They’re a generation on the move.
Whether in their professional or private lives, millennials, adults born in the 1980s and ‘90s, have become known for exploring and adventure-seeking.
In urban communities nationwide millennials are a valued and highly sought-after commodity by city and suburban housing agents and developers in need of occupants. Around Detroit and beyond, millennials, especially the educated, professional variety, are among the most desirable residents, patrons and consumers. Community investors of all stripes are working to identify ways to attract them.
In Greater Downtown Detroit, the stakes are high. The HUB estimates the annual market potential for converting more than 3,000 households from renters to homeowners could exceed $704 million. Times that by all the neighborhoods in Detroit, and the possibilities are staggering.
But those markets will decrease if the millennials decide to move to the suburbs as they gain more income and begin to raise families.
Much need to be done to get them to stay in downtown Detroit, Midtown and the city’s neighborhoods.
Kurt Metzger, founder of Data Driven Detroit, says strategically designing neighborhoods is the key.
“All cities are trying to compete for millennials,” he says. “Everybody’s trying to attract them, and now the question becomes how do we keep them?”
While the three S’s, schools, safety, and shopping, are cornerstones for attracting virtually any homeowners with children, or planning families, millennial marketing requires more, Metzger says.
“The chances of them marrying, having kids and staying in rental condos are probably somewhat slim,” he adds. “You want to provide housing for them in a neighborhood setting that can compete against suburban neighborhoods.”
“Unique housing,” including open landscapes that leave room for would-be millennial homeowners to flex their creative muscle has appeal, say experts. Equally, if not more important, are residential and commercial neighborhoods that have distinct character, such as walkability and independently operated boutiques and coffee shops.
“The city has to be seen as a viable alternative to the suburbs,” adds Metzger.
Home affordability also factors in, especially for a generation that doesn’t think in terms of finding employment based on the amount of its mortgages. Soaring costs of condos and apartments in popular downtown Detroit are likely to force those living there to consider new options.
There’s also the truism that real estate must consider the needs of the buyer.
Kurt Rankin, an economist with PNC Financial Services Group, an arm of PNC Bank, says there’s been an increase in “short tenures” throughout the 1990s and in the first decade of 2000, largely due to millennials. Meanwhile, metro Detroit real estate values are increasing at annual rates of 6 to 7 percent, slightly more than the national average of 4 to 5. The pace of new home building might be one predictor of whether millennials lay down long-term roots in Midtown or other neighborhoods within city boundaries, he says.
A reported 800,000 residential permits were most recently issued in metro Detroit, according to data, compared with averages of more than 2 million in the early 2000s.
“This is going to be something to keep an eye on in the city of Detroit, given the blight,” adds Rankin.
A “Live Midtown” campaign and employer-endorsed resident incentives, including about 1,500 employees who’ve received them, have enjoyed success. But, while Midtown Detroit, Inc. has raised $80 million since 2000, helping to fund 40 residential developments and 1,000 housing units, the district is populated with more multi-story apartments and condos than single-family homes. As generations mature and begin settling socially and professionally, decisions to add space for children, pets, or leisure activity often follow.
The solution for millennials doesn’t require fleeing the city, say neighborhood advocates in communities like Grandmont Rosedale, which hosts its 11th annual open house from 1 p.m. to 5 p.m. Sunday, May 15, beginning at North Rosedale Park Community House, 18445 Scarsdale.
Grandmont Rosedale Development Corp.’s (GRDC) staff has three women in their twenties who’ve all bought homes in the west side neighborhood within approximately the past year, says Tom Goddeeris, executive director.
Grandmont Rosedale’s resident demographic is changing, he adds.
“You have a lot of interest from downtown and people who don’t want to live in apartments,” adds Goddeeris. “Houses in Detroit are still affordable.”
Even renters might prefer individual homes to having neighbors above and below them. Greater investment in rehabbed dwellings could create permanency by providing millennials more residential variety around the city, Rankin says.
“As Detroit rebuilds its sense of community and rebuilds its housing stock, from those perspectives, maybe a renter with single-family home options attracts more in-flow,” he says.
Creating models that fit millennial preferences might be a simple strategy, Rankin adds.
“Detroit’s in a very good position to do that because it has to see some sort of housing market transitions in the coming decade.”
– Top two photos by Paul Engstrom