Detroit’s expensive rent problem got worse during Covid and may not get better until 2024

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Detroit’s affordable housing problems, which already suffer from a lack of availability, will get worse before they get better.

A summary of income, employment and city rental rates in Detroit revealed that the number of people burdened with their housing costs increased in 2021. It was the first major increase after a decade of improving housing cost issues in the city.

As the scorching housing market cools, experts who study housing in Detroit predict it will be a few more years before rental rates follow suit.

“We were generally concerned (about affordable housing), but during the pandemic things were so turned upside down, and it became very clear that people living in the lower quadrant of the income scale weren’t being supported,” said Anika Goss, the director. director of Detroit Future City.

The report highlights how the COVID-19 pandemic has had a dramatic impact on Detroit’s housing stock and the ability of its citizens to manage the economic fallout over the past two years. It might take two more for things to even out.

“If rents go down and people go back to work in 2022, we could see a night out,” Goss said. “Hopefully in a year or two we’ll see some things drop.”

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Over the past 10 years, the number of Detroit renters spending more than half their income on housing peaked in 2011. After a decade of gradual declines, it plateaued in 2019 and then increased in 2021. According to the American Community Survey, it was pushed by a 9% drop in available rental housing.

Data from the American Community Housing Survey,

As cheap housing dried up further, incomes for Detroit residents remained the same. Employment also fell exclusively among black residents who represent the city’s poorest demographic.

“Employment is high, but not for everyone. A lot of people haven’t returned to work and a lot of them are still renting,” Goss said. “And now the margins are much smaller between the amount of their household expenses – which are likely higher – and the actual cost of their rent.”

Unraveling Detroit’s housing woes isn’t easy, especially after the pandemic-induced whiplash that has torn apart the past two years. Part of the reason is that Detroit rents are subject to average incomes for the metro area — not just the city. That’s a problem for Detroit households with an average income of $36,000 — nearly half of Metro Detroit’s median income.

The city eases some of that burden by subsidizing the rent for tens of thousands of units. But according to Goss, that’s only about a quarter of Detroit’s 125,000 rental units. These inequalities existed before the pandemic.

The labor market was already problematic for residents who worked in the city before COVID-19 disrupted things. Those who went job hunting found that the only job that was increasing was in the low-wage sector. “These are often not stable, insecure growth jobs,” Goss said. “They’re at the very bottom of the salaried employment sector. And it’s often the jobs that get cut first.”

Meanwhile, the housing market took off in 2021, costing many potential homeowners who might have considered buying a home if it were cheaper. The moratorium on evictions in rentals along with checks from the federal government have helped keep people housed in 2020.

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But when the moratorium expired, rental rates reacted to an increase in the number of people avoiding the housing market.

“The high rent is a reflection of the sales market,” Goss said. “A lot of people have decided to rent to wait for the resale market to get out of control. Even now, if prices go down, people are still waiting because it’s not a good time to get a mortgage.”

The easing in the housing market is not reflected in the ACS report, which Goss says will help drive down rents. However, it may take time for things to even out as interest rates rise and inflation is consistently high.

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