Downtown/Midtown Rents "Downtown Detroit rents go through roof"

[JDKeepsmiling]

http://www.detroitnews.com/article/2...text|FRONTPAGE

This article got me thinking...is this the reality on the ground? I am hearing all this talk about how Midtown and Downtown are basically full. Is that people's actual experiances? Are rents rising 10-15% per year?

A second question is when do you think someone will come forward with a major residential development in Downtown?

[French777]

As a soon to be 4th year WSU student, I have lived in Midtown for the previous 3 years, and its amazing what has been happening. I hope to create a detailed map of all the new projects to come online since moving down there. Talking to friends and other students, it appears what is available, is 'Student-Grade' housing, which is fine, for now. Yet, not housing one would live in as a young professional, or there are expensive properties on the other end. It mainly depends on what you desire, if you want a secure parking lot, your rent is going to be much more, yet if you're content being in a building with only on-street parking, you may find some more affordable properties. Rents DO seem to be on the rise though.

[jaytheory]

http://www.detroitnews.com/article/2...text|FRONTPAGE

This article got me thinking...is this the reality on the ground? I am hearing all this talk about how Midtown and Downtown are basically full. Is that people's actual experiances? Are rents rising 10-15% per year?

A second question is when do you think someone will come forward with a major residential development in Downtown?

Yes, I know this is real. here are a few examples. I purchased a foreclosure recently in midtown. there were more than 10 bids on the property many of which above offer. A friend of mine had their home appraised at 150 last year, relisted this year for 20k more this year and had 15+ offers in a few hours. it went for more 170k+. Before we tried to buy we looked at a rental on Willis near Cass. the rent was 1200 for a 900 sq ft flat [[really an aprtment) with decent amenities no covered parking no AC. there were 30 people in line to look at it and it rented for 1325.

Another friend of mine broke her lease at the Broderick because she wanted to move back to RO near her friends. she was not charge a lease breaking fee and they rented it out that day for 300 more [[from what she says).

it is real. the thing is can we keep it going and get some more online before the tax incentives go away, and or, can the owners make enough money now. to be able to pay the taxes when that comes. becasue some of these buildings have been foreclosing...the Kales is one

[DTFellow]

I can attest to what French777 says, as a downtown resident, rents are absolutely going up. I've lived in one of the downtown high-rises for the last three years as I attended law school in Midtown. When I moved down, in Summer 2010, downtown rents were really quite low, to the point that my roommate and I were able to get a spot with a killer view in a secure building with secure garage parking for about the same price per sq. foot that we would pay for a nice 4 or 5 bedroom "college apartment" in sleepy Mount Pleasant, MI. As one can imagine, this was shocking [[and awesome) to us. To put into context, rents were already increasing in 2010, our building was weeks away from putting in a new floating market rent-setting process from what had been a flat/base rate computation [[lucky us, we got in under the lowest level).

This last month I inquired about re-leasing the same unit I've had [[building is under renovations, so it would be substantially upgraded with new appliances, finishes, paint, carpet, etc.) and the quoted price is roughly 50% higher than the initial rent in June 2010. The per square footage cost has gone from about $0.85 to $1.26 sq/ft. This is mind-blowing, and has made me have to reconsider retaining the unit.

If rentals continue going up, this building will be entirely young professionals soon, and the elderly and regular folks without vouchers or assistance of some kind will likely be out, the students will be out, and many of the other average folks will be out. It is exciting and frightening at the same time. Thankfully, I start my new job downtown in August, so I suppose I'll be in the new "target demographic" for my building for next year, at least.

If it is really the case that new development cannot happen without $2.00 sq/ft rates, we likely have a few years to go, but if there are no additional units built in the next couple of years, I wouldn't be surprised to continue to see rents skyrocket toward that figure.

[TexasT]

http://www.detroitnews.com/article/2...text|FRONTPAGE

This article got me thinking...is this the reality on the ground? I am hearing all this talk about how Midtown and Downtown are basically full. Is that people's actual experiances? Are rents rising 10-15% per year?

When my husband and I [[both professionals) moved here last summer, we couldn't find a place to rent. We had a month of lead time but everything had long waiting lists. We wound up buying instead [[and got outbid on the first three houses). Being a life-long city renter, I wasn't ready to buy but in the long run, I'm glad we did. I still miss downtown loft living but this isn't so bad.

But yeah, the "basically full" thing was true in our experience.

[313WX]

http://www.detroitnews.com/article/2...text|FRONTPAGE

This article got me thinking...is this the reality on the ground? I am hearing all this talk about how Midtown and Downtown are basically full. Is that people's actual experiances? Are rents rising 10-15% per year?

A second question is when do you think someone will come forward with a major residential development in Downtown?

If you read the article, it says the increase in prices is mostly attributed to the fact that the owners can barely afford to pay the bills.

