Downtown Rents

**DetroiterOnTheWestCoast** · January-26-14, 11:40 PM

I did not see that anyone had linked to this interesting article on rents in downtown and midtown. Will we finally see more construction, as rents continue to "soar"? It sure seems like some projects such as those in Capitol Park should be further along.

http://www.freep.com/article/2014012...dtown-Corktown

One of my first reactions was that people here in SF would kill for these rates...

**Spartan** · January-27-14, 12:09 AM

We already have seen "more construction" over the last few years with projects on the way. Broderick, The Auburn and other in Midtown. Then you have David Whitney and Forest Arms on the way, among others that haven't seen the work quite yet [[like those in Capitol Park). I'm not sure we'll see significant increase in projects in the downtown area, it's already growing at a decent pace and an increase may not be economical to developers.

**Gistok** · January-27-14, 12:29 AM

Originally Posted by Spartan

I'm not sure we'll see significant increase in projects in the downtown area, it's already growing at a decent pace and an increase may not be economical to developers.

It may not be all that good for Detroit either, if some of these folks move to the suburbs, as has been mentioned in the link...

Maybe Mayor Duggan will get behind the 8 ball and try to grow the number of "liveable" areas around the city center...

**mwilbert** · January-27-14, 12:46 AM

As soon as rents are high enough to pay for new development, the problem will solve itself, as there is no shortage of available land. That is when you will probably see Brush Park rapidly refill. The problem occurs because at the current time, rising rents are making subsidized development, of which there is a limited supply, more profitable, but yet not making unsubsidized development possible, so the rising rents aren't generating more housing supply.

Until that happens, the only thing you can do is what Gistok suggested, which is to try to encourage the overflow into some of the immediately adjacent areas, unfortunately a lot of those either don't have a much housing or are cut off by freeways or other barriers. Maybe the overflow could start heading toward Virginia Park or Mexicantown, or over toward Lafayette Park?

**KJ5** · January-27-14, 08:31 AM

Don't forget the North End, mwilbert. That's where I'm at now. I work in Midtown, but wouldn't be able to afford to live there. No need to put soar in quotes for this working stiff. This ain't Frisco.

**DetroiterOnTheWestCoast** · January-27-14, 12:15 PM

It just seems strange to me to have "overflow" to outlying areas when people prefer to live downtown and in midtown, and there are still many vacant buildings and empty parcels. While there has certainly been a lot of development, downtown and midtown are still quite sparsely populated. What a shame that the Statler is not still standing and available for rehab.

And please, never use the term "Frisco"....

**Gannon** · January-27-14, 12:19 PM

They are tearing down the Brewsters much too soon, if only they'd have waited another six months...some investor would've seen their viability.

But watch as Danny finds a way to turn that jail fiasco into oddly secure apartments. If he has a brain, he's already on it.

**Gannon** · January-27-14, 12:21 PM

Originally Posted by DetroiterOnTheWestCoast

And please, never use the term "Frisco"....

LOL, I believe it is proper when used derogatorily...

**bailey** · January-27-14, 12:26 PM

Originally Posted by DetroiterOnTheWestCoast

It just seems strange to me to have "overflow" to outlying areas when people prefer to live downtown and in midtown, and there are still many vacant buildings and empty parcels. While there has certainly been a lot of development, downtown and midtown are still quite sparsely populated. What a shame that the Statler is not still standing and available for rehab.

...which points out the ridiculous hyperbole and sillyness of this article. Rents are "high" in certain microscopic [[relatively) areas of 135 square miles and the entire metro region.

NOBODY is begin "priced out of the market" they are being priced out of one or two successful buildings or areas.. and the only reason for that is because there is just so little available in "livable" areas. The owners of the broderick, kales, lofts on Woodward..etc. are fucking ecstatic that the Statler isn't there and that no one is doing anything with Capitol Park and the city's largest private landlords are slum lords and speculators.

"priced out of the market" means you need to leave Detroit to find something affordable...not one of these people needs to leave Detroit -home of the 50 dollar house...many within sight of the place they are being "priced out" of- what these people are complaining about is that they can't afford to live in the building they want to live in.

