 19 20 to 49 50+ units to find itself stuck atunitsa recordunits low of $8,000, a decrease units of valueBuilding by stock 94% in a three year period. The market never recovered to its top mark in 2005, though there has been a slow but steady increase of value by 33% between July

$130,000

$79,000 $60,000 $40,000 $30,000 $18,000 $8,000 2000

2005

2006

2007

2008

2012

2017

2012 ($30,100) and today ($40,000) (ibid.).

Interestingly, in spring of 2016, the Gallagher, J (2016) of Mean sale price development the Detroit Free Press writes that prices in the Downtown and Midtown (north from Downtown) areas have risen to unheard of prices in the city. Median home sales prices, according to Reallcomp II Ltd Real estate Service, have hit $293,000 (note, based on 12 sales in the downtown area) compared to in spring of 2013 when it was noted at $167,900. But it does not give a general image of the city and in the far west, the neighbourhood of Brightmoor reached median sale prices of $15,000. Two of the factors for this rapid rise in prices is the demand for urban downtown living and the lack of listed properties on sale (ibid.).

HOUSING VALUES When comparing data between 2010 and 2015, the estimated value has actually gone down, contrary to the median sale price. In 2010, owner-occupied households counted for a total of ~147,700 units (54.5% of the total occupied), compared to in 2015 when it counted for 126,350 units (49.4%), a decrease of 17% (U.S. Census Bureau 2015c). Looking at the prices below, we can identify that the lowest value brackets have increased, while there is little or negative development in the upper price brackets.

There could be several reasons for this, but for example are the outcomes of the vast demolition plans not yet fully possible to evaluate. It could lead, as stated in the Future City Framework plan, to a higher degree of competition on the market in the greater city of Detroit. And partly due to the bankruptcy in 2013 along with little or no increase in jobs, there has been generally been difficult to increase the property values, with the city’s population still struggling to make ends meet, where 40.3% of the inhabitants today live below the poverty line.

HOME SALES When The Urban Institute (Bai, B. et. al., 2016) started measuring in 2005, about 23,000 home sales were made.

It went down to its lowest amount in 2010 at just around 17,000 before hitting a record high in 2012 at 28,000 sales,

27

an increase by 65% in two years time. The years that followed though, recorded a decrease by first 15% (2013), then 4% (2014) and by 2015 it has decreased by another 20% to about 18,500 sales (ibid.).

through surveying all$50,000property in Detroit, half of$150,000the total $100,000Less than $149,500 stock $50,000 facing foreclosure is occupied already, $199,999 resulting $99,999 in cheap evictions of 500$. But the Detroit Land Bank Authority warns of that the renovation of the structures Estimated housing values are probably significantly more expensive than the listing price.

2015

MORTGAGES Another factor to consider is that the total amount of homeowners with a mortgage has fallen, from 61.5% (90,759 units) in 2010 to 43% of the total owned properties (54,290 units) in 2015 (Bai, B. et. al., 2016). The costs of living are also vastly higher for mortgage owners.

According to The Detroit News (2016), 91% of the on market inventory in 2014 were non-forclosures and 9% as for-closures, changing to 94% and 6% respectively in 2016. Meanwhile it was reported, that in the last 10 years more than 100,000 properties have been foreclosed and an estimated 50,000 as of the beginning of 2016 were in risk of foreclosure within the next three months. Owners who have not paid taxes for the past three years face the risk of foreclosure, with the properties then going up on housing auction to the highest bidder. In 2014, only half of the 28,000 listed houses were sold even if the rest were listed for $500 or less (ibid.). The Detroit Land Bank Authority (2016) which provides the “service” of auctions demands that within a 6-month period, the buyer needs to fulfill certain “property codes”, otherwise it will result in forfeiture of the property. This is one mechanism to halt speculators from leaving properties untouched while removing impacts of blight.

