Discuss Detroit Archives - Beginning January 2007 Freep Article: Faith in urban living is building Previous Next
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Thejesus
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Username: Thejesus

Post Number: 746
Registered: 06-2006
Posted on Sunday, March 18, 2007 - 1:58 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

March 18, 2007

BY JOHN GALLAGHER

FREE PRESS BUSINESS WRITER

During Michigan's current real estate downturn, the long-beleaguered city of Detroit has provided a rare and unexpected bright spot.

Julie Fielek, who founded her family-owned construction business 22 years ago building custom homes in far-suburban Livingston County, has been working in the city for the last few years. That work has kept her company afloat.

"I wake up every morning and say, 'Thank God for Detroit,' " she said last week on the site of Woodbridge Estates, a development of single-family houses and townhomes near Wayne State University.

For decades, Detroit was known more for population flight and abandoned homes than for new construction. Today, the Detroit market is keeping some home builders and real-estate agents in business.

Sales of existing houses were up 6% in Detroit last year, compared with a drop of 14% for all of Michigan and declines of 20% or more in Oakland, Monroe and Livingston counties.

New residential construction in the city, meanwhile, is at its highest point in more than 30 years. New permits for single-family construction are more than 10 times higher than a decade ago, while the total for southeast Michigan as a whole is down more than 60% over the same period. The city of Detroit led the seven-county metro region in new residential construction in 2006, the regional planning group SEMCOG reported Friday.

Detroit issued 739 permits for new single-family houses, townhouses and multifamily units, the most of any community in the region.

The reasons for Detroit's emergence are complex. Builders like Fielek mostly attribute the upbeat market to a desire for urban living. That trend remade downtowns from Seattle to Baltimore during the last 25 years and has finally arrived in Detroit and suburbs like Royal Oak and Birmingham.

Builders say their typical customers are empty nesters and young professionals and other people who want to live, work, shop and be entertained in a pedestrian-friendly area.

"Everybody wants walkability," said Herb Strather, a Detroit-based developer and partner in Woodbridge Estates.

Stephen Taglione, a partner in Abbey Homes, a Bingham Farms company that is building residential units in Detroit's St. Anne's Gate project in Mexicantown, agrees.

"There's a growing segment of the market that wants that in-town lifestyle," he said.

Believing in urban living

Urban living certainly attracted C. Morgan Houston and her husband, Lorenzo, who paid about $300,000 for a home in Woodbridge Estates more than a year ago.

"We are two minutes from everything that's happening in Detroit," she said. "We just came from the DSO the other night. We go to the different theaters, hot restaurants all up and down. It is great. My feet don't even have time to hurt."

Michael Dunne, a Seattle-based investor, said Detroit's somewhat belated entry into the urban-living trend enticed him to bankroll several projects in the city done by Detroit developer Dwight Belyue, including the @water Lofts condominium project expected to break ground on the east riverfront in the spring.

"I saw it in Seattle in the '80s, and I thought the developers were crazy," Belyue said last week. "Detroit may be the last big city to go through that, but it's just following the country. Having seen it, I'm a believer."

To meet this demand, builders have provided new niche products, such as high-end condos at the Book-Cadillac Hotel. Moreover, the houses Fielek is building in Woodbridge Estates offer more high-end finishes and amenities than the lower-priced product previously offered in the city. Her units range from about $180,000 to almost $400,000.

Trend changes in big way

Tax abatements and other subsidies that support developments in the city make them more affordable. About 80% of all certifications for Neighborhood Enterprise Zone tax abatements in Michigan are for projects in Detroit.

Then there is the pent-up demand. Having built out Detroit to its borders in the 1950s and 1960s, homebuilders left the city for 30 years to concentrate on the suburbs. From 1985 to 1990, fewer than 10 permits for new single-family houses were issued in the city.

That's changing in a big way. Homebuilders pulled 461 permits for new single-family houses in Detroit last year, the highest total since 1971. Most projects sell out at a brisk pace.

"Demand is twice the supply right now," said Strather, the Detroit-based developer.

Of course, building in the city comes with challenges not found in suburban cornfields.

