Neighborhoods within the greater downtown Detroit area are expected to see a demand for 10,000 new residential units during the next five years, according to a survey released Thursday by the Downtown Detroit Partnership.
The areas included in the Greater Downtown Residential Market Study are downtown, Corktown, Rivertown, Lafayette Park, Eastern Market, Midtown, Woodbridge, TechTown and New Center.
The figure reflects the demand for both market-rate and affordable-housing options — for sale and for rent.
“We’re seeing a continued demand for residential units, and that demand is increasing faster than the current supply of available units,” Eric Larson, CEO of the Downtown Detroit Partnership said in a statement. “There is a great opportunity in the city for developers for both market-rate and affordable units.”
Market-rate housing refers to dwellings rented or sold on the free market; tax credits for affordable housing frequently help finance construction by developers. Affordable housing is considered as being accessible to incomes between 30 and 80 percent of area median income. The median income for Wayne County is $48,100 annually for a one-person household, according to the Michigan State Housing and Development Authority.
The partnership released the study, its third, in collaboration with Invest Detroit and Zimmerman/Volk Associates, Inc.
The study notes that the average rent in a multi-family building in the greater downtown area is $1,703 a month for 862-square-foot unit. The average price for a 1,273-square-foot unit for sale is $338,263.
Findings in the study include:
■There is demand each year for 1,230 to 1,500 new market-rate rental and for-sale multi-family units, and an estimated demand for 414 to 512 affordable rental and for-sale multi-family units.
■Over the next five years, estimated demand for new market-rate rentals and for-sale multi-family units is 6,150 to more than 7,500 units. There will be a demand for 2,070 to more than 2,500 affordable units for rent or sale.
■Nearly 76 percent of units developed since 2014 were market-rate and 24 percent are affordable, or income-restricted units.
Nearly 7,400 new units have been proposed and are in the pipeline throughout the greater downtown area.
Residential projects in the downtown area include 28Grand, expected to be complete this summer in the Capitol Park district. The project will include 133 market-rate units and 85 affordable units.
Construction is also underway on the $100 million City Modern development with 400-units in the historic Brush park neighborhood downtown. That project is expected to be complete by 2020.
The study showed that while there were 20 new rental buildings developed in the area since 2014, it still lagged behind forecast sales. Among those projects were the Malcomson Building on Griswold in downtown, Kirby Center lofts in midtown and Regis Houze in New Center.
In 2017, 1,750 new rental units were developed, but that is 150 to 1,000 fewer units than forecast demand, according to the study.