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Residential construction, especially apartments, on the rise

By: Sarah Wojcik | Shelby - Utica News | Published May 18, 2016

 An apartment complex called River Birch Bend is built on the north side of Lakeside Boulevard, between Schoenherr and Hayes roads, in Shelby Township.

An apartment complex called River Birch Bend is built on the north side of Lakeside Boulevard, between Schoenherr and Hayes roads, in Shelby Township.

Photo provided by Jordan Greenman

METRO DETROIT — Six out of seven counties in southeast Michigan reported residential construction growth in 2015 compared to 2014, according to a recently released report by the Southeast Michigan Council of Governments.

Janet Mocadlo, a SEMCOG planner and data analyst, said the report revealed a trend of rising apartment construction, especially in Ann Arbor and Detroit.

In 2015, apartment construction increased by 16 percent, while single-family home construction increased by 4 percent and condominium construction decreased by 4 percent.

“A lot of students and young professionals need housing, and a lot of young people are coming downtown wanting to live in an urban environment, closer to the job field, in a walkable environment,” Mocadlo said.

She said there has also been a spike in independent senior-living apartments.

“They want to move out of their house and not have to be bothered with the upkeep of owning a house, so they opt for a nice, upscale apartment,” she said.

With the economy recovering from the recession, she said many people are looking for apartments because they are not yet ready to make the financial jump into homeownership, so renting is a better option.

“A lot of people also want to save up and put down a big down payment on a house so they don’t have to take out such a big mortgage,” Mocadlo said. “They don’t want to be saddled with debt when they already have debt from student loans.”

In 2015, single-family homes accounted for 60 percent of total permits issued, condominiums accounted for 8 percent and new apartment units accounted for 32 percent, up from 27 percent in 2014. Overall residential construction was up 7 percent over 2014.

“We’re hoping that 2016 is going to be another good year,” she said. “We’re not going to see crazy amounts of construction, but I think that multi-family will remain strong and single-family will pick back up.”

Oakland County had a 6 percent increase in residential construction and issued permits for the largest number of units — 2,566 — of the seven counties in the study. Macomb County had 4 percent growth — 1,888 permits, up from 1,814 in 2014. Wayne County saw 18 percent growth in the total units permitted in 2015 — 2,084 permits as compared to 1,766 in 2014.

In 2015, Detroit led the cities and townships in the region for new residential units permitted with 913. Apartment and loft units accounted for 97 percent of the new units in Detroit.

Dan Hunter, deputy director of the Oakland County Department of Economic Development and Community Affairs, said the numbers show the continuing strength of the economy.

“A lot of (residential development in Oakland County) is single-family homes,” Hunter said. “Relatively low interest rates is probably a big part of that, with the economy strong and unemployment down.”

He said Oakland County’s school systems are among the draws for families, and some parks and golf courses in the county have recently been converted to single-family residential development.

John Paul Rea, director of the Macomb County Department of Planning and Economic Development, said increases in population and per capita income are factors that have had positive effects on the county’s residential development.

Since 2000, Rea said, Macomb County has experienced an 11 percent increase in housing units, and multi-family is on the rise.

“There is a whole spectrum of (multi-family) housing options,” he said. Some of those options include apartments, townhomes and condo complexes, and they have a range of styling and amenities.

Rea said the county also is seeing an emergence of more new single-family subdivisions and remodeling of homes in traditional neighborhoods. Although the average home value of $157,000 in 2015 was down from historic highs, he said there are visible trends of values increasing.

“Many generations of families are living in the community, which adds stability of residential housing stock,” he said. “Those are some really interesting trends that show us there are viable housing options, and people want to remain engaged for many years to come.”