While the increase in prices at face value seems like a good thing, the actual reason behind the price increases is not something to get excited about.

[Honky Tonk]

If you read the article, it says the increase in prices is mostly attributed to the fact that the owners can barely afford to pay the bills.

While the increase in prices at face value seems like a good thing, the actual reason behind the price increases is not something to get excited about.

The whole scenario reminds me of the housing bubble in 2007.

[jaytheory]

there is one difference with the housing bubble and the "rental bubble'. when the foreclsure hit the building owners, they will get snapped up quickly by other investors who will not ahve to do build out and have a lower borrowing cost. this may put a blip in the market from the buying side but will then see another crop of developments come online during the blip.


if people just think about what they are doing they would realize that detroit [[in some cases) is one of the best values for the money in the country. ill take my 50 dolalrs a sq fot to live in detroit over 1000 sq ft to live in brooklyn.

and things are definitely changing. if you lvie in the burbs and have kids under five or are empty nesters or single or child free. come move to the city. your quality of life will actually be better than the burbs. you will see some blight. you will see some homeless people and they might ask your for change but you will have a good time,, were you can walk to a bar, walk to a museum, wlak toa casino, walk to a game all within 10 minutes walking [[3 on a bike of each other).

leaving DC and coming back home was one of the best decisions I ever made.

[JDKeepsmiling]

The whole scenario reminds me of the housing bubble in 2007.

I do not think these are the same at all. This is rental rates increasing in a resurgent downtown. The housing bubble was people qualifying for loans that they should not have to finance purchases of homes that were traditioanlly out of their reach. These could not bemore different.

[Eber Brock Ward]

leaving DC and coming back home was one of the best decisions I ever made.

This. But substitute Chicago for DC in my case.

As it approaches $2/ft^2 though, I wonder if it's no longer such a bargain. I paid $1132 for about 700 ft^2 in Streeterville [[80's building) and $1700 for 800 ft^2 in the Gold Coast/River North [[2000's building) area when I didn't live in the neighborhoods. I find it hard to believe that we, here, can pull $2+, but I'm hopeful.

[corktownyuppie]

If you read the article, it says the increase in prices is mostly attributed to the fact that the owners can barely afford to pay the bills.

While the increase in prices at face value seems like a good thing, the actual reason behind the price increases is not something to get excited about.

But the reason for the rent increase is irrelevant, what's more important is that the market supports it. If I own a furniture store and the price of wood doubles, of course I will have to increase my prices. But that doesn't mean that people will be willing to pay the mark-up.

The fact that prices are going up AND that people are willing to pay this is monumental. When rents hit $2.00 per square foot, you will see almost every vacant building in Greater Downtown see development interest. And then adjacent neighborhoods will start to see revival as overflow from people [[like myself) who are probably not willing to pay $2.00 psf will start to flood North Corktown, New Center, West Village, and Woodbridge.

If this continues, in 5 years, there will not be a vacant or blighted building within 5 miles of the city center.

[hybridy]

A second question is when do you think someone will come forward with a major residential development in Downtown?

to name a few, among many others:

-borderick
-david whitney
-auburn
-milner aka 'the ashley'
-south university village [[phase 2)
-united way building
-capitol park Building
-new center [[628 Delaware, 59, 69, 90, 93, 100 and 112 Seward)
-palmer park [[sarasota, la vogue, seville, palmer lodge)

[Hypestyles]

hopefully housing options can broaden in the outlying neighborhoods and be made more attractive.

[4V4DMD]

Yup, what else is new? This has been going on. Supply is lagging behind demand.

[DetroitPlanner]

to name a few, among many others:

-borderick
-david whitney
-auburn
-milner aka 'the ashley'
-south university village [[phase 2)
-united way building
-capitol park Building
-new center [[628 Delaware, 59, 69, 90, 93, 100 and 112 Seward)
-palmer park [[sarasota, la vogue, seville, palmer lodge)

Nice try, but not exactly all of these are downtown. The United Way building is going to be offices, not sure if there is a residential component.

If you can adjust your scope to over the last couple of decades you can add quite a bit to the list including the Riverfront Towers, Millender Center, Trolley Plaza, Harbortown, and Stroh's. These are all substantial residential developments.

I am not discounting any of the projects that you have named, but if we include all of these we should also include places like Gardenview, and a whole slew of other buildings in the WSU area. I guess we all have different definitions. You see downtown as being much larger than I do. My frame of reference is much longer... I guess I am getting old!

[Spartan]

Nice try, but not exactly all of these are downtown. The United Way building is going to be offices, not sure if there is a residential component.

If you can adjust your scope to over the last couple of decades you can add quite a bit to the list including the Riverfront Towers, Millender Center, Trolley Plaza, Harbortown, and Stroh's. These are all substantial residential developments.