The Woodbridge Estates project, with streets named for Motown music stars, replaced the old Jeffries housing project, which already had been built atop previous construction. Digging basements for the new houses required clearing out generations of debris, including brick water mains from the 19th Century.

"The first basement we dug," Fielek said, "I was out of town, and my son Matt called and said, 'Well, we're not in Kansas anymore.' "





http://freep.com/apps/pbcs.dll/article?AID=/20070318/BUSINESS04/703180650
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Eric
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Username: Eric

Post Number: 711
Registered: 11-2004
Posted on Sunday, March 18, 2007 - 6:59 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

While Detroit housing numbers are small compared to other major cities, the turn around over the last ten years is amazing.
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Rhymeswithrawk
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Username: Rhymeswithrawk

Post Number: 446
Registered: 11-2005
Posted on Monday, March 19, 2007 - 12:53 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

The most surprising - and encouraging - piece of the article:

Sales of existing houses were up 6% in Detroit last year, compared with a drop of 14% for all of Michigan and declines of 20% or more in Oakland, Monroe and Livingston counties.

"New residential construction in the city, meanwhile, is at its highest point in more than 30 years. New permits for single-family construction are more than 10 times higher than a decade ago, while the total for southeast Michigan as a whole is down more than 60% over the same period.
The city of Detroit led the seven-county metro region in new residential construction in 2006, the regional planning group SEMCOG reported Friday.
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Yelloweyes
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Username: Yelloweyes

Post Number: 102
Registered: 02-2007
Posted on Monday, March 19, 2007 - 8:05 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Doesn't this make it two years in arow now that the D has led the region in housing permits?

With so much vacant land close to downtown/midtown/wayne state, I have to believe the trend will continue.

This brings me to this question that maybe some of the brilliant people on this forum can help me with.
If there is all this new housing and real state boom in Detroit, then how can the population continue to decrease? Any 2010 census predictions?
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Apbest
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Username: Apbest

Post Number: 487
Registered: 03-2006
Posted on Monday, March 19, 2007 - 8:13 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

1)New construction was so far in the dump in the rest of the region these past few years while detroit became a more hospitable environment for new construction (ie tax credits and such).

2)There also seems to be an increasing trend in single family income restricted housing construction. Examples are evident throughout southwest Detroit, some of north corktown, and the near east side.

3) That combined with the growing trend towards urban living and large amounts of construction downtown, where alot of these permits are coming from (btw downtown actually IS increasing in residents from new urban dwellers even when you subtract those traditional families that have moved out of the core area), means that the city's new construction permits are on an upward trend.

When you think about how damn big the city is compared to the rest of the metro region (roughly 20%) then it makes sense.

I think a clear distinction that needs to be made is that there is no direct relationship, positive or negative, between population gain/losses and new housing construction permits, though they may have at least SOME relationship.

(Message edited by apbest on March 19, 2007)

(Message edited by apbest on March 19, 2007)
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Royce
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Username: Royce

Post Number: 2127
Registered: 07-2004
Posted on Monday, March 19, 2007 - 10:24 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

The new homes being built in Woodbridge Estates look like crap. And to think these new homes are right next to $300,000 homes.
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Charlottepaul
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Username: Charlottepaul

Post Number: 693
Registered: 10-2006
Posted on Monday, March 19, 2007 - 10:30 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Keep in mind Royce that parts of Woodbridge are an old housing project. While I am not making an excuse for cheap construction, I do believe that many occupants in that area have some sort of subsidized rent. That alone usual lends itself to less quality construction.
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Rhymeswithrawk
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Username: Rhymeswithrawk

Post Number: 457
Registered: 11-2005
Posted on Monday, March 19, 2007 - 10:32 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

The new homes being built in Woodbridge Estates look like crap. And to think these new homes are right next to $300,000 homes.

