Few new homes built in Detroit, but that may change
Add Axios as your preferred source to
see more of our stories on Google.
Greatwater's homes on Fischer Street between Kercheval Avenue and St. Paul Street. Photo: Courtesy of Greatwater
New construction of single-family homes is exceedingly rare in Detroit, but a recent project could be an indicator of whether that's about to change.
The big picture: Detroit issued only 18 permits for new house construction last year. Among those testing the waters of new-build demand is developer Greatwater Homes, which recently completed three homes in East Village.
- It has two more nearing completion and plans 18 additional homes in the area.
State of play: Mayor Mike Duggan called Greatwater's development "the beginning of a trend over the next couple years … I think you will see more and more people building market-rate houses in neighborhoods."
By the numbers: Greatwater's homes are priced at $339,000, $439,000 and $459,000, advertising amenities including garages and air conditioning. The developer aims to give buyers an option who don't want to undertake the difficulty and unpredictability of a fixer-upper, Greatwater co-founder Matt Temkin tells Axios.
- "[The project] was a risk, but our goal was to deal with that risk by just making a great product, and leave it out there for the market to respond, and it did," Temkin says.
- Two of the first three homes have sold, and a made-to-order home has been presold.
Some real estate professionals in Detroit are monitoring this development closely.
What they're saying: If successful, it could "drastically change the investment landscape in the city" by creating a rush of similar projects, says Sami Abdallah, a Detroit real estate investor and owner of Re/Max City Centre in Southfield.
- On the flip side, though, Greatwater's homes aren't "very affordable," which could present challenges, Abdallah tells Axios.
Context: Preserving old homes by rehabbing them is an essential part of retaining neighborhoods' culture.
- New construction is also a "necessary component" of community development to fill in vacant land, says Angela Carlberg, senior director of community development ecosystem building for Community Development Advocates of Detroit.
- Yet, affordability and other factors remain major concerns. "It's a really big leap to presume that what's being built, as far as new construction, is going to serve who's here," Carlberg tells Axios.
- Developers can hire contractors from communities to ensure more economic benefit for the neighborhoods they enter.
Flashback: While Detroit is known mostly for its historic housing stock, a decade-long trend that started in the 1990s left scattered subdivisions of vinyl-sided suburban-style homes, Outlier reported.
- While new housing is a logical solution for filling up the city's large swaths of vacant land, "the cost of the taxes on a single-family home makes it impossible" to build new ones, Duggan told the Detroit News last year. Plus construction costs and the state of the housing market.