The WalkUP Wake-Up Call: Michigan Metros looks at development in seven Michigan metropolitan areas: Detroit-Ann Arbor, Grand Rapids-Muskegon-Holland, Lansing, Jackson, Kalamazoo-Battle Creek, Saginaw-Bay City-Midland, and Flint. Our analysis of these areas finds that in the most recent real estate cycle, 22 percent of all new income property development located in the 2.7 percent of land that is walkable urban. This share of new development is up from only 6 percent in the 1990s real estate cycle and 12 percent from the 2001-2008 cycle.
Walkable places’ increasing share of development is most likely a response to pent-up market demand. Only eight percent of the total housing stock is located in a walkable urban place and just half of that was built after 1960—meaning a significant portion may be obsolete. This is despite national polls suggesting that at least 40 percent of Americans would like to live in a walkable urban place. Demographics are also shifting to favor urban living: 64 percent of Michigan households have just one or two persons, the target market for walkable urbanism, and that percentage is rising.
This pent-up demand is reflected in rents and prices. Across all the Michigan Metros analyzed, average office rents in regionally significant walkable urban places are two percent higher than in comparable drivable locations. Retail rents are 13 percent higher, multifamily rental apartment rents are 28 percent higher, and for-sale residential prices are 50 percent higher. These are crude averages that hide significant variation among and within metro areas, but the broad implication is clear—there is pent up demand for walkable urban places in Michigan.
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