Prashant Gopal (Financial Post 2015), writes that just in 2015 62,000 properties faced foreclosure over unpaid taxes. Many of these are later in the year auctioned out, but as Loveland Technologies (a mapping company) showed

2010

Less than $500

$500$999

$1,000$1,499

Gross rent

GROSS RENT Looking at the gross rent, in 2010 there were 115,888 units paying rent, compared to 2015’s count of 120,767 (U.S. Census Bureau 2015c). An increase of 5%. Looking in detail at the different brackets, we can see that there has been very small changes at all.

And if we look at the gross rent as a percentage of household income, it has also hardly changed whereas in 2010, 57.8% of all households paid more than 35% of their income for housing. In 2015 that number is 58.3% showing that affordable housing is still hard to come by for most (ibid.).

2015

2010

Less than $50,000

$50,000$99,999

Estimated housing values 28

2015

$100,000$149,500

$1,500+

$150,000$199,999

$200,000$499,000

$500,000+

$200 $499

DEMOLITIONS The following map visualize the scale of demolition taking place in Detroit between 2004-2016, based on Demolition Data Lens Detroit, Michigan (City of Detroit 2017a). Over 10,862 demolitions took place, amongst them 3,292 in 2016 (City of Detroit 2017), reflecting the ongoing spatial transformation of the city.

Demolitions 29

DISTRICT PROFILES

30

DOWNTOWN The Downtown district is an eight square kilometer big area with 19,076 inhabitants. It is the smallest in terms of area and population, although while having the highest density with 5.7 people per square mile, implicating a multi-family housing type. The district is comparably young, with the median resident age of 34.2, and the lowest percentage of family households (17%), with only 1.5 average household size. What especially stands out in this district is the high percentage of renters with 90%, it being distinctly above the average, as well as the highest estimated median house or condo value ($144,000).

Zip code

Downtown

48201

48226

8

5

3

19.076

13.049

6.027

5,7

6,507

4,882

17.060

12.273

4.787

Average household size

1,5

1,7

1,3

Percentage of family households

17

23,5

10,5

Median resident age (years)

34,2

32

36,4

Unemployment (%)

12,8

18,3

7,3

Estimated median household income in 2015 ($)

24.921

14.299

35.542

Number of houses and condos

14.071

9.603

4.468

Percentage of renters

90,5

91

90

Median gross rent in 2015 ($)

748

529

966

Land area (sq. km.)

Estimated population in 2015 Population density (people per square mile) Households

Estimated median house or condo value in 2015 ($) Estimated number of vacant forsale houses and condos in 2013 Estimated number of vacant forrent houses and condos in 2013 Median price asked for vacant forsale houses and condos in 2013 ($)

144.100

128.800 159.400

46

16

30

168

70

98

214.570

323.186 105.954 31

GREATER DOWNTOWN The second smallest district, the Greater Downtown, has the lowest population density above all, with only 3.5 people per square mile. At the same time the lowest median gross rent ($608) can be found here, as well as the lowest median household income ($21,000), but an average unemployment rate.

Greater Downtown

48202

48208

48216

23

9

8

6

31.735

16.696

9.327

5.712

3,5

5,019

2,949

2,574

29.395

15.143

8.807

5.445

Average household size

2,20

2

2,2

2,4

Percentage of family households

32,8

27,2

32,9

38,3

Median resident age (years)

36,1

35

37,7

35,7

Unemployment (%)

20,5

22,8

22,7

15,9

Estimated median household income in 2015 ($)

21.183

20.158

19.284

24.107

Number of houses and condos

20.061

11.021

6.063

2.977

Percentage of renters

68

74

69

62

Median gross rent in 2015 ($)

608

607

638

578

58.633

64.400

61.900

49.600

37

16

11

10

107

48

31

28

101.996

101.996

Zip code

Land area (sq. km.)

