New apartments downtown

According to the Free Press, 1403 and 1413 Woodward will be converted into 70 upscale apartments with first-floor retail. The earliest occupancy would be spring 2010.

Should Detroit downsize?

Last week CNNMoney.com wrote about Youngstown, Ohio's plans to shrink the city to make city services more cost effective:

Now, in a radical move, the city - which has suffered since the steel industry left town and jobs dried up - is bulldozing abandoned buildings, tearing up blighted streets and converting entire blocks into open green spaces. More than 1,000 structures have been demolished so far.

Under the initiative, dubbed Plan 2010, city officials are also monitoring thinly-populated blocks. When only one or two occupied homes remain, the city offers incentives - up to $50,000 in grants - for those home owners to move, so that the entire area can be razed. The city will save by cutting back on services like garbage pick-ups and street lighting in deserted areas.

In Sunday's Free Press, columnist Stephen Henderson said Detroit should do the same. He even suggests that community development groups should stop constructing new low-income housing, quoting a Wayne State professor:

"In the sparsely populated areas, we shouldn't be cheering groups that build 50 units of new housing," he said. "That's aggravating the situation. You've got to move people around, and build in denser areas to allow the city to operate more efficiently and effectively."

The housing collapse quantified

When the housing market is healthy, homes sell in three months. The Free Press reports today that Metro Detroit has a 18.9-month inventory of houses. The city proper is unbelievably worse: 51.1 months, or more than four years.

If you want to sell your home, this is terrible news. But if you have money to burn, now is truly the time to buy. Can the market bottom out any lower? (Let's hope not.)

Detroit homes sold in bulk

Prices are so low that out-of-state investors are buying Detroit homes in bulk. The Free Press reports that as many as 100 foreclosed homes are sold together to local brokers for "pennies on the dollar." These homes are then resold to out-of-state investors who hope to sell them for significant gain in five to ten years when the market rebounds. In the meantime, they're marketing them as rentals.

The city needs to monitor this. Huge swaths of Detroit will soon be managed by out-of-state landlords with no knowledge of the city. That could be disastrous. But who knows, they may prove better landlords than the despicable local slumlords who flip owner-occupied homes to rentals and then let them crumble because they assume the property will be worthless in the future. Out-of-staters don't share the same biases that locals harbor against the city; they may actually care about the longterm value of the homes they buy.

Condos vs. rentals

Metromode questions the peculiar absence of rental options in (Metro) Detroit. Developers only turn to rentals when condo or loft units aren't selling; there has been little push to further develop the rental market as such. But doing so might be the key to creating density and attracting more young people to the city who don't necessarily want to commit to living there longterm.

A buyer's market

The News headline speaks for itself: "2008 may be brutal again for real estate".

Detroit, in particular, is feeling the pinch. The Free Press reports that the city's best homes are selling for a fraction of their true worth. And some of the new loft and condo projects can't find buyers. Crain's writes that the Mid-Med Loft project has failed. The building at 4265 John R St will be marketed as office space instead.

Monday news roundup

• The Free Press reports on Open City, a new networking group for entrepreneurs looking to start and grow small businesses in the city.

• According to Crain's Detroit, The Skillman Foundation is attracting millions in matching dollars for its effort "to foster healthy, safe and supportive environments for children and their families" in six Detroit neighborhoods.

• Also in Crain's, a dry article on the Downtown housing market with an important point: "People can’t sell their suburban homes, so they don’t have proceeds to use for buying a Detroit condo; and the lending market makes it hard to take on more debt." The national housing / credit crisis may prevent further housing construction Downtown.

• Finally, a Detroit News piece on a new task force to bring grocery stores to the city. The task force is needed: with the closing of Farmer Jack's two Detroit locations, the city is without a single national grocer within its limits.