A Detroit neighborhood is redefining ‘affordable for Detroit’ as the rental market hits an all-time high
The Detroit housing market is now one of the most competitive markets in Southeast Michigan. While the city once boasted among the highest rates of homeownership in the country, the majority of residents now are renters — and many are finding it hard to find or qualify for homes in their own neighborhoods.
“I need $4,500 (a month) just to live in Detroit now," said Latoya Williams. "You used to be able to live off of $2,000. You can't live off that no more."
According to U.S. Census data, the median household in Detroit only brings home $32,489 a year, or about $2,700 a month.
Like many other inner cities across the country, pricey new urban developments, combined with historically low wages, are pushing people out of their lifelong neighborhoods.
A report by Detroit Future City (DFC) published last year says the demand for quality, affordable rental housing exceeds the supply because in Detroit most households are considered "cost-burdened."
A household is considered to be “cost burdened” if they use more than 30% of their gross income on housing costs. According to the DFC report, 56% of Detroit renters fall into this category.
“If we can't stabilize housing so that people don't have to be faced with potential displacement, so much because of the cost burden, we're just going to continue to see this instability for families and instability for neighborhoods,” said Kimberly Faison, director of Community and Economic Development at Detroit Future City.
Barry Randolph has been tracking housing trends in Islandview, a once overlooked neighborhood on Detroit’s lower east side where he's pastor of Church of the Messiah. The church has a housing corporation that’s been buying up vacant lots and housing units since the late 1970s.
The Messiah Housing Corporation has grown to own over 200 housing units and 73 vacant lots in the Islandview area, rivaling outside developers.
The majority of its rental units are at prices way below market rate, aiding the fight to ease the housing cost burden in this Detroit neighborhood.
The church’s housing corporation is a non-profit organization that works to provide affordable housing for low-income households and foster community-based economic development.
More recently, Islandview has become a hot attraction for developers due to its close proximity to the state park Belle Isle and the city’s downtown, something Pastor Barry Randolph predicted years ago.
"The thing about it is, because Islandview was kind of forgotten in the beginning, we were doing housing development when nobody else was doing development, nobody was paying attention to Islandview," Randolph said. "So that's why we acquired so much property and we were doing so many things.”
Recent research by the real estate brokerage site Redfin shows “investor demand is stronger than ever as home prices increase, allowing investors to charge higher rents and sell flipped homes for higher prices.” Its analysis shows that investors bought nearly one of every five homes sold in Detroit in the last quarter of 2021, a record-breaking high for the city.
What sets the Church of the Messiah Housing Corp. apart from outside investors is that they are setting rental rates differently: “Affordable for Detroit,” as Pastor Randolph puts it.
By calculating the income each resident brings home, they work with renters to define what's affordable. It’s a method that steps away from the traditional use of area median income used by for-profit developers, which is considerably higher than the city's.
Pastor Randolph believes the housing corporation has created a blueprint for other communities across Detroit to fight back, and for themselves.
“We're faith in action," Randolph said. "If it don't exist, your job is to create it, not to talk about it, not just envision it, but to also make it happen. So we're not completely finished with that vision. But that's exactly what it is that we're doing."
Randolph predicts the development work his church is doing will be a model — especially for Detroit, where many neighborhoods are hoping to hang onto their culture, and their residents.
"Everybody else is looking at the right way to do an equitable community that's available to everybody.”