It’s been exactly 50 years since the civil unrest in Detroit. The year 1967—a chink in the city’s zeitgeist caused by the trickle-down racism and economic loss—sent the city spiraling for decades after. In recent years, however, the Motor City has been rebounding—slowly and unevenly, for sure—but rebounding nonetheless. The question now is: what direction are the city and its surrounding areas headed in now?
A new Urban Institute report takes a stab at the answer. It forecasts the opportunities and the challenges for the region, on the basis of past demographic and housing trends.
Detroit is poised to become a regional “growth node”
The Southeast Michigan region might add around 380,000 households between 2010 and 2040. Much of this growth will be concentrated in the city. The suburbs will grow too, but at a slower rate. Per the report:
...the city of Detroit will transition by the 2030s to one of the main growth nodes in the region. In many ways, this would reflect a profound shift in regional housing demand, from the “tale of two regions” to one region with relatively evenly distributed growth.
White households will drive new growth
Around 40 percent of the new households that the region will gain between 2010 and 2040 will be white-led. While households of other racial groups will grow at faster rates, whites will remain the biggest group in the region. The suburbs might become more diverse as African Americans fan out. Overall, however, the entire region is likely to remain pretty racially segregated.
Older households will double in number
The share of households led by folks over the age of 65 will rise from 22 percent to 37 percent in the next two decades. Aging households—renters as well as homeowners—struggle with affordability issues and have specific health care and social needs cities need to plan for.
Future black homeownership rates look pretty bleak
The Southeast Michigan region had long been a beacon of homeownership in the country—for black and white households alike. But the Great Recession changed that. Subprime lenders disproportionately targeted African American households, burdening them with the brunt of the foreclosure crisis. Many African Americans in and around the Detroit region continue to be locked out of recovery. Homeownership—one of the main ways to build wealth in America—may never be in the cards for many members of this group again. White residents, on the other hand, have retained a homeownership rate 5 percentage points higher than their counterparts nationwide.
Going forward, two scenarios could occur. If the current trends continue, only 44 percent of African American households will be owning homes in 2040. If the housing and economic conditions return to their 2000 state, that rate would increase to roughly 50 percent.
The era of the renter
The Great Recession has set off perpetual rental affordability crisis in the country that shows no signs of letting up. Southeast Michigan will not escape that fate. Oakland and Wayne counties are set to have the highest number of renting households (first graph below). But while younger households will contribute to the rental demand across the region, it’s the aging households that will be driving it (second graph below). Via the report:
Though the growth in senior renter households is noteworthy, it is less about former owners becoming renters and more about renter households continuing to rent. This means that even as there is expected to be a relatively steady demand among younger generations for rental housing, existing renter units will not necessarily meet demand because they are turning over less often.
Detroit is getting back on its feet. But to ensure that the benefits accrue to all its residents, and to residents in the surrounding areas, it has to work together with its neighboring jurisdictions towards a comprehensive plan for inclusive growth, the report concludes:
Accommodating a region’s household demand is a matter of reconciling demand and supply, but a simple, singular notion of supply and demand ignores the dynamic nature of providing the right kind of supply in the right places over time.