Estimated population in 2015 Population density (people per square mile) Households

Estimated median house or condo value in 2015 ($) Estimated number of vacant forsale houses and condos in 2013 Estimated number of vacant forrent houses and condos in 2013 Median price asked for vacant forsale houses and condos in 2013 ($) 32

UPPER WOODWARD CORRIDOR The Upper Woodward Corridor is the district with the highest median resident age (38.5). The district has an above average unemployment rate with 26.6%, but at the same time the highest estimated median household income ($27,836). It is important to point out that there are distinct differences within the district: the north-western part with 21.4% unemployed, 10% below the south-eastern area rate and has almost the double house and condo value ($63,000) and a much lower renters percentage than the rest of the district (34%).

Especially, the almost double household income of the north-west area ($37,303) as the south-east area indicates a big difference within the district.

Upper Woodward Corridor

48203

48206

48221

43

21

8

14

83.287

25.027

18.424

39.836

5,4

3,123

5,894

7,307

81.041

24.391

17.699

38.951

Average household size

2,60

2,5

2,6

2,7

Percentage of family households

40,0

40,1

40,1

39,7

Median resident age (years)

38,5

39,6

37,2

38,7

Unemployment (%)

26,6

27,1

31,3

21,4

Estimated median household income in 2015 ($)

27.836

25.027

21.178

37.303

Number of houses and condos

48.810

16.855

13.658

18.297

Percentage of renters

48

56

55

34

Median gross rent in 2015 ($)

716

631

704

812

48.567

38.900

43.000

63.800

54

18

14

22

107

45

27

35

209.898

209.898

Zip code

Land area (sq. km.)

Estimated population in 2015 Population density (people per square mile) Households

Estimated median house or condo value in 2015 ($) Estimated number of vacant forsale houses and condos in 2013 Estimated number of vacant forrent houses and condos in 2013 Median price asked for vacant forsale houses and condos in 2013 ($)

33

SOUTHWEST Looking at the space of the Southwest district, we can indicate a more family oriented area: here we can find the biggest household size (4.9), the second highest percentage of family households (49.4%), as well as the second median resident age (32.1 years).

The reason for this may be found in the second lowest estimated median house or condo value of only $36,867 and at the same time a slightly above average estimated median household income of $25,243.

Zip code

Southwest

48209

48210

48217

37

18

13

6

73.446

34.411

31.557

7.478

4,9

5,092

6,259

3,271

73.333

34.360

31.495

7.478

Average household size

3,10

3,4

3,4

2,5

Percentage of family households

49,4

56,1

56,9

35,2

Median resident age (years)

32,1

30,1

26,8

39,4

Unemployment (%)

22,6

20

23,8

24

Estimated median household income in 2015 ($)

25.243

25.759

25.482

24.488

Number of houses and condos

51.784

34.411

13.435

3.938

Percentage of renters

48

52

50

43

Median gross rent in 2015 ($)

705

628

725

762

36.867

35.700

30.000

44.900

104

17

17

70

112

33

28

51

110.665

110.665

Land area (sq. km.)

Estimated population in 2015 Population density (people per square mile) Households

Estimated median house or condo value in 2015 ($) Estimated number of vacant forsale houses and condos in 2013 Estimated number of vacant forrent houses and condos in 2013 Median price asked for vacant forsale houses and condos in 2013 ($) 34

WESTSIDE The Westside district is very divers due to its size of 123 square miles and the population of 268,437, being the highest in the city. What is very homogeneous throughout the whole district is the household size of 2.7 while the percentages of family households varies between 38.8% and 51%. The data is prevailing around the average of the city, distinct aspects yet are the under average percentage of renters with only 45.6% and the population density of 5.6 being the highest in the city.

