Making a Home for Tomorrow's Ann Arbor Today - Part 1

List after list after list reminds us that for many people in many age groups, the answer to the question, "Where do you want to live?" is Ann Arbor. With so much apparent demand to live here, however, a question to prospective residents that is less pondered is "Where do you want to live once you're here?"
Studies tell us that Millennials, the largest generation in American history, want to live differently than their Boomer parents. They want to live in more urban environments, more walkable neighborhoods, and are putting off homeownership. Does that mean they want to settle into renting downtown high-rise apartments for the long haul? Or are they suburban homeowners in transition, making the most of their time in apartments as they slowly save for down payments amidst an unprecedented mountain of student loans?
As the oldest Millennials turn 30, the answers to these questions are more pressing in Ann Arbor than ever. These are our new residents; our future townies. Are we ready for them? If we're assuming their desire to live here exists, can we just assume they're able to find the right housing once they arrive?
For Kristin Bernstein, an Ohio-native who moved to Ann Arbor this year via Minneapolis for a University of Michigan Hospital fellowship, the second assumption would not hold. Her nine-month search for housing included 15 apartment viewings, two waiting lists and a number of compromises.
"After coming from a big city like Minneapolis, I expected my rent to plummet," says the 24-year-old. "I have two bedrooms now [instead of one], but I pay double. There is just so much more housing in Minneapolis, and things that are right downtown."
Bernstein settled on an apartment complex near E. Stadium and Packard, which she chose for its proximity to downtown. She considered buying a condo, but with no options below $150,000 and a two-year fellowship, she was shy to commit - especially considering the recent housing crisis. She does hope to stay in Ann Arbor beyond her fellowship, however, and views homeownership as her ultimate goal.
Bernstein may not perfectly fit the theoretical profile of a Millennial determined to perpetually renting in the bustling downtown center, but the fact is, she might have chosen that option for the time being if she could afford it. 
"I looked at one of the brand new complexes downtown, which was $2,200 a month. I was like, jeez, I'm making fine money, but I know I don't make quite that much," she says. "Coming right out of grad school, I'm not sure who they're expecting to sign up to live there." 
If anyone has a read on who is moving into Ann Arbor and what they want, it's Dug Song. The co-founder & CEO of Duo Security, as well as founder of the Tech Brewery and a2geeks, Song has long been on the front lines of recruiting talent to Ann Arbor. 
"It's been a real challenge," he says. " A lot of people want to live by the office and near downtown," he says. "Downtown has a more obvious community for them to be a part of."
And while the jobs he's offering those potential residents are good-paying jobs with lots of room for growth, he shares Bernstein's feelings on the price range of the expensive, "young professional" developments coming to downtown.
"Luxury apartments are not helping anybody," Song says. "Density is good, but I'm as much of a critic of high-rises as anybody. I don't think it was done with a long-term consciousness of who is going to fill those buildings."
True to Bernstein's goal of homeownership, Song says his employees are looking for a mix of housing. Some do want single-family homes with land. But in order to offer them a variety of options, not only do downtown living options need to expand, so do the commercial options for his growing business. And if he can't continue to grow the way he wants in Ann Arbor, he may have to grow elsewhere - even if he would rather stay.
"My focus is on mixed development," he says. "You have to have growing tech companies like us [on the lower floors of residential buildings] to subsidize the rent. We're happy to pay the $20-plus commercial rent downtown in order for [our employees] to live there. That's the kind of thing they would like to see."
Will they get the chance to see it? It's hard to say. According to city councilperson Steve Kunselman, there's not much city leaders can do to force the market to produce such results. 
"When we get into the middle market and grad students," he says, "I think there is a natural distribution of that clientele. It's purely market driven. I know there are a lot of people who decide to move to Ypsilanti, if they don't have kids. It's natural selection of ability to pay and where you want your kids to go to school."
Song suggests that perhaps relying purely on market forces isn't quite enough to achieve the best results, pointing to a city like Grand Rapids, which has embraced a dense, urban core. 
"Of course it helps to have a lot of private investments," he says, "but they have a very conscious vision for what they want that city to become. In Ann Arbor there are a lot of smart people running in a lot of different directions."
Kunselman would like to focus more on single family housing stock, suggesting the city buy up foreclosed residential lots and hand them over to Habitat for Humanity to rebuild upon. Despite those urban living studies, the suggestion may be warranted in some respects of what in-coming residents are hoping to see - even if contradictory in others.  
Maura Fulton grew up in Ann Arbor, and was therefore not overly surprised by the housing options available when she and her partner decided to move back to the area this year after living in Boston and San Francisco. Similar to Bernstein, they found a $1,200 two-bedroom apartment near, but not in downtown, but their unit is the bottom half of a duplex. Also similarly to Bernstein, they eventually plan to buy a house. 
"One of the advantages to me is to save some money, pay off student loans and live comfortably and affordably," says Fulton, who says she specifically looked for a house over an apartment complex. "In both [Boston and San Francisco] we found really charming places in a divided house."
Charm was as important to Fulton, 28, as being within walking distance of downtown was. It bears mentioning that even though their current housing is temporary, Fulton and Bernstein, like many Millennials, had fairly specific expectations for their rental housing. Even if their eventual plans to buy will have them looking toward those residential neighborhoods, their current conditions are important to them today.
"Mulberry Row [near Packard and Stone School] always has leasing signs out there," says Kunselman, who is skeptical of the need for more downtown housing. "It's four miles from downtown Ann Arbor. Do you have to be right downtown across form the 8 Ball?"
For now at least, it seems Bernstein and Fulton would answer, "yes." And even as they look toward homeownership, as many of their Millennial friends and peers say they are, proximity to downtown remains a priority in their aspirations, and urban condos aren't out of the question - if only they weren't out of their price range.
"I think it all honestly falls along generational lines," says Song. "There are definitely folks who are happy to see change and growth and progress in the city. But there is a big contingency of folks in Ann Arbor who are happy to see things stay they way they are."
When it comes to being ready for the next wave of Ann Arbor residents, it seems - in terms of aspirations and ideas, anyway - the bag is mixed. Whether differing ideas on that front even matters seems to ride on another point of contention, which is whether or not anything can be done about it, or if we're just to wait out the market to see what materializes. Given the propensity of highly mobile Millennials to not wait around for anything, we may not have to wait long.

Next week we'll continue this story with a look at current trends in rental housing and what's being done to accommodate that market on the local level.

Natalie Burg is a freelance writer, the development news editor for Concentrate and Capital Gains, and a regular contributor to Metromode.

All photos by Doug Coombe

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