May 03, 2018

Housing Trends

Detroit: Where Dilapidation Meets Redevelopment

The streets of Detroit mimic those of Bucharest combining the preserved architecture of the late-19th century with contemporary redevelopment and pockets of dilapidation. Driving down Detroit’s 21-mile Woodward Ave, it is almost difficult to register everything you are taking in. You see the historic (and unused) home of the Model T on one side, crumbling buildings on the other, and magnificent places of worship along the way. Once America’s great city, Detroit has struggled with poverty, corruption, cronyism, and bad politics. It even filed for bankruptcy back in 2013. But, times are changing for Detroit. Developers and visionaries are working to revitalize the market and attract interest from across the country and beyond. Our Director of Economic Research, Ali Wolf, along with Vice President of Advisory, Adam McAbee, went on the “Building Density In Detroit’s Suburbs” tour provided by ULI during the Spring Meeting and outlined their findings below.

Detroit CBSA stats at a glance, powered by Zonda:

  • 43 active builders working on 214 active projects; 43% of the activity is concentrated in Oakland County
  • 2,675 contract sales over the last twelve months
  • New home closing prices average $240,000, which means 71% of households can afford the median priced new home

Creative use of space. While the leaders in Detroit’s suburb of Birmingham (a community located north of downtown with a population of 20,000) understand the needs of their residents to have a sense of belonging in the community, they also know the city has basic land restrictions. One way they’ve combated this is to allow restaurants to rent parking spaces from April to November to create outdoor eating spaces. If you look closely at the bottom left of the below picture, you’ll see the parking lines.

Creating soul in the new. Throughout the tour, outsiders reflected on how charming the city feels given its history. While many of the buildings are historic, some just have the appearance of being old. In some cases, developers bucked the contemporary trend and intentionally designed the exterior elevations of the new buildings to look Parisian or industrial.

Planning for the future. Detroit is, without question, an auto-dependent city. After all, it’s home to the Big Three automakers. With technology advancing rapidly, however, local developers don’t want to get in trouble down the line. We learned about a proposed mixed-use building with ground-floor retail, micro units (yes, even in Detroit!), and parking that the architect designed so it could easily be converted if/when self-driving cars take off.

Give them something to talk about. Just like the ULI Fall Meeting in Los Angeles last October, the consumer experience kept creeping into the conversation. The developer and mall owner of the luxury retail center, The Somerset Collection, acknowledged that there’s undoubtedly competition from online retail, but it can never take away from good experiences and great customer service on-the-ground. The shopping mall partnered with Happy Returns to fix the pain points of online shopping. Shoppers unsatisfied with their online purchase can head to the “return bar” at the mall where the employee will box up and return the item for you to participating stores. Beyond the ease of return, you’ll receive a $25 gift card to your favorite (partnered) store to help you find something you do like.

We work with specialists across the country to address the changing needs of both cities and consumers. Please contact us to discuss how we can help with your next development.

Ali WolfDirector of Economic Research
EMAIL ALI  |  ALI’S PROFILE 

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