Zip code

Westside

48204

48219

48223

48227

48228

48235

48238

123

13

22

16

19

22

16

14

268.437

25.637

48.759

24.122

42.106

52.243

45.705

29.865

5,6

5,115

5,800

3,984

5,591

6,068

7,312

5,535

266.261

25.457

48.148

24.071

41.867

51.939

44.984

29.795

2,7

2,7

2,6

2,6

2,8

2,8

2,6

2,7

Percentage of family households

44,3

38,8

44,9

49,7

44,3

51

41,7

39,7

Median resident age (years)

36,4

38,8

36,9

35

35,9

31,1

39

38

Unemployment (%)

24,5

27,3

27

20,2

20,9

25,7

22,4

28

Estimated median household income in 2015 ($)

26.645

21.415

30.877

32.336

27.361

23.568

28.556

22.402

Number of houses and condos

139.844

16.165

23.654

12.571

22.019

25.585

21.310

18.540

Percentage of renters

45,6

50

42

45

42

48

42

50

Median gross rent in 2015 ($)

795

719

810

784

813

834

873

735

42.771

31.800

46.400

54.000

43.800

31.400

50.400

41.600

126

17

25

19

17

17

19

12

235

25

43

35

32

38

32

30

Land area (sq. km.)

Estimated population in 2015 Population density (people per square mile) Households Average household size

Estimated median house or condo value in 2015 ($) Estimated number of vacant forsale houses and condos in 2013 Estimated number of vacant forrent houses and condos in 2013 Median price asked for vacant forsale houses and condos in 2013 ($)

136.742

159.296 248.091 118,498

100.989 175.216 35

NORTHEAST The Northeast district is next to the Westside district one of the biggest and as well very divers. Yet there are distinct aspects: it has the highest unemployment rate of 27.6% and the highest percentage of family households, 51.1%, with an under average resident age of 33.3 years.

Another aspect is that the Northeast has the second highest gross rent of $776, but at the same time the house or condo value for 2015 is estimated to be the lowest in town at $32,533.

Zip code

Northeast

48205

48211

48212

48213

48224

48234

93

17

11

14

17

15

20

183.833

36.834

6.833

38.329

25.534

41.935

34.368

5,0

5,771

1,631

7,166

3,908

7,312

4,387

180.333

36.590

6.047

37.031

24.913

41.641

34.111

Average household size

2,9

2,8

2,8

3,3

2,8

2,9

2,8

Percentage of family households

51,5

51,4

60,5

53

44,6

53,4

45,9

Median resident age (years)

33,3

32,3

32,5

30,1

37,2

32,3

35,6

Unemployment (%)

27,6

30,9

19,2

20,8

31,9

27,45

35,3

Estimated median household income in 2015 ($)

24.305

28.319

19.417

23.432

21.007

28.688

24.969

Number of houses and condos

88.364

19.008

3.271

15.524

14.120

19.721

16.720

Percentage of renters

47,2

50

55

44

50

42

42

Median gross rent in 2015 ($)

776

872

740

662

696

912

776

34.533

31.900

31.300

34.500

28.200

42.900

38.400

81

20

15

18

16

12

144

31

29

24

25

35

Land area (sq. km.)

Estimated population in 2015 Population density (people per square mile) Households

Estimated median house or condo value in 2015 ($) Estimated number of vacant forsale houses and condos in 2013 Estimated number of vacant forrent houses and condos in 2013 Median price asked for vacant forsale houses and condos in 2013 ($) 36

EAST RIVERFRONT The district East Riverfront is in almost all aspects average in the city context. What sticks out yet is that it has the highest median resident age of 41.1 years as well as that it has the second lowest population density (3.6). Looking into details, we can see that the east area, just at the city border, has a much higher percentage of family (43.3%) households comparing to the rest (27%).

East Riverfront

48207

48214

48215

39

16

13

10

54.985

21.455

20.867

12.663

3,6

3,46

4,153

3,155

53.512

20.755

20.269

12.488

Average household size

2,17

1,8

2,1

2,6

Percentage of family households

32,6

27,4

27

43,3

Median resident age (years)

41,1

42,7

45,2

35,5

Unemployment (%)

22,9

20,8

23

24,9

Estimated median household income in 2015 ($)

23.899

25.156

25.980

20.562

Number of houses and condos

35.103

13.547

14.098

7.458

Percentage of renters

65

76

63

55

Median gross rent in 2015 ($)

709

745

632

751

51.400

60.500

44.900

48.800

93

44

31

18

171

97

44

30

116.804

116.528

Zip code

Land area (sq. km.)

