Rising rents. Falling wages. Detroit’s poor face housing crisis.

Rents are rising in Detroit, but incomes haven’t kept pace, driving the working poor out of affordable housing.

Clark Washington Jr. works 10 hours a day, five days a week driving a hi-lo on a shift that starts at 9 p.m.

He keeps his costs low, living with his 70-year-old father, and only has one major expense: his cell phone.

Trouble is, he makes entry-level wages, $9 an hour, and that makes it hard nowadays to find housing in Detroit, the poorest big city in the United States.

Washington said he’s filled out countless rental applications and hears a frequent refrain from landlords and property managers: “When something becomes available, we’ll call you.”

"That call never comes,” Washington said. “That happens over and over and over again."

Washington’s plight is becoming increasingly common in Detroit, whose booming real-estate market belies growing concern that rents are putting stable housing out-of-reach for the working poor.

Rents have climbed to $820 per month in from $650 in the past 10 years, according to a study by city this year.

Over that same period, median wages fell 20 percent to $20,384 while adjusted for inflation, according to federal statistics.

"For a majority of Detroiters living in neighborhoods outside of downtown and Midtown, people are just not making enough money to support even slow growth in the rental economy," says Anika Goss-Foster, executive director of the nonprofit think tank Detroit Future City.

A 2016 city housing study found nearly 60 percent of Detroiters are “rent-burdened,” paying more than 30 percent of their income toward housing.

And just 6 percent of all the city’s housing units, about 22,000, are classified as “affordable,” meaning they are subsidized to keep rents low.

That’s one of the reasons the U.S. Census has classified Detroit as among the nation’s leaders in evictions. The city’s 36th District Court has averaged more than 30,000 eviction cases per year for several years.

Washington’s troubles began in 2012, when he was hit with consecutive misfortunes: He was laid off from Standard Federal Bank and lost his house on the west side to tax foreclosure later that year.

Since then, he's lived on and off with family members.

Washington said he’s willing to spend about $700 a month on rent or about half his take-home pay.  Even so, Washington said landlords don’t want to take a risk on somebody with so little financial wiggle room.

"My sacrifice has been not to enjoy life as much," Washington said. "I'm out of the mindset of having extra money for recreation because I just can't afford it at this point. I'd rather have a home where I can go to bed every night than money to have a good time."

Fewer rentals, more renters

Like the rest of the country, Detroit was hit hard by the mortgage foreclosure crisis.

But unlike the rest of the country, a tax foreclosure crisis followed in Detroit, which saw more than 150,000 foreclosures that were sold off in auction by Wayne County. Tens of thousands are now vacant.

"Homeownership, particularly African-American homeownership, really imploded in Detroit," says Mark Trekson, a research analyst with the Urban Institute, a Washington D.C.-based think tank. "It used to be higher than rest of country. Now it's about the same or lower."

Since 2000, black homeownership in the county dropped more than 10 percent. Now fewer than half of the city’s black residents, who make up 80 percent of the population, own their homes.

That’s forced former homeowners to rent and reduced the amount of available housing stock landlords are willing to buy and rent out.

Sterling Howard is one of the principals at the real estate firm Silver Capital Group of Farmington Hills that owns 135 single-family rentals.

Most of them are in the Detroit neighborhoods, such as Bagley and East English Village, that traditionally have not received much outside investment.

Howard said it’s difficult for developers to provide quality housing in depressed markets.

"If a renter can only pay $700 a month, and everything else in Detroit is relatively high — taxes, insurance, maintenance — there's not a lot of money left over," he says.

"So how do you expect someone to pay a mortgage or address lead hazards or make major improvements to these properties without the financial resources? That's why, when you look at property in the city, you see cracked driveways and garages falling down.

 

Clark Washington Jr. works 50 hours a week and says he can’t afford an apartment in Detroit. (courtesy photo)

"A lot of these landlords are not even providing quality places to live," he adds.

Sterling Capital is able to make it work, Howard said, because it has a high number of units that each make small profits.

