The Dirt: Trickle-down rent-o-nomics and a claim that luxury housing lowers overall rents

City officials, experts and activists all agree: Detroit needs more affordable housing.

A new study claims market-rate rental housing somehow eases pressure on low-income tenants. What do we think?

Elsewhere, the deadline is fast approaching to save the Belle Isle Boathouse, Wayne County finally gets its “new” jail, and Michigan mobile homeowners struggle as private equity firms buy their parks.

Luxury housing paradox

Affordable housing advocates around the city have often seen luxury, “market-rate” housing as standing in opposition to affordable housing. Luxury housing raises rents in the neighborhoods where it’s built and pushes out longtime residents, so the argument goes. But could it actually do the opposite (paywalled)?

That’s the finding from a new study from the Federal Reserve Bank of Minneapolis, which looked at luxury housing’s effect on rents in the Twin Cities metro area. It found that when new units get built, regardless of who can afford them, “there’s a greater supply relative to demand and, as a result, lower rents,” the authors write.

My thoughts? It’s complicated. I might hold my nose at the rents developers are asking for at The Residences at Water Square , on the site of the old Joe Louis Arena, for example. But it’s a new building, and they aren’t using tax dollars to build it. If this apartment building helps ease pressure on housing demand, even incrementally, then I won’t complain. But we also can’t lose sight of the fact that Detroit in particular also needs lots more affordable housing . (Crain’s Detroit Business, Federal Reserve Bank of Minneapolis, Outlier Media)

Manufacturing displacement

Low-income residents often seek out manufactured, or mobile, homes as a more affordable option for homeownership or a way to live on a fixed income. But many of these residents now say their homes are unaffordable as out-of-state buyers jack up rents on the land underneath them while neglecting repairs.

These mobile home parks have increasingly been bought up by private equity firms that keep their identities concealed and are difficult to reach or for homeowners to negotiate with. Of the 1,032 licensed manufactured housing communities in Michigan, around half the owners are out of state.

Lawmakers around the state are looking to increase transparency and regulation of mobile home parks. A series of bills proposed in the Michigan Legislature would prevent unlicensed owners from collecting rent, require approval for any rent increases, establish a database of park owners and allow greater participation for local governments in the state’s park inspections. (BridgeDetroit)

Has the ship sailed?

The Belle Isle Boathouse is one of Detroit’s most unique structures. It’s falling into disrepair, but a dedicated group of preservationists is keen on saving the Venetian-style building built in 1902.

Unfortunately, time and money are running out (paywalled). The Michigan Department of Natural Resources (DNR), which manages the island park and boathouse, says restoring the building would cost more than $42 million, a cost it won’t cover. And nobody who wants to save it seems to have the right amount of money, either. A request for proposals opened in February has yet to receive bids; the deadline is Friday.

One architect says the DNR’s estimate is inflated by about $17 million. Meanwhile, Friends of Detroit Rowing has been renting the boathouse and doing its best at upkeep. The Grosse Pointe Farms-based nonprofit says the DNR could be doing more to preserve it.

Experts in historic preservation say the most likely plan to save the building (paywalled) is a public-private partnership where a developer works with the state and subsidizes costs with tax credits. (Outlier, Detroit News, Urbanize Detroit)

What’s in a name?

Residents have strong opinions about the names and boundaries of their neighborhood . The city has been known to choose names for neighborhoods that residents themselves never use. Do you know about “Fishkorn” or “Corktown Shores” or The Dig fav — “Buffalo Charles”?

Detroitography founder Alex Hill created a website that lets you map your neighborhood and see the way others delineate it. (Model D, Detroit-Neighborhoods.com)

Development news quick-hitters

Wayne County finally has a new jail. Dan Gilbert’s Bedrock Detroit officially handed over the keys of the new Criminal Justice Center to the county on March 18 after months of delay and cost overruns. The county has six months from that date to move into the building. (Freep)

A new 78-unit apartment building near the former Michigan Central Station called The Brooke will open May 1 (paywalled). Rents range from $1,600 for a studio to $2,200 for a two-bedroom apartment, with 16 units set aside for those making up to 80% of the area median income. (Crain’s Detroit Business)

The Detroit Lions are considering moving their training facility and headquarters downtown (paywalled). Team President Rod Wood mentioned the potential move during a recent NFL owners meeting and cited land that would be created through the I-375 redesign project as a development possibility. (MLive, Outlier)

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