Estimated population in 2015 Population density (people per square mile) Households

Estimated median house or condo value in 2015 ($) Estimated number of vacant forsale houses and condos in 2013 Estimated number of vacant forrent houses and condos in 2013 Median price asked for vacant forsale houses and condos in 2013 ($)

117.080 37

OVERVIEW AND COMPARISON DISTRICTS - DETROIT - MICHIGAN - USA

Zip code

Land area (sq. km.)

East Greater Downtown Riverfront Downtown Northeast West

8

39

23

93

19.076

54.985

31.735

183.833

5,7

3,6

3,5

5,0

17.060

53.512

29.395

180.333

Average household size

1,5

2,17

2,20

2,9

2,

Percentage of family households

17

32,6

32,8

51,5

44

Median resident age (years)

34,2

41,1

36,1

33,3

36

Unemployment (%)

12,8

22,9

20,5

27,6

24

Estimated median household income in 2015 ($)

24.921

23.899

21.183

24.305

26.6

Number of houses and condos

14.071

35.103

20.061

88.364

139.

Percentage of renters

90,5

65

68

47,2

45

Median gross rent in 2015 ($)

748

709

608

776

79

144.100

51.400

58.633

34.533

46

93

37

81

12

168

171

107

144

23

214.570

116.804

101.996

Estimated population in 2015 Population density (people per square mile) Households

Estimated median house or condo value in 2015 ($) Estimated number of vacant forsale houses and condos in 2013 Estimated number of vacant forrent houses and condos in 2013 Median price asked for vacant forsale houses and condos in 2013 ($) 38

12

268.

5,

266.

42.7

136.

Upper ortheast Westside Southwest Woodward Corridor

Detroit

Michigan

U.S.

150.504

9.834.000

93

123

37

43

366

183.833

268.437

73.446

83.287

714.799

5,0

5,6

4,9

5,4

4,8

180.333

266.261

73.333

81.041

700.935

2,9

2,7

3,10

2,60

2,5

51,5

44,3

49,4

40,0

38,2

33,3

36,4

32,1

38,5

27,6

24,5

22,6

24.305

26.645

88.364

9.883.640 308.745.538

2,50

2,60

36,0

39,7

37,3

26,6

22,5

4,7

4,9

25.243

27.836

24.862

51.084

51.771

139.844

51.784

48.810

398.037

47,2

45,6

48

48

59,0

776

795

705

716

722

-

889

34.533

42.771

36.867

48.567

59.553

137.500

178.600

81

126

104

54

541

144

235

112

107

1.044

136.742

110.665

209.898

148.446 39

DATA VISUALIZATION & CONTEXTUALIZATION Through the accumulated data from each neighborhood, based on the information of City-Data Detroit (2017), four maps were developed. Each map combines and takes several characteristics of the neighborhoods into account.

The first map, for example include the number of inhabitants and the age. The second map depicts the population density and the percentage of family households, thereby enabling a holistic impression of the neighborhood‘s social

40

composition and its relation to the adjacent districts. The other two maps focus on prices, values and relate them to household incomes and unemployment rates. The visualization of the data through maps thereby enables the contemplation of soft factors (population, age, density, size) and hard factors (housing value, stock, location) at the same time.