Timothy Thorland, executive director of Southwest Housing Solutions, one of the biggest providers of low-income housing in the city, still has to subsidize most of his company's projects with tax credits.

"It's still not great market for real-estate investors," Thorland says. "If I'm an investor, and I'm not going to convolute this with a social mission like ours, I've got to be getting $1,600 a month in rent. And those are not Detroit neighborhood prices at this point."

Thorland thinks Detroit is a long way from an economy that doesn't require subsidies to function.

"When I look at the what the socioeconomics of Detroit's population currently are, we will never have enough affordable housing," he says.

Competition increasing for rentals

Washington is about to have more competition for the number of affordable places on the rental market.

The Wayne County Treasurer recently announced new tax foreclosure numbers, and while the number of tax foreclosed properties has decreased for the third straight year, 1,499 of the homes on the tax auction list are occupied by either a renter or owner.

Those people may soon need a new home.

Washington hasn't given up hope on finding a place in Detroit.

"I've been told why not try Oakland or Macomb?" he says. "I love my city, my heart is here. I was born and raised in Detroit and always wanted to be here."

Despite his devotion to the city, he has broadened his search to other southeast Michigan counties. The response?

"Nothing has been available yet," he says. "That's been hard."

About the author

Aaron Mondry is a freelance journalist for Outlier Media, a journalism service that delivers data reporting and information to low-income news consumers over SMS and message apps.

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Comments

Matt
Tue, 08/21/2018 - 8:49am

The entire premise of this article, "falling wages", is build on some referenced but unshown "federal study" which we can't see or evaluate. Who knows what to make of this? The editors Bridge need to do better. What part do state federal and local building, zoning codes and regulations have in making housing unaffordable? Way bigger than it is admitted.

Teedub
Tue, 08/21/2018 - 10:05am

I don't need a federal study or Washington DC think tank to see the relevant number in this story. It's "nine", as in dollars per hour. If this man is paid $12 per hour, his ability to find decent housing is improved.

JW
Tue, 08/21/2018 - 10:48am

The people in the state of Michigan need to vote in a governor and legislature that would pass a new state minimum wage law, that is the only way you will get incomes to rise. But they keep putting Republicans in office who don't give a crap about poor people, especially poor people of color, perhaps the next two elections can change that. Also more charitable organizations should be putting their money into rehabing homes and apartments and renting them out at resonable rates. All these tax exempt churches are sitting on stockpiles of money, they need to put it where their mouth is and use it.

Mark
Tue, 08/21/2018 - 11:36am

JW - I suggest you move to a different country if you are unhappy. Thanks to Pres Obama for 8 years of negligible economic growth. The problem in urban areas is that too many people make bad choices early in life.....then they expect the govt and charities to take care of them. The economy is booming right now, it will not get much better....there are ~6.5 Million Job Openings (a record number), Companies are begging for workers, there are numerous, numerous skilled trades training programs. No excuses.....join the train, or miss it again.

Matt
Tue, 08/21/2018 - 12:31pm

Just curious, if a law is passed raising wages, where or who do the dollars to accomplish this come from? The owner's pocket? The customers? Other employees? Thin air? Looking at a income statement, I'm just not sure what you'd find acceptable.

Eric
Wed, 08/22/2018 - 12:28pm

There's a lack of livable old apartment buildings in many neighborhoods due to the decades of neglect and disinvestment. Other cities continued to use these buildings that provide cheaper rents than rehabs or new buildings.

Lisa
Mon, 10/15/2018 - 8:11pm

Affordable and liveable mean two different things. If an individual is making $15 an hour that only covers the basic and not even a decent apartment or house. Security deposit, rent, insurance, student loans groceries and utilities, that just existence. It's not about what people have done in their past! It's about gentrification, paying people fair wages! You have folks with degrees making $15 an hour and living at home with their parents. Students loans and insurances are two of the biggest crooks in this country. Once these high ends places stay empty for a period of times, the prices will eventually drop and a lot of the placed will be calling the working poor to rent! They will offer all kinds of deals!!