- University of Michigan Poverty Solutions study released today shows Detroit’s Black homeowners gained $2.8 billion in home value
- Study based on 9 years or recorded home sales data
- Neighborhoods with highest poverty and lowest home values in 2014 saw the largest gains, according review of recorded sales
- Mayor says residents’ work stabilizing and strengthening neighborhoods over past nine years has paid off with this historic gain in wealth
Today, Mayor Mike Duggan, City Council members joined with Detroit residents and real estate agents to celebrate a major milestone for Detroit’s Black homeowners: nearly $3 billion in added home wealth since 2014 for those who stayed in the City.
A comprehensive new study released today by the University of Michigan Poverty Solutions entitled “The Growth of Housing Wealth in Detroit and its Neighborhoods: 2014-2022” concluded that Black homeowner-occupants in Detroit amassed $2.8 billion in added home value between 2014 and 2022, which represents an 80% increase during that time. The study analyzed changes in Detroit’s housing values for the nine-year period following the city’s municipal bankruptcy to understand how much growth there has been and whether that growth has been equitably distributed across neighborhoods and racial/ethnic populations.
The study was led by Jeffrey D. Morenoff, who is Professor and Associate Dean, Gerald R. Ford School of Public Policy and Professor of Department of Sociology and Population Studies Center at the University of Michigan. Demographer and Founder of Data Driven Detroit, Kurt Metzger co-authored the report, which can be found on the UM Poverty Solutions website.
According to the study’s findings, the net value of all owner-occupied homes increased from $4.2 billion in 2014 to $8.1 billion in 2022, a $3.9 billion/94 percent increase in housing wealth over these nine years. It also estimates Black homeowners realized the vast majority of that gain in wealth, with their home values rising from $3.4 billion in 2014 to $6.2 billion in 2022, a $2.8 billion jump.
“For the past nine years, the active members of 600 organized block clubs and neighborhood associations in the city have been working to rebuild their neighborhoods. The $3 billion in new home wealth they have created and earned is a direct result of their dedication and hard work,” said Mayor Mike Duggan.
Ken Scott, past President of the Greater Detroit Realtist Association and Detroit Association of Realtors and HUD certified housing counselor, said the study matches what he and his fellow realtors have been seeing over the past several years.
“There has been a huge shift for the better in Detroit’s home values, driven largely by the improvements being made in neighborhoods. My follow realtors and I have been seeing this shift for years. Black owned homes are rising in value and Black families are gaining the most family wealth,” said Scott. “And while home values have risen dramatically, there is a lot of growth yet to come. Detroit homes are beautiful and dollar-for-dollar still a great value.”
Scott also praised programs that create new homeowners, like Detroit’s ARPA-funded Down Payment Assistance Program, which provides grants of up to $25,000 to help with closing costs and other costs associated with home purchases and make homeownership more accessible and affordable. So far, the program has created nearly 500 new homeowners in Detroit - most of them Black. A second round of the program is expected to open in June.
Lowest value areas saw greatest increase
The study also shows that neighborhoods that were at their lowest point in 2014 have risen the most in value. Neighborhoods that had the lowest values in 2014 saw a nearly 300% increase in value in 2022, while those areas of comparatively middle and high value saw increases of 99% and 131%, respectively.
“Home values grew the most from 2014 to 2022 in neighborhoods with the lowest property values and highest poverty rates in 2014,” the study says. “Neighborhoods with high concentrations of Hispanic/Latino populations, especially those in Southwest Detroit, experienced some of the largest increases in home values over the nine-year time period. The growth in home values was geographically dispersed in neighborhoods throughout the city rather than being concentrated in neighborhoods in the downtown and midtown areas.
In the Condon neighborhood, which saw one of the largest rises in value, the average home sale price in 2014 was about $7,500. By 2022, the average home sale had soared to more than $71,000 - an increase of 853%. Other neighborhoods in the city, including Jefferson/Mack, Kettering, Springwells and Davison saw increases of 300% or more.
The Mayor attributed the neighborhood rebound to committed residents who fought for their communities and did the hard work to keep them stable as the city worked to recover. He also credited city employees for a series of neighborhood improvements that have contributed significantly to rising home values, including:
- Renovation of more than 170 city parks and recreation centers
- Removal of 25,000 dangerous vacant homes
- Renovation and re-occupancy of 15,000 salvageable vacant homes
- Sale of 25,000 vacant side lots to adjacent homeowners
- Cleaning of 3,000 overgrown and trash-filled alleys
- Commercial blight removal and corridor cleanup
- New neighborhood streetscapes bringing back small businesses
- 167 new Motor City Match businesses open across the city
- Safer neighborhood streets thanks to installation of 10,000 speed humps
- Programs like Renew Detroit, 0% Interest Home Improvement Loan Program to address critical repairs and to help keep longtime Detroiters in their homes.
The study also cited the dramatic reduction in tax foreclosures in Detroit as a key factor in determining the net wealth gain. Since 2016, the City and a coalition of partners has helped to reduce tax foreclosures by 95%, also helping to thousands more longtime Detroiters in possession of their homes. Those partners have included:
- The Rocket Community Fund
- Gilbert Family Foundation
- U-SNAP-BAC
- Eastside Community Network
- Bailey Park
- Hannan Center
- Central Detroit Christian
- Cody Rouge Community Action Alliance
- Bridging Communities
- MiWealth
- United Community Housing Coalition
- Wayne Metro
- Accounting Aid Society
Original story published by City of Detroit Mayor's Office here
