detroit (MSA) does not need new construction

 

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The Washington Post came out with a fake-good headline a few days ago about Detroit’s housing market, claiming that:

Among the nation’s top 20 metropolitan regions, only the Detroit and Washington areas posted annual home price increases, according to S&P/Case-Shiller home price data for October released this week.

The key here is that this is not Detroit; rather, this is the Detroit Metropolitan Statistical Area (MSA). As compared to Detroit proper, which comprises 143 square miles, the Detroit MSA comprises the six counties surrounding Detroit, totaling to most of Southeast Michigan. Detroit’s crumbling population doesn’t exceed 1 million; Metro Detroit’s population exceeds 4 million. This trend isn’t occurring in Detroit proper, it is occurring in Metro Detroit.

What’s worse, the article continues:

Improbable as it might seem, the Detroit area is seeing an increase in building permits. Construction firms are dusting off their equipment and returning to work, and bidding wars are breaking out over desirable homes.

Well, okay, this isn’t Detroit, we’ve covered this already, but any increase in building permits and construction aren’t occurring within Detroit. As per Metro Detroit’s sprawl-inducing zoning policies, this growth is occurring admit a vacant housing crisis in Detroit proper, where some estimates list housing vacancies at 30% of the city’s housing stock.

Not all of this housing stock is usable, certainly not new, but the important point is that the infrastructure — the roads, the electricity, the schools — exists in Detroit proper and its nearest suburbs. And it is not being used to its optimum capacity right now. So instead, new construction continues to pull resources away from the natural urban pole to the outskirts of the Metro Detroit area, to places like Romeo, Shelby Township.

The outcomes of this urban policy make no sense, but are incredibly difficult to change. What, have Detroit leaders work with the suburbs? Years of animosity long ago ruined this vital relationship. Institute a smart growth boundary similar to what we’ve seen work in Portland? Tea Partiers in Troy, L. Brooks Patterson, and other Metro Detroit suburbs would never stand for it.

So no, WaPo, this is not a good thing. Detroit proper and Detroit metro do not need new housing construction. They need revitalization of what they have, not the cheap and unsustainable sprawl that their policies encourage.

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mitch: let poor live in empty homes? other commentators: uhh no, here’s why

What we have before us is a typical Mitch Albom column, the kind that runs in the Detroit Free Press/News on a regular basis. It has its cookie cutter three subheading organization, appropriately anecdote-y tone and a few heartrending/warming quotes. But oftentimes, I think that while well-intentioned, this one in particular is not asking the right questions, nor proposing the right solutions.

Albom writes of a two-parent family facing eviction from their moldy, barely inhabitable Detroit rental because they are behind in their $650/month rent payments. Albom’s solution:

But somewhere in this city there must be a place for them. And for other working families who are trying to make it. You hear constantly about houses in Detroit that can’t sell, that they’re giving away, that banks reluctantly take over.

A glut of buildings and an overdose of poverty should make matching needy families with places to live a lemons-to-lemonade situation. I know Detroit Rescue Mission Ministries is trying to help the Wilsons.

Yes, there is a glut of housing in Detroit (though it’s not all good housing stock). In fact, it’s estimated that as much as 30% of Detroit area housing stock and approximately 60% of office space in Detroit is empty, creating fears of increased opportunity for crime with a lessening of neighborhood social cohesion. Albom’s would be a solution if the fix were as simple matching supply with demand. But it isn’t – housing demand is nowhere near matching the excess of supply – because Detroit’s population keeps plummeting.

If Albom’s solution were to be put into practice, diminishing demand for homes for which demand is not currently sufficient,  the result would be nowhere near what needs to happen – an increase in housing prices, a problem to which the federal government is now weighing a policy prescription.

Housing prices necessary for economic recovery aside, the issue worth examining is the availability of rental property. The land(slum)lord is able to rent a moldy home because no competitive market for $650 homes for rent exists. The real problem is not a lack of home ownership, it’s the availability of rental property for families that cannot afford home ownership.  Interestingly, Albom details the family’s history with rending:

“Eventually, they saved up $700, which they gave to a man to let them move into a house which he said he would rent them for $500 a month.

“He gave us the keys,” Kristy recalled. “That same day, we found out he didn’t own the house. And he ran with our money.”

That led them to their current house in Detroit, the one with a sewage and mold problem no human should have to endure. For this, they say, they pay $650 a month. Yet because they are behind on the rent, they’re being evicted next week. My efforts to reach the landlord were unsuccessful, but who would take this place after them?”

Even when the poor are moving able to find a rental property at an affordable price, the regulatory framework is failing. Extortion? Against the law. Mold? Michigan has building codes (though not specific mold regulation unlike several other states). Eviction by slumlord? Legal framework pertains again. This is not a case where calling the landlord would even be logical – his or her disinterest in anything but $650/month has been well-established – but this is a case where you call a lawyer, the housing authorities, and advocacy groups, representatives, or really, like, ANYbody else? My dachshund included.