I get what you're saying. However, I think that if there were enough demand to fill 10000 apartments, you'd see that reflected in high prices. But we don't really see that. I know that prices have increased, but they really aren't very high. Paying $1300 for an apartment right in the middle of downtown in a brand new / remodeled building might seem expensive for Detroit, but in any other city that would feel relatively normal if not cheap.
I think what is causing hesitation on the part of developers is that just a few new buildings can have a significant % increase on the number of units in downtown. If demand doesn't somehow grow, that's going to result in prices dropping. And as we've seen, prices have only recently gotten high enough where developers are willing to even think about entering the market. This problem is lessened in a place like Minneapolis. If you added 500-1000 apartments to the market, you've increased availability by a mere 1/60th to 1/30th, so there probably won't be an impact on prices. Do that in Detroit and you've increased availability by 1/16 - 1/8. The impact on price would be way larger.
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