Millennials, seniors, predicted the demand for housing in downtown Ann Arbor will increase

ANN ARBOR, MI – According to a recent study, downtown Ann Arbor is in demand for more housing that is not intended for University of Michigan students.

Ahead of the city council’s unanimous vote last week to develop more affordable housing in the central area of ​​the city, city council members received a 279-page housing needs assessment report from Bowen National Research.

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SmithGroup, a consultant working with the Housing Commission on downtown affordable housing plans, hired Bowen to assess housing needs last July. It closed in December, said Jennifer Hall, executive director of the Housing Commission.

“It was centered around the city center and around the city center and we were trying to determine the demand for housing for non-student housing at different income levels,” she said.

“We wanted to make sure we understood the demand in the downtown housing market as we have a lot of projects in the pipeline. It was very clear that the demand for affordable housing is very strong. “

The study mainly focused on rental housing that is affordable for households earning up to the area median income.

Population and household growth in the downtown study area has been very positive, outperforming the rest of the city, county, and Michigan since 2010 and is expected to grow faster than surrounding markets through 2025, the report said.

The central area of ​​the city, which Bowen calls the downtown study area, encompasses much of the city center but also some areas outside of the city center, while some parts of the city center, such as the student-dominated area of ​​South University Avenue, where some are located are excluded In recent years, large high-rise buildings for student apartments have been built.

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Bowen estimates that between 2010 and 2020, the population in the downtown study area increased by 1,476 people (17.7%) while the number of households increased by 731 (16.5%), with student growth in the South U area not is taken into account.

A map of the “downtown study area” in Ann Arbor’s 2020 Housing Needs Assessment report from Bowen National Research.City of Ann Arbor

Over the next five years, Bowen predicts the downtown population will increase by 557, another 5.7%, while the number of households is projected to increase by 299, another 5.8%. These growth rates will continue to outperform other areas, predicts Bowen, describing this as positive demographic growth that will add to the demand for additional housing in the downtown study area.

One- and two-person households are likely to see the greatest growth in rental apartments.

“The projected growth of smaller tenant households will increase the need for additional rental apartments, including studio, one and two-bedroom units,” the report said.

Tenants accounted for almost 4,000 (76.7%) of the inhabited residential units in the study area of ​​the inner city in 2020, and the number of households inhabited by tenants in this area is expected to increase by 169 (4.3%) between 2020 and 2025, it says in the report.

The rest of Ann Arbor is projected to increase the number of tenant-occupied households by 408, or 1.7%.

Almost a third of the households in the inner city study area are led by a younger millennium between the ages of 25 and 34, and the largest percentage increase between 2020 and 2025 is projected to be in this age cohort, followed by households aged 65 and over .

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Remarkable growth is also forecast for all millennial households between the ages of 25 and 44, adding 132 households to the downtown study area, an increase of 6%.

“Downtown and the surrounding area reflect national trends and are expected to see significant growth in millennials (25 to 44 years old) and seniors (65 years old and over) between 2020 and 2025,” the report said.

“This anticipated growth will drive demand for maintenance-free housing such as convenience-rich apartment and condominium projects and products that enable seniors to shrink and millennials to raise growing families.”

The report also highlights how the majority of tenants in the downtown study area are categorized as “costly”, paying more than 30% of their income for housing costs.

Read the full report.

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