POPULATION IN THAUSANDS MEDIAN RESIDENT AGE POPULATION IN THOUSANDS MEDIAN RESIDENT AGE

38.5 33.3

36.4

41.1 34.2

32.1

Estimated population in 2015

36.1

Median resident age (years)

41

PERCENTAGE OF FAMILY HOUSEHOLDS POPULATION DENSITY PERCENTAGE OF FAMILY HOUSEHOLDS POPULATION DENSITY

5.4

5.6

5.0

3.6 3.5

5.7

4.9

Percentage of family households

42

Population density (people per square mile)

HOUSEHOLD INCOME UNEMPLOYMENT HOUSEHOLD INCOME UNEMPLOYMENT RATE

26.6

27.6

22.9

24.5

12.8

22.6

Estimated median household income in 2015

20.5

Unemployment (%)

43

VALUE OF CONDOS AND HOUSES NUMBER OF VACANT FOR-SALE CONDOS AND HOUSES VALUE OF CONDOS AND HOUSES NUMBER OF VACANT FOR SALE CONDOS AND HOUSES

54

81

126

93

46 37

104

Estimated median house or condo value in 2015

44

Estimated number of vacant forsale houses and condos in 2013

R

EFLECTION

The following analysis and the visualization through maps represent the information we gained out of our research, concluding in which way it could be suitable to invest and especially how to invest both time and money. Collecting the divers data enables to get a broad insight in the current social, economic and political situation of Detroit. This serves as a base to understand the housing market and the various factors influencing it, what kind of housing would be needed and helps to crystallize the main target groups which would be logic to address.

During our research we had on the one side the advantage of having open access to a vast amount of information.

We collected data mainly from the governmental statistic website U.S. Census Bureau and from City-Data Detroit (2017), a website generated by the City of Detroit and the private company Onboard Informatics (2017). The amount of data on the other hand sometimes led to contradictory results by comparing them for example with reports currently represented in media, on the other hand the data is rather comprehensive and based on large amounts.

Although, we want to underline that the collected data should always be regarded in a critical way, emphasizing that all analysis are interpretations of data.

TARGET GROUP Soft factors, like age, percentage of households and their size, combined with the unemployment rate enables us to generate an overall understanding about how the social structure of Detroit looks like. The median resident age of Detroit’s population is 36 years. Looking in detail, a significant number makes up the young generation (under 18), while on the other end an aging population is recognisable. Currently 65.8 % of the housing stock is represented by 1-unit detached houses. Due to changes in the social life cycle, previously composed and based on a traditional family structure, single-family housing becomes obsolete and new alternative housing forms for a new generation seems to be necessary. When the city was at its largest, it also shifted spatially towards a broad low-dense, automobile dominated form, where the blight spread over vast lands, consequently making whole neighbourhoods empty and uninhabited. Indeed the main effort of the city should be to produce workplaces and improve the education system, benefitting and keeping hold of a younger generation, that even with bleak living situations would have possibilities and also opportunities in Detroit.

When reading reports on the housing market both in the U.S. and more closely to Detroit, there is mostly an outlook on the housing values and selling prices often compared to the peak years before the crash in 2007-2008. Indeed is this important, and vital for private investors and the city when trying to find a threshold to reach towards. But as presented, more than half of the citizens have moved in after that period, and even if there are positives to find in the market in recent years (or also in soft factors, e.g. crime rates), the city does not see a rise in either jobs or a downfall in poverty. Main goals for the city must be to reach a stable market but on the terms of the citizens and local business seeking to invest and build up the city again. This cannot solely be done by intensifying housing and investment to concentrated neighbourhoods, or letting prices spiral in the Downtown area, but to find solutions that will steady improve as the living conditions of the citizens improve.

FINDING ALTERNATIVE WAYS OF FINANCING As mentioned above, the city has a quite broad problem with foreclosures due to unpaid taxes from many residents.

Many are forced out of there homes, even if the properties are not subsequently sold. There is a huge challenge for the city to keep its citizens, and even if there are positive stories of many in the city emerging as “home-grown” and cheap refurbishers, there must be a chance of housing mobility in the market. An issue that the city already has raised, is to propose and push for alternative ways for current- and new homeowners to finance their properties and mortgages. But additionally, the city might consider looking into the rental market giving higher incentive for developers to refurbish properties and renting them out for lower sums. The younger generation have presumably little, or no capital to invest in a first home which reduces the social mobility that is important for reigniting the city’s economy and boosting neighbourhoods. ...

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