I am not discounting any of the projects that you have named, but if we include all of these we should also include places like Gardenview, and a whole slew of other buildings in the WSU area. I guess we all have different definitions. You see downtown as being much larger than I do. My frame of reference is much longer... I guess I am getting old!

United Way Building has residential. I believe the Archdiocese is moving into the first 5 floors, with ~50 units above. So downtown, just in the last few years [[off the top of my head) you have:

past:
Broderick

current/planned:
Claridge House [[leasing)
Security Trust Lofts [[leasing)
The Ashley
United Way
Capitol Park
David Whitney
Lofts of Merchant Row [[2 new buildings)
Vinton Building

[gthomas]

United Way Building has residential. I believe the Archdiocese is moving into the first 5 floors, with ~50 units above. So downtown, just in the last few years [[off the top of my head) you have:

past:
Broderick

current/planned:
Claridge House [[leasing)
Security Trust Lofts [[leasing)
The Ashley
United Way
Capitol Park
David Whitney
Lofts of Merchant Row [[2 new buildings)
Vinton Building

Well once these rehabbed projects are done we need to focus on "NEW" construction, not everyone wants a "historic" turned modern residential living option. I know alot of folks who wont move to Detroit because of lack of "New" construction. I love all the residential projects downtown and midtown... soon to happen, no doubt. I hope we focus soon on building residential modern skyscrapers with balconies. It's needed here, believe it or not..

[hybridy]

Nice try, but not exactly all of these are downtown. The United Way building is going to be offices, not sure if there is a residential component.

If you can adjust your scope to over the last couple of decades you can add quite a bit to the list including the Riverfront Towers, Millender Center, Trolley Plaza, Harbortown, and Stroh's. These are all substantial residential developments.

I am not discounting any of the projects that you have named, but if we include all of these we should also include places like Gardenview, and a whole slew of other buildings in the WSU area. I guess we all have different definitions. You see downtown as being much larger than I do. My frame of reference is much longer... I guess I am getting old!

details details. what i would consider to be a 'high profile' downtown residential development would be one of these. surely one has to be in the pipeline

-book tower
-hudson block redevelopment
-anything new on the riverfront

[TexasT]

details details. what i would consider to be a 'high profile' downtown residential development would be one of these. surely one has to be in the pipeline

-book tower
-hudson block redevelopment
-anything new on the riverfront

I know of at least one downtown that hasn't hit news yet. Not the Book Tower, sadly.

[hathorlive]

My friend looked last year to rent from 1300 to 3000. She found waiting lists and more waiting lists even at the high end. So yes, Detroit is experiencing a downtown housing shortage.

I'm moving the city next month and while I had a more modest budget of 1500/month, I didn't find a place that I liked with the higher end finishes that would accept a dog. I'll be moving into my friends combined condo unit [[two units combined into one) and pay her a nice chunk of rent.

People think I'm crazy when I say that you can shell out 2k and still not have a rental in the city.

[Spartan]

I know of at least one downtown that hasn't hit news yet. Not the Book Tower, sadly.

Renovation?

[michimoby]

I'm going to play devil's advocate here.

Rent increases are a signal to knowledgable people that rentals are scarce. It's viewed as a sign of growth and development.

However, for someone on the outside pondering a move to Detroit, it may have the opposite effect.

Numerous people here in NYC, when I tell them that I used to live in Detroit, respond by stating how "affordable" it must be to live there.

Then I tell them that I'm actually only paying an extra $250 per month for my [[albeit smaller) Brooklyn apartment, but with no need for a car, it's actually more affordable. And this is Williamsburg we're talking about, not an outer neighborhood.

So is cannibalization of the suburbs really what Detroit needs? It's part of the solution, but the draw for out-of-staters to move to Detroit will decline as affordability is no longer a viable option in the rental market.

[Eber Brock Ward]

There are plenty of lower-market rentals available, moby.

The correct comparison to Williamsburg is more something like sharing a Woodbridge house [[$300ish a room) than the Broderick or something, which is most comparable to a high-rise in Manhattan. Still apples and oranges, but not quite as bad of a comparison.

[hathorlive]

As someone who made the decision to move, the rents were not cheap but what is worse than rent is car insurance and income tax. Much higher than other cities I looked at. What is up with car insurance in this area?

[michimoby]

There are plenty of lower-market rentals available, moby.

The correct comparison to Williamsburg is more something like sharing a Woodbridge house [[$300ish a room) than the Broderick or something, which is most comparable to a high-rise in Manhattan. Still apples and oranges, but not quite as bad of a comparison.

By amenities and size of the apartment, Eber, sure.

But regarding amenities and local retail establishments, walkability...the only fair comparisons with W'burg are Midtown, Downtown, and Corktown.