**Gannon** · January-27-14, 12:28 PM

there are roughly thirty senior citizens who would like to have a word with ol' Danny-boy about their rushed evictions...I'll dig up what I can find and report back...

**mikeg19** · January-27-14, 01:10 PM

If the article is correct, then we are approaching that $2.00 per sq foot that so many people have commented on that Detroit needs to get to before new developments begin to take off around here without subsides. I view this as an absolute positive. And lets be honest with ourselves, the rent in the city, even after these price hikes by landlords, is still cheap by comparison to many other city centers.

I think what we need to realize is that if we want a vibrant downtown with walk-able attractions, restaurants, venues, etc, pricing for housing and office space will not stay the same. It will go up. That's just how economics work. If you want to bitch and moan about not being able to rent a 1,800ft condo for $1000 a month anymore, go ahead. But try to be realistic here. The more desirable a place to live is, the higher cost of living. Gone are the days of $750 downtown rents in skyscrapers.

**Chinman** · January-27-14, 01:26 PM

Most of the Lafeyette Park area is Co-Ops, so rents don't matter. We are a quiet area with nice parks, access to freeways, shopping is not far and at most...Safe as any Suburb.

**Honky Tonk** · January-27-14, 01:39 PM

Originally Posted by Chinman

...Safe as any Suburb.

Not quite.

**TTime** · January-27-14, 01:55 PM

I always find it funny when people bring up the price of rentals in cities like San Francisco, New York, Chicago and other world class cities in these discussions about Detroit. Isn't is more appropriate to bring up comparable cities like Cleveland, Milwaukee, Columbus, Toledo and Grand Rapids? I was also going to comment on the rising rent but it seems Bailey has summed it up perfectly.

**mikeg19** · January-27-14, 02:04 PM

Originally Posted by TTime

I always find it funny when people bring up the price of rentals in cities like San Francisco, New York, Chicago and other world class cities in these discussions about Detroit. Isn't is more appropriate to bring up comparable cities like Cleveland, Milwaukee, Columbus, Toledo and Grand Rapids? I was also going to comment on the rising rent but it seems Bailey has summed it up perfectly.

Well lets be accurate. Detroit was known as the Paris of the West.......

**mwilbert** · January-27-14, 02:13 PM

Originally Posted by DetroiterOnTheWestCoast

It just seems strange to me to have "overflow" to outlying areas when people prefer to live downtown and in midtown, and there are still many vacant buildings and empty parcels.

Again, this seemingly odd situation exists because the current rents don't reflect current construction costs, either because the units are old or because their rehab was subsidized. The rents go up because there is a shortage of units in the specific areas under discussion, but until they go up enough to justify building new units, no new unsubsidized units are built, and the demand has to be channeled outward toward other existing buildings.

**Chinman** · January-27-14, 02:39 PM

show me your proof of lack of safety in Lafayette Park area. I have lived here since 2007. no problems. Are you one of those that says on the news " nothing ever happens like that in my neighborhood" as channel 4 is in Novi?

**mikeg19** · January-27-14, 02:48 PM

Originally Posted by Chinman

show me your proof of lack of safety in Lafayette Park area. I have lived here since 2007. no problems. Are you one of those that says on the news " nothing ever happens like that in my neighborhood" as channel 4 is in Novi?

While there have been shootings and robberies in the area, statistically speaking, Lafayette Park Neighborhood is safer than 93% of the rest of Detroit.

http://www.areavibes.com/detroit-mi/...te+park/crime/

**detroithealth** · January-27-14, 03:48 PM

Originally Posted by Gannon

They are tearing down the Brewsters much too soon, if only they'd have waited another six months...some investor would've seen their viability.

I agree about the Brewsters! I always thought they looked structurally sound enough - and you can't beat the location. Seemed like a no-brainer to market as a rehab opportunity.

**detroithealth** · January-27-14, 04:07 PM

Originally Posted by bailey

...

