More than a decade after its bankruptcy, Detroit needs its middle class to grow in order to thrive.
That’s the case being made in a new report released Wednesday by the think tank Detroit Future City, which examined changes in the city’s population, income, education and housing. Detroit has had economic wins and losses in its path toward becoming a middle class city, researchers contend. Since 2012, Detroit has seen an increase in mortgage lending — loans that since 2018 have mostly gone to Black homebuyers. But nearly 100,000 Black residents have left the city in the past decade.
“A strong middle class will fuel economic growth, foster community stability and pave the way for sustainable progress in Detroit and throughout the region,” Anika Goss, CEO of Detroit Future City said in a news release.
The wide-ranging new report builds off of past studies from DFC looking at Detroiters income levels, employment, housing and other economic factors.
Here are three takeaways from the report:
More Black homebuyers received mortgages
Mortgage lending in the city grew from 220 loans in 2012 to 3,211 in 2022. Starting in 2018, Black homebuyers drove most of that increase. In 2022, for instance, there were 1,477 loans for home purchases that went to Black buyers compared to 652 loans to white buyers.
White buyers are looking at certain neighborhoods for homes, such as downtown, midtown, West Village and the parts of the University District, whereas Black buyers are finding neighborhoods beyond these select areas as attractive places to buy a home, according to Edward Lynch, director of research with the center for equity, engagement, and research at Detroit Future City, who authored the report.
The majority of loans, however, that went to Black borrowers were for less than $150,000.
Fewer rentals available for less than $1,000 a month
Detroit is still both a renter and homeowner city. But rental prices have gone up since 2014. That year, gross rent in the city was $893. In 2022, that increased to $990. There are also fewer rentals available for less than $1,000 a month.
In 2019, units priced at $1,000 made up two thirds of the city’s rental units but now account for over half of the rentals in Detroit, according to the report. Sixty-percent of renters spend more than 30% of their income on housing — past what is deemed affordable by federal standards. Income levels drive whether housing is affordable for Detroiters.
“Once people get to a certain income, they are much better positioned to not be spending a significant portion of their income on their rent,” said Ashley Williams Clark, vice president of Detroit Future City and director of the center for equity, engagement and research.
Detroiters earn less than suburban residents
Incomes among Detroiters are lower when compared to those in metro Detroit. In 2022, the average household income in Detroit was $52,254. In metro Detroit, it was $105,455.
The average household income of Black Detroiters is roughly $25,000 less than Black residents in metro Detroit. White Detroiters make about $31,300 less than white metro Detroiters. Latino and Hispanic Detroiters make about $40,500 less than residents in the suburbs.
“Household income is an important component of people’s ability to enter the middle class and in the creation of middle-class neighborhoods,” the report says. “Having sufficient income to enter the middle class provides people with a level of financial stability and the opportunity to build wealth through the purchase of a home or saving for retirement.”
To read the full report, go to www.detroitfuturecity.com.
