By Amber Ogden
Residential developments have been popping up all over downtown Detroit, including on the Riverfront and Woodward Avenue, as seen with the new Hudson construction site. With so many Detroit residents in dire need for affordable housing options, the city’s approach, at times, has seemed to focus on incentivizing developments that attract outsiders rather than serving locals.
With housing developments such as The Residences Water Square that recently opened on the Detroit Riverfront, the $4000 (a month) question is: Do new housing developments like these fit the actual needs of current Detroiters?
During Detroit’s bankruptcy proceedings in 2013-2014, Sterling Group acquired the former Joe Louis Arena site. This acquisition was made through a $14.1 million deal with the city involving bond insurer Financial Guaranty Insurance Co. After the Red Wings moved to Little Caesars Arena, Joe Louis Arena was closed in 2017 and demolished in 2020.
“I want people to understand this was not an arm’s length transaction. (The ownership group, the Sterling Group) didn’t need any subsidy to build the project because, in essence, this property came out of bankruptcy,” Chase L. Cantrell, Executive Director of Building Community Value, said. “But because of how they got the land, it’s dangerous for us to forget what happened and then look forward to seeing that there is no affordable housing or pathway for the average Detroiter to live in these units.”
Cities like New York, Chicago, and even Los Angeles offer tax incentives to real estate developers to build luxury apartments priced too high for the average resident. But this is Detroit, a historically known blue-collar, working-class city. Compared to New York and Chicago, Detroit needs more sustainable public infrastructure, such as public transportation, making it less affordable overall. Costs quickly add up for the average family in Detroit. For example, Detroit has some of the highest insurance rates and city taxes in the nation, and often times, the quality of service doesn’t align with the price residents pay.
“Places like New York and Chicago have public infrastructure and public transportation, which makes it easier for people to get around. They have 15-minute neighborhoods with accessible stores, pharmacies, and doctor’s offices. And that is a factor in thinking about price points, too, even if we want to attract people outside of the city to come back to it, given the overall prices of housing and how unaffordable it is nationwide, right? That’s the problem,” Tristan Taylor, a Detroit resident and Detroit Will Breathe Organizer, said.
According to Detroit Future City, the city’s median household income of $36,140 in 2021 was slightly more than half that of the region’s $67,153 — a difference of over $31,000. The cost of housing in Detroit is determined by the regional median income, which is significantly higher than the median income of Detroit. As a result, most Detroit residents are priced out of the more desired housing market simply because they can’t afford it.
“These are price points for a median income, which is half of what is calculated off the market rate based on AMI, the area median income. The problem with that is Detroiter’s median income is half of what the area is basing that on by itself. That leaves Detroiters out of the equation regarding the price point for these apartments,” Taylor said. “Even considering some of the amenities that come with the studios and one two-bedroom apartment, there’s nothing for families. How do you build a viable city if you don’t have those options for the people in the city?”
When considering a viable city, does the city offer affordable and safe environments for residents? For $4000 a month, renters get a high-rise, one-bedroom apartment less than two miles from Southwest Detroit, a part of the city continuously blanketed by ongoing environmental pollutants. The City of Detroit has completed retrofits of Southwest Detroit homes to protect them from the impact of the Gordie Howe Bridge construction, which is set to be completed by fall 2025. The juxtaposition of these two realities, located less than a five-minute drive from community to community, is stark.
The University of Michigan reports that Southwest Detroit has the highest levels of air pollution in Michigan and ranks among the top five percent in the country. It is crucial to prioritize using public funds for initiatives, including transportation, affordable housing, and education, that have a long-lasting and positive impact on the community. Addressing immediate problems with a temporary fix is not enough; an effort must be made to create sustainable solutions that benefit everyone.
“It isn’t an environment where affordable housing is a priority. There have certainly been some preservation efforts. However, regarding new affordable housing, we aren’t seeing the creation of many units. In fact, Bedrock’s current Hudson site has negotiated with the city for affordable housing. But affordable housing doesn’t have to be applied within the Hudson tower, for example, “Cantrell said.
There is ongoing discussion about developments that have historically failed to sustain long-term occupancy in Detroit. There are concerns they will be vacant again in the future. There is a housing crisis, and much of the reasoning behind specific actions is to address this issue. The demand for housing is high, and efforts are being made to encourage people to return to the city.
But at what cost?
“I am concerned about how the city and developers are trying to help grow the city’s population and economy this way. This is the same policy 20 other cities have when they compete for the same crop of people. But what happens when we (Detroiters) have all these empty apartments because the people who could afford them already settled elsewhere outside the city?” Taylor said.
Cantrell says it isn’t a surprise that these luxury developers are testing the boundaries of the housing market this way; it’s an experiment. “They believe they have the client base for these kinds of apartments and understand that they far exceed the median income of Detroiters. The average Detroiter is not the target audience.”
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