NOBODY is begin "priced out of the market" they are being priced out of one or two successful buildings or areas.. and the only reason for that is because there is just so little available in "livable" areas....

"priced out of the market" means you need to leave Detroit to find something affordable...not one of these people needs to leave Detroit -home of the 50 dollar house...many within sight of the place they are being "priced out" of- what these people are complaining about is that they can't afford to live in the building they want to live in.

I agree and disagree with your points.

Yes, people [[myself included) can no longer afford to live in the buildings we want to live in. To say we're not being priced out of the market isn't accurate.

My rent increased 15% this year; I was recently offered a renewal rate of $1120 / mo on 582 sq ft at the Kales + I've averaged over $100/mo to heat it in the winter because the windows are old and drafty. [[2 years ago I was paying $975 on 815 sq ft here). That's in addition to the $440/ mo. I spend on auto & renters insurance to live in Detroit the legal way [[I have a 10 yr old car) + 2.4% of my income is taxed to Detroit. I was recently quoted $1600/mo for a 1bdrm at Lofts at Merchants Row and I won't get into the ridiculous hoops and pricing you have to jump through to get considered at the Broderick.

I have a great job and education. Not being cocky, but didn't see myself as a prime candidate for being priced out like this. Could I buy a house for $10K? Sure. Kinda? a) I don't want to and b) a $15K house comes with it's own issues. I've seen enough friends go through repairing stripped houses in Detroit that I know it's not where I want to be. I'd rather pay that same amount in rent every yr. for fixed costs.

I could get a decent place in downtown Ann Arbor for the same combined costs - but have a safer environment, better public services, etc. Don't get me wrong - I LOVE DETROIT AND I'M HAPPY WHERE I'M RENTING. But it's no longer worth the financial hemorrhage.

Sorry for the rant, but hopefully this puts something in perspective. I'm not bitching about losing an 1800 sq ft loft for $750. It's the total package of downtown living costs.

**corktownyuppie** · January-27-14, 04:21 PM

Originally Posted by detroithealth

I agree and disagree with your points.

Yes, people [[myself included) can no longer afford to live in the buildings we want to live in. To say we're not being priced out of the market isn't accurate.

My rent increased 15% this year; I was recently offered a renewal rate of $1120 / mo on 582 sq ft at the Kales + over $100/mo to heat it in the winter because the windows are old and drafty. [[2 years ago I was paying $975 on 815 sq ft here). That's in addition to the $440/ mo. I spend on auto & renters insurance to live in Detroit the legal way [[I have a 10 yr old car) + 2.4% of my income is taxed to Detroit.

I have a great job and education. Not being cocky, but didn't see myself as a prime candidate for being priced out like this. Could I buy a house for $10K? Sure. Kinda? a) I don't want to and b) a $15K house comes with it's own issues. I've seen enough friends go through repairing stripped houses in Detroit that I know it's not where I want to be. I'd rather pay that same amount in rent every yr. for fixed costs.

I could get a decent place in downtown Ann Arbor for the same combined costs - but have a safer environment, better public services, etc. Don't get me wrong - I love Detroit and I'm happy where I'm renting. But it's no longer worth the financial hemorrhage to "be the change I wish to see".

Sorry for the rant, but hopefully this puts something in perspective. I'm not bitching about losing an 1800 sq ft loft for $750. It's the total package of downtown living costs.

Unfortunately, this is part of the process. We need downtown real estate to be high rent in order for the banks to feel comfortable lending to refurbish them. And then as soon as the banks feel comfortable, it'll totally open up more supply [[at a slightly lower price) in the vacant buildings more on the outskirts of downtown.

It's already starting to happen...the Capitol Park rentals and the apartment replacing the Archdiocese of Detroit on Michigan Avenue will be at price point that's a little more affordable than Kales/Broderick is getting.

Til then, come out and rent in Lafayette Park or Corktown or the North End. Still great rentals out there right now.

This is short-term pain, but there will be long-term gain. Just imagine from Corktown to Lafayette Park to New Center with all the vacant buildings replaced with fully-rented high rises...

