What's fueling the massive spike in home and rent prices across metro Detroit?

Posted at 5:53 AM, Jun 14, 2021
and last updated 2021-06-14 07:03:22-04

(WXYZ) — Home prices are hitting record highs, and rent is also on the rise, making it difficult for some people to find and keep a place to live.

According to Zillow, the average home value in Michigan is more than $205,000, up 13% from April 2020.

Rent Cafe reports the average rent in the city of Detroit is up to more than $1,100 a month, a 4% increase from last year.

This is a problem that can cause even more damage down the road, as the CDC said it's a basic necessity for families to find safe and affordable housing.

"Every time you look, where you wanna go, everything is filled up. So it's no vacancies. It's no vacancies," Kristie Hogan said.

Hogan has struggled to find affordable housing in Detroit. Preparing to move after eight years of renting the same place, she said her landlord is forcing her out and putting in new tenants who will pay higher rent.

Hogan said she's not on any government assistance and is simply using her job income to keep a roof over her head.

"How, how dire of a situation is this for you? As far as finding affordable housing," 7 Action News Reporter Darren Cunningham asked.

"It's very very dire. I'm in desperate, desperate need," Hogan replied.

The need for a nearby bus route that will get her to work is compounding the problem.

"You really just need state and federal government to create tools that make it easier for developers to build affordable housing and for residents to qualify and to live in affordable housing," Matthew Roling, an adjunct professor of finance at Wayne State University said.

According to the National Low Income Housing Coalition, Detroit suffers from a deficit of about 100,000 housing units for low-income residents.

The U.S. has a shortage of 7 million units of affordable housing.

Roling said the term affordable housing typically refers to government-subsidized housing for low-income residents.

"But these days the housing market, the 'for sale' residential market has exploded in value so much in the last year and a half, the affordable housing conversation in a lot of markets could also reasonably be construed to include that," he said.

Roling and Jim Schaafsma, a housing attorney for the Michigan Poverty Law Program, say very low-interest rates and little supply of homes for sale are driving up home prices.

"That only exacerbates then the rental housing affordability crisis because more and more families are, in some instances, maybe if they're losing their homeownership interest or just not able to get into that market right now, which puts a lot more pressures on rent," Schaafsma said.

Roling said people can call lawmakers and ask them to pass legislation that addresses affordable housing infrastructure in order to help those struggling to find and keep a roof over their heads.