Detroit comeback making life pricier for long-time city residents

Gritty residents and business owners who stuck with Detroit through the economic bad times fear they could be priced out during the city's slow recovery as property values and rents tip-toe up. Detroit is among several large urban communities experiencing a mini-boom as developers see potential where there once was neglect and abandonment.

"When an area gets popular, you know the landlord always wants a bite of it," said John Farhoud, who is unsure he can afford to keep paying the rent on his bakery shop in the Eastern Market District, an area that just experienced one of its busiest summers.

Farhoud says he closed a sandwich shop in an indoor marketplace there two years ago when its then-owners doubled the monthly rent from $1,700 to $3,400.

"I talked to my partner and we decided it wasn't worth it," he said.

Change coming to city

Less than a year after Detroit emerged from the nation's largest municipal bankruptcy, new developments indicate a revival. Crews are completing touchups on a previously rundown 36-unit apartment building a slap-shot distance from an under-construction hockey arena and entertainment district just north of downtown Detroit. Work has also started on a $65 million retail and residential development along Detroit's east riverfront.

And it's not only developers with money to spend. Suburbanites are flocking downtown, and this is boosting business.

Up to 3,000 customers daily file through the Gratiot Central Market, according to building owner Tommy Bedway, who says the property's value has increased by about 30 per cent since he bought it in 2013.

Bedway's grandfather and father worked in the market's butcher shops in the 1930s and 1940s, and his family has run its own store there since 1967. He says he now wants businesses in the Gratiot Central Market that fit his vision for the sought-after site.

"We can become more selective, and we have turned people down," Bedway says.

Detroit is not the only urban centre being revitalized.

Abandoned buildings and old hotels along Los Angeles' Skid Row are being repurposed as expensive lofts, condos and apartments. Mayor Bill de Blasio launched a program to protect tenants from eviction in areas of New York City undergoing gentrification, including Bedford-Stuyvesant, Bushwick and Crown Heights in Brooklyn, Jamaica in Queens and Harlem in Manhattan.

Long-time residents need to benefit, too

George N'Namdi, an artist and gallery owner in Detroit's Midtown, says that while newcomers are welcome, the city must ensure that native Detroiters aren't edged out.

"We need to have something that levels the playing field ... that the African American and Hispanic and other communities are represented in this new development," N'Namdi said.

Mayor Mike Duggan's office appears to agree. A new fund using private capital supports minority small-business owners who primarily employ minority employees. Another program, fueled with private and public funds, pairs tenants and small business owners.

"We need to make sure that everyone benefits from the recent investment in Detroit," city spokesman Dan Austin says. "And part of that is ensuring that the business owners who have been here can compete."

There also are efforts to make the changing city more affordable for residents.

Any project that receives discounted land, tax abatements or similar benefits must reserve at least 20 per cent of its units at a rent that is affordable to people earning 80 per cent of the area's median income or less about $21,000 in Detroit zip codes.

The new Rainer Court apartments on the fringes of Detroit's Midtown are in a neighbourhood that is undergoing a revival. The $450 million, 20,000-seat Red Wings hockey arena is expected to open nearby in 2017. The project includes a 45-block entertainment district.

The one- and two-bedroom Rainer Court apartments have new appliances, hardwood floors, and rents from $850 to $1,300.

LaShawn Thomas, 28, who has lived in the area most of her life says she couldn't afford to live in Rainer Court.

She pays $970 per month to rent her three-bedroom apartment. Three years ago it was $750.

"It's too much," Thomas said. "If you move out of this area and try to come back, it's going to be too late. You're not going to be able to afford it."

As for Farhoud, he's keeping his store at Eastern District Market, paying $2,000 rent on a month-to-month lease until something better comes along.

"When you're in business, you're in it to make money," he said. "You're going to look for something affordable."