**detroithealth** · January-27-14, 04:27 PM

Originally Posted by corktownyuppie

Unfortunately, this is part of the process. We need downtown real estate to be high rent in order for the banks to feel comfortable lending to refurbish them. And then as soon as the banks feel comfortable, it'll totally open up more supply [[at a slightly lower price) in the vacant buildings more on the outskirts of downtown.

It's already starting to happen...the Capitol Park rentals and the apartment replacing the Archdiocese of Detroit on Michigan Avenue will be at price point that's a little more affordable than Kales/Broderick is getting.

Til then, come out and rent in Lafayette Park or Corktown or the North End. Still great rentals out there right now.

This is short-term pain, but there will be long-term gain. Just imagine from Corktown to Lafayette Park to New Center with all the vacant buildings replaced with fully-rented high rises...

Thanks for the encouragement.

So I guess on that note - I'm happy to report an actual case of the long anticipated $2/ sq ft price point.

My renewal rate is at $1.92/ sq. ft.
BUT
I was told the market rate of my unit [[for a new tenant) is:

$1220 for 582 sq ft = $2.09 sq. ft.
YAHTZEE!

**Joseph C. Krause** · January-27-14, 05:00 PM

The prices are rising based on hype and not objective improvement. The CVS closes at 7pm, the Papa Joe's downtown hasn't opened, and yesterday when I wanted to go to a concert in the North End and left 40 minutes early, there was no Dexter bus for 30+ minutes, no Woodward bus for 30+ minutes, an no Uber car available. I finally was able to flag a cab that was unable to take credit cards and didn't turn on their meter. We had to stop twice before finding a usable ATM. So traveling three miles within greater downtown should be worth that grief when the rental rate would buy 24-hour transit in another major city? It's not worth it. But I'm staying. Because I'm an enabler and love being abused, I guess.

**Jason** · January-27-14, 05:12 PM

Originally Posted by Joseph C. Krause

The prices are rising based on hype and not objective improvement. The CVS closes at 7pm, the Papa Joe's downtown hasn't opened, and yesterday when I wanted to go to a concert in the North End and left 40 minutes early, there was no Dexter bus for 30+ minutes, no Woodward bus for 30+ minutes, an no Uber car available. I finally was able to flag a cab that was unable to take credit cards and didn't turn on their meter. We had to stop twice before finding a usable ATM. So traveling three miles within greater downtown should be worth that grief when the rental rate would buy 24-hour transit in another major city? It's not worth it. But I'm staying. Because I'm an enabler and love being abused, I guess.

The prices are based on their being a large group of people who want to live in an urban area, and Detroit improving to the point that people are willing to actually live there.

Not only that but the prices are still very low compared to other cities. The Book Cadillac should be a top end luxury place and it's still only a little over $2 a square foot. In Toronto or Chicago an undistinguished building would go for far more than that just because of the location. Basically anywhere near a transit station would go for that much or more. So there are definitely still a lot of problems like you said, and those are keeping the prices down lower than they should be.

**corktownyuppie** · January-27-14, 05:24 PM

Originally Posted by Joseph C. Krause

The prices are rising based on hype and not objective improvement. The CVS closes at 7pm, the Papa Joe's downtown hasn't opened, and yesterday when I wanted to go to a concert in the North End and left 40 minutes early, there was no Dexter bus for 30+ minutes, no Woodward bus for 30+ minutes, an no Uber car available. I finally was able to flag a cab that was unable to take credit cards and didn't turn on their meter. We had to stop twice before finding a usable ATM. So traveling three miles within greater downtown should be worth that grief when the rental rate would buy 24-hour transit in another major city? It's not worth it. But I'm staying. Because I'm an enabler and love being abused, I guess.

If you're saying that there hasn't been objective improvement in 3-4 years, I guess we'll have to agree to disagree. Obviously, your experience above was real, and it's unfortunate. But the reality is that Detroit -- even downtown Detroit -- isn't a final product....it's still a prototype, and we are all Beta testers.

But I have definitely seen progress, and there's more coming down the pipe.