Residential building permits fell 15 percent in 2018 in the Detroit area, according to the Southeast Michigan Council of Governments (SEMCOG), ending a slow, steady climb since the housing market tumbled in 2006.
Housing construction serves as a main driving force for the southeast Michigan economy but the SEMCOG report released today offers few highlights.
Single-family home construction fell by 11 percent compared to 2017 and building permits for apartment units plummeted by 27 percent. Condominiums showed an uptick with a 16 percent increase in the seven-county SEMCOG region, though they represent a small portion of the overall market.
“Rising material and labor costs, a shortage of skilled laborers, and higher land costs contributed to a slower construction market in 2018,” said Janet Mocadlo, regional development planner for SEMCOG.
Since the region’s housing market stumbled in 2006 due to the start of the mortgage foreclosure crisis and bottomed out in 2009, the industry has accomplished a slow, steady climb, reaching 12,207 Detroit area building permits in 2017. That marked the first time the ’06 numbers had been eclipsed. But the total for last year fell to 10,324 permits, a disappointing step back.
Southeast Michigan serves as the epicenter of the state’s home building industry but experts see limited evidence of a statewide rebound this year. The Home Builders Association (HBA) of Michigan issued a cautious projection last December of a 3 percent increase in Michigan housing construction for 2019.
“While it is encouraging to note that we are at the highest levels in 12 years, the (projected) low, single-digit percentage increases mean that Michigan’s critical housing industry is lagging behind general economic growth in our state,” Bob Filka, CEO of HBA Michigan said at the time. “The 17,000 plus units we expect to build (in 2019) is well behind our historical highs, and well behind the 26-28,000 units that economists say we should be building to meet long-term housing demand in Michigan.”
As is typical, Oakland and Macomb county builders led the way last year in southeast Michigan, as eight of the top 10 communities for single-family home construction were located in those two counties.
When new condominiums and apartments were added to the mix, Detroit led the region in overall building permits, followed by Ann Arbor and Royal Oak. Nearly all of those 736 Detroit permits were issued in the city’s downtown and Midtown areas. However, Detroit also issued more than more than 4,000 demolition permits in 2018 so the city suffered a substantial net loss of housing units for the year.
Here are the region’s top 10 communities for new single-family homes in 2018:
- Canton Township (309 permits)
- Macomb Township (304)
- Lyon Township (203)
- Shelby Township (157)
- Troy (133)
- Orion Township (123)
- Novi (113)
- Commerce Township (110)
- Washington Township (106)
- Chesterfield Township (102) Pittsfield Township (102)