I'm sorry, would you prefer more abandoned buildings or the old projects? ANY new and nice-looking homes in Detroit are welcome, in my opinion.
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Mackinaw
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Username: Mackinaw

Post Number: 2583
Registered: 02-2005
Posted on Monday, March 19, 2007 - 10:37 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Those new houses use the standard, crappy materials of most new houses, but, it is not the worst new development in the city because the homes are fairly close together, and most of the streetscape flows into the rest of the city. Having said this, WTF is with the naming of those streets? So tacky. Also, while I won't bash investment in the inner city for very long, why are homes with this sort of core-city location all single-family detached? This is the place for mid-rises and rowhouses.

I hope that these new houses age well and eventually blend in, but I'm not holding my breath.
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Royce
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Username: Royce

Post Number: 2162
Registered: 07-2004
Posted on Wednesday, April 04, 2007 - 2:21 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Rhymeswithrawk, the homes I'm referring to have no picture of bay window in the front, are probably less than 1300 square feet, and are right next to $300,000 homes with 2000+ square feet. I know this was a former housing project (technically it still is) and these latest homes will no doubt be subsidized, but did they have to build them next to the really nice homes? Could they not have had a block to themselves? Next time I'm in the area I'll get pictures.
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Royce
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Username: Royce

Post Number: 2163
Registered: 07-2004
Posted on Wednesday, April 04, 2007 - 2:30 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Mackinaw, look around Detroit, you're not going to find many areas with row houses. This is the midwest, not the east coast. I agree that certain areas of the city need a higher density of people, but the city has to compete with the desires of suburban living, even from those who live right here in the city. Therefore, if it's not a townhouse with parking in the back, then the next best thing is a house with a one or two car garage. That's what the people want, an attached garage.
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Danindc
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Username: Danindc

Post Number: 2301
Registered: 10-2003
Posted on Wednesday, April 04, 2007 - 11:10 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

quote:

Mackinaw, look around Detroit, you're not going to find many areas with row houses. This is the midwest, not the east coast. I agree that certain areas of the city need a higher density of people, but the city has to compete with the desires of suburban living, even from those who live right here in the city. Therefore, if it's not a townhouse with parking in the back, then the next best thing is a house with a one or two car garage. That's what the people want, an attached garage.



The suburban-oriented market is already overserved in SE Michigan. Why are you so afraid of putting other housing options out there? Didn't Detroit used to have rowhouses in the 19th century, before they were all demolished? Urbanites aren't going to move to Detroit if their sole housing option is the same damn thing they can get in Troy.
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Royce
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Username: Royce

Post Number: 2166
Registered: 07-2004
Posted on Wednesday, April 04, 2007 - 7:30 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Danindc, other housing options? That's why the conversion of old office buildings into lofts in downtown Detroit is all the rage. Remember, Detroit has a history of being a city made up of single family homes. Detroit is not like the Northeast. Row houses exist in very few places in Detroit. Some of the new condo developments are essentially new row houses, but a lot of people here in Michigan like having windows on all four sides of their residences. I know I'm one of them, unless I can get a corner row house to at least get three sides.

Danindc, density in Detroit is not an issue any more. There's more than enough room. Even though I can't stand the look of one Detroit development because it looks too suburban, Jefferson Village by Crosswinds Communities has built a number of homes for residents who don't mind the suburban look right here in the city.

In some older Detroit neighborhoods, particularly on the eastside, some homes are two to four feet from each other. That distance is a major issue if there is a fire in one. As a kid I remember the house next to us caught fire and spread to ours, coming through the kitchen window. Fortunately for my family, the fire did not spread past that point and the family home still stands. However, my mother was always worried about that happening again, especially when the house next door went vacant, and it did catch on fire again but the intensity was much lower that it didn't have time to spread. Because of things like this, and there are other reasons like having some privacy, many people want a lot more distance between their house and the one next door, even if it's just a drive way that separates them.

I know people in DC, Philly, or Baltimore wouldn't know what to do with themselves if they saw how much space and greenery Detroit has in the heart of the city. Now, I realize not all of the greenery is good(fields of vacant lots), but at least homeowners in Detroit actually have a lawn to cut in the front of their homes and a park to go to, especially on the eastside. Many residents is the cities I mentioned above can't say that. Well, at least they have less lawn care issues.

(Message edited by royce on April 04, 2007)

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