Who owns rental housing in Detroit? New report offers glimpse

·6 min read

The vast majority of landlords in Detroit own one or two properties, making up about half of the units in the city. But most are not registered within Detroit's formal rental system.

And one-third of the rental housing stock is run by a small number of landlords with five or more properties, according to a new report.

Detroit is a majority renter city but information like how many rental properties there are and who owns them is limited, leaving gaps when it comes to improving housing conditions and reducing lead exposure from paint.

An analysis released Wednesday by the think tank Detroit Future City sheds some light on the city's rental and landlord landscape, as tenant advocates raise concerns about rising evictions and unaffordable housing as pandemic-era rent assistance dries up.

More: Millions of dollars in rental assistance drying up — and could bring evictions in Michigan

More: Detroit home repair program gets $15 million to fix more roofs, windows

"The idea is that if we can figure out better ways to support landlords in becoming compliant, we can then support them in providing this healthier housing," said Ashley Williams Clark, vice president and director of the Detroit Future City's Center for Equity, Engagement and Research.

The report was compiled by Detroit Future City, Data Driven Detroit and Detroit's Housing and Revitalization Department. It breaks down landlords into categories based on assessed value of the property, corporate ownership, blight violations, taxpayer's location, property acquisitions and number of units they own.

Here are some key takeaways:

  • Of Detroit's 42,191 landlords, 87% own one or two properties.

  • Just under 6,000 landlords have at least one property registered, meaning that roughly 36,000 are not registered.

  • Among the largest group of landlords — those who own one or two properties that are predominantly single-family housing — only 2% have registered properties.

  • Despite making up 5% of landlords, one-third of the city's rental housing is owned by landlords who have five or more properties. This group, which has a high rate of corporate ownership, also is more connected with the city's rental housing system by being registered. Working with this group could be a chance to improve rental housing, authors note. Sixty-six percent have filed an eviction in the past two years.

  • 64% of properties are owned by landlords with a Detroit address and 87% have a Michigan address.

  • Landlords are renting out housing constructed before 1940. Older housing is more likely to have lead hazards from paint.

  • There are an estimated 137,346 rental units in Detroit.

Edward Lynch, a senior program manager and report author, said the majority of Detroit landlords are not big corporate owners. This may be someone who bought the house next door or who has one or two properties starting out, he said.

"There is such a high percentage of the rental landscape that is owned and operated by what we'd call the 'mom-and-pop' landlord," said Keegan Mahoney, a program director in the policy and implementation division of Detroit's Housing and Revitalization Department.

Detroit's shift to a majority renter city is still fresh, and how the city navigates the development of policies and programs depends on the housing stock itself and who owns properties, he said.

As of 2015, renters outnumbered homeowners in the city for the first time since 1950. That's according to a 2017 report from the Detroit Future City.

"It's essential for the city of Detroit to regulate, track and enforce rental property codes and standards. It's necessary for the health, safety and protection of all Detroit residents. It's something that the city's been struggling with, but it's essential to do. Landlords registering helps protect tenants in the long run," said Tonya Myers Phillips, project leader for the Detroit Right to Counsel Coalition, a group that mobilized to get free lawyers in court for low-income Detroiters facing eviction.

Under the city of Detroit’s rental ordinance, landlords must keep their properties safe by registering them, passing inspections, getting a lead clearance and not have any outstanding fees with the city’s buildings, safety engineering and environmental department (BSEED) or blight violation tickets. These steps lead to a certificate of compliance.

Registration is done online and free, but inspections cost money. Initial inspections can run anywhere from $150 to $4,350 depending on the size of the home or building, according to BSEED. The price tag for a lead inspection — which is done by independent companies and is based on square footage — may be between $500 to $700 for a single family home, and any follow-up assessment can range from $300 to $500, a landlord guide notes.

As of Friday, there were 7,543 certificates of compliance. There were 3,753 in 2019; 4,346 in 2020, and 5,929 in 2021, according to BSEED.

A June report from the University of Michigan Poverty Solutions initiative found that 89% of eviction cases filed in Detroit during the pandemic lacked a certificate of compliance. And as of mid-March, of the rental properties the report looked at (which is a different amount than the Detroit Future City analysis), about 6% had a certificate of compliance.

BSEED officials last month told the Free Press that the department does inspections after complaints and issues correction orders if inspectors find code violations. The department is identifying noncompliant landlords and doing enforcements in one- and two-family properties. It now accepts a HUD inspection and is working with landlords to educate them about the compliance process. ​​​​​

“By better understanding Detroit's rental landscape, we can work with our sister departments, City Council, landlords, and others to bring rental properties into compliance," BSEED director David Bell said in a statement Friday.

The report offers an overview of Detroit landlords. However, Lynch cautioned that it doesn't delve into particular landlord's practices, like if they have blight tickets, he said.

Although landlords should be offering a healthy place to live, compliance with current regulations can be financially difficult because of a combination of strict rental requirements, low property values and the low rent at substandard properties, Clark said.

The city recently announced a $5 million repair program for landlords, backed by federal pandemic relief aid, to bring more than 1,000 rental units up to code.

The program will include dollars to turn vacant second-story apartment units within commercial corridors into housing, plus trainings and matching grants to bring units up to code.

The city is in the procurement phase, city officials said, so the program's exact launch date is uncertain.

When homes aren't registered, it's unclear whether lead hazards are removed, said Leonymae Aumentado, a project manager at U-M Poverty Solutions. The stakes are high, too, because the vast majority of homes in Detroit were built before lead-based paint was made illegal, she said.

"Landlords are an incredibly important part of the larger ecosystem of lead hazard removal in the city," Aumentado said.

Nushrat Rahman covers issues related to economic mobility for the Detroit Free Press and Bridge Detroit as a corps member with Report for America, an initiative of The GroundTruth Project. Make a tax-deductible contribution to support her work at bit.ly/freepRFA.

Contact Nushrat: nrahman@freepress.com; 313-348-7558. Follow her on Twitter: @NushratR. Sign up for Bridge Detroit's newsletter. Become a Free Press subscriber.

This article originally appeared on Detroit Free Press: Who owns rental housing in Detroit? New report offers glimpse