Some in Detroit fear recovery is pricing them out

Detroit — 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.

“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.

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 the under-construction hockey arena and entertainment district just north of downtown Detroit. Work also just 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.

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 percent since he bought it in 2013.

Bedway’s grandfather and father worked in the market’s butcher shops in the 1930s and ’40s, and his family has run a store there since 1967. He says he now wants businesses in the market that fit his vision for the sought-after site.

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

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.

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 percent of units at rent that is affordable to people earning 80 percent 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 neighborhood 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 for 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.”