MSU Extension

Amidst the housing crisis of the past several years, certain housing types have fared better than others. Housing types that have fared well include those one might find in more walkable urban environments, including courtyard apartments, live/work units, townhouses, multiplexes and duplexes.

For many cities across the country, however, these housing types are few and far between; they have even been referred to as the “missing middle” by urban planners and real estate professionals. The opportunity, then, for many cities and developers is the redevelopment of brownfields into medium to high-density housing and the renovation of existing buildings for residential use, referred to as residential infill.

The U.S. Environmental Protection Agency’s Smart Growth Program released a new report on December 19, 2012 – “Residential Construction Trends in America’s Metropolitan Regions: 2012 Edition” – that examines residential construction trends over the recent past. The report finds that nearly three out of four large metropolitan regions saw an increased share of new housing development in previously developed areas during 2005 to 2009 compared to 2000 to 2004. The report concludes that infill housing “…can help to expand housing choices, make neighborhoods livelier, increase the tax base, safeguard rural landscapes, reduce infrastructure costs and protect natural resources.”

It’s not just large metros that are experiencing increased demand for infill housing though. Michigan cities and towns of all sizes are capitalizing on the demand and working with downtown building owners to turn once abandoned upper stories into apartments, condos and lofts. Key partners for such projects include the Michigan State Housing Development Authority and the Michigan Economic Development Corporation.

Issue Media Group recently published an article titled “Upper Floor Housing Rehabs Spur Neighborhood Growth” as part of a special report exploring infill housing successes in Detroit’s Eastern Market, Portland and Manistee, Mich. Other towns across the state that have successfully rehabbed downtown housing too including Niles, Howell, Clare, Boyne City, and Iron Mountain (to name a few) through the Michigan Main Street Program.

What’s all the interest in infill housing? As it turns out, huge demographic changes are fueling a “back to the city” movement nationwide. According to “The Decade of Calamity: Demographic & Economic Drivers to 2020” by Arthur C. Nelson, households without children will dominate the demand for new housing in the coming years and nearly half of that demand will be seniors of the Baby Boom generation.

Nelson reports in “Leadership in a New Era: Comment on ‘Planning Leadership in a New Era’” that households without children are expected to increase from 52 percent in 1960 to 67 percent in 2000 to 72 percent in 2025. When seniors move, 80 percent vacate single-family houses, but only 41 percent of those seniors move into single-family units while 59 percent move into multi-family buildings.

According to Richard L. Florida, author of “Cities and the Creative Class,” for the other large demographic without children that’s driving the housing market – the Millennials – the trend is also towards more walkable, urban living environments. Other factors, including the falling rate of homeownership are also at play. Nelson explains that homeownership is predicted to be as low as 60 percent by 2020, down from the all-time high of 65 percent in 2005.

While the rising demand for walkable, urban housing options equates to falling demand for drivable, suburban ones, there will still be families desiring the space and privacy provided by detached single-family homes on large lots. As the housing crisis shows us though, as a state and nation we have considerably overbuilt the supply of detached single-family homes. For Michigan communities with extensive urban infrastructure that remains underutilized, the housing crisis also shows us that there is tremendous potential for infill housing to help breathe new life into our downtowns.

Michigan State University Extension is working with the Michigan State Housing Development Authority, the Michigan Municipal League and other statewide agencies on a coordinated project called the MIplace partnership – a statewide initiative with the purpose of helping Michigan communities learn more about and implement Placemaking as an economic development strategy.