The Detroit Free Press recently published a summary of some of the new rental apartments coming online in and around downtown Detroit. Here’s the map that they published along with their piece:

Based on this article, demand is outstripping new supply and rents are starting to push above $2 per square foot. This strikes me as a solid number given that there are also for sale lots/houses in the city going for $10,000.

Going back to some of the posts I have written about rental apartment development in Toronto, you might remember that $3 psf is roughly our magic number given current cost structures.

In some special circumstances you might be able to get a project off the ground with rents closer to $2 psf, but that’s an exception to the rule. There are many areas in the Toronto region with $2 psf rents and few, if any, new rental apartments.

But Detroit is obviously a different city, as is every real estate market.

Land would be cheaper. Many of these new rental apartments are conversions of existing buildings (which were probably bought for cents on the dollar). And I wouldn’t be surprised if there are tax abatements and other incentives to encourage more development. 

I also wonder if people in the city aren’t being at least partially drawn to multi-family buildings because of the safety and security benefits. That’s something that certainly came up when I was in Detroit last weekend.

Regardless, this is a good news story for Detroit, which is not always the story you hear people telling of the city.

A new startup out of San Francisco, called Rentberry, has just launched, allowing tenants to openly bid on rentals in the city. Think of it like a rental auction. Landlord lists property. And then tenants compete for it by submitting offers. 

Not surprisingly – especially since we’re talking about San Francisco – there’s concern that this will do nothing but drive up the city’s already high rents.

But I think the key detail is that the platform will make public the total number of applicants. As a tenant, it’ll even tell you how your credit score compares to those of the other bidders (presumably, so you can gauge how aggressive you might need to be on your bid).

The real estate industry is rife with information asymmetries. So anything that improves transparency is something that catches my attention. If you’ve ever bought or rented a place in a competitive market, you know that one of the worst things you can hear from the broker is: “We have another offer.” (Even worse: “We have 12 other offers.”)

It’s frustrating because it now means you’re competing. But even more frustrating is the fact that you have no way of assessing whether or not that statement is fact or fiction. Yes, I realize that there’s a code of ethics that’s supposed be followed, but you and I both know that games are played all the time.

In fact, I think someone could easily make a full career out of just trying to correct the information asymmetries inherent in the real estate industry. Who knows what sort of impact they might be having on the market. So I’m excited to see how things pan out for Rentberry.

Here in Toronto there’s a push for more family-sized apartments. That’s what the planners want to hear.

Because the city has been trying to encourage developers to build more of them for years, but the challenge has always been that they didn’t sell or that they took a long time to sell. The market wasn’t ready.

But as I discussed earlier this week, that is starting to change. I think Toronto is reaching a tipping point where low-rise housing has simply become too expensive and people are starting to look to alternatives, mostly at the mid-rise scale.

It’s interesting though that something of the opposite appears to be happening in New York. I don’t know enough about the New York new construction market to really comment on overall unit mixes and sizes, but there definitely seems to be a push to create more affordable micro-units.

Curbed published this last October:

“…a report currently under public review, called Zoning for Quality and Affordability, recommends relaxing density caps and eliminating the 400-square-foot minimum for studio apartments, thereby creating more housing for single people. Almost 50 percent of the city’s population is estimated to be single, but only seven percent of the housing stock is studios.”

And just recently, New York completed its first all-micro-unit apartment building called Carmel Place. Rents start at $2,650 per month for a 265 square foot apartment. 

As a point of reference, that works out to be $10 per square foot per month and more than 3x the highest rents you could reasonably achieve in the more desirable areas of Toronto, today.

The model suite is 302 square feet and looks like this:

All of the above photos are via Curbed.

The Detroit Free Press recently published a summary of some of the new rental apartments coming online in and around downtown Detroit. Here’s the map that they published along with their piece:

Based on this article, demand is outstripping new supply and rents are starting to push above $2 per square foot. This strikes me as a solid number given that there are also for sale lots/houses in the city going for $10,000.

Going back to some of the posts I have written about rental apartment development in Toronto, you might remember that $3 psf is roughly our magic number given current cost structures.

In some special circumstances you might be able to get a project off the ground with rents closer to $2 psf, but that’s an exception to the rule. There are many areas in the Toronto region with $2 psf rents and few, if any, new rental apartments.

But Detroit is obviously a different city, as is every real estate market.

Land would be cheaper. Many of these new rental apartments are conversions of existing buildings (which were probably bought for cents on the dollar). And I wouldn’t be surprised if there are tax abatements and other incentives to encourage more development. 

I also wonder if people in the city aren’t being at least partially drawn to multi-family buildings because of the safety and security benefits. That’s something that certainly came up when I was in Detroit last weekend.

Regardless, this is a good news story for Detroit, which is not always the story you hear people telling of the city.

A new startup out of San Francisco, called Rentberry, has just launched, allowing tenants to openly bid on rentals in the city. Think of it like a rental auction. Landlord lists property. And then tenants compete for it by submitting offers. 

Not surprisingly – especially since we’re talking about San Francisco – there’s concern that this will do nothing but drive up the city’s already high rents.

But I think the key detail is that the platform will make public the total number of applicants. As a tenant, it’ll even tell you how your credit score compares to those of the other bidders (presumably, so you can gauge how aggressive you might need to be on your bid).

The real estate industry is rife with information asymmetries. So anything that improves transparency is something that catches my attention. If you’ve ever bought or rented a place in a competitive market, you know that one of the worst things you can hear from the broker is: “We have another offer.” (Even worse: “We have 12 other offers.”)

It’s frustrating because it now means you’re competing. But even more frustrating is the fact that you have no way of assessing whether or not that statement is fact or fiction. Yes, I realize that there’s a code of ethics that’s supposed be followed, but you and I both know that games are played all the time.

In fact, I think someone could easily make a full career out of just trying to correct the information asymmetries inherent in the real estate industry. Who knows what sort of impact they might be having on the market. So I’m excited to see how things pan out for Rentberry.

Here in Toronto there’s a push for more family-sized apartments. That’s what the planners want to hear.

Because the city has been trying to encourage developers to build more of them for years, but the challenge has always been that they didn’t sell or that they took a long time to sell. The market wasn’t ready.

But as I discussed earlier this week, that is starting to change. I think Toronto is reaching a tipping point where low-rise housing has simply become too expensive and people are starting to look to alternatives, mostly at the mid-rise scale.

It’s interesting though that something of the opposite appears to be happening in New York. I don’t know enough about the New York new construction market to really comment on overall unit mixes and sizes, but there definitely seems to be a push to create more affordable micro-units.

Curbed published this last October:

“…a report currently under public review, called Zoning for Quality and Affordability, recommends relaxing density caps and eliminating the 400-square-foot minimum for studio apartments, thereby creating more housing for single people. Almost 50 percent of the city’s population is estimated to be single, but only seven percent of the housing stock is studios.”

And just recently, New York completed its first all-micro-unit apartment building called Carmel Place. Rents start at $2,650 per month for a 265 square foot apartment. 

As a point of reference, that works out to be $10 per square foot per month and more than 3x the highest rents you could reasonably achieve in the more desirable areas of Toronto, today.

The model suite is 302 square feet and looks like this:

All of the above photos are via Curbed.