The Boomtown Fallacy

There seems to be an ongoing narrative in Ann Arbor about “growth” and “development” that labels what’s transpired here as something of a boom town, an area of unchecked and rampant development that threatens the very fabric of our community. People see the retail and rooftops at the edges and perhaps most importantly the shiny new buildings downtown and the perception is we are experiencing a period of high growth, particularly in this extended period of economic expansion following the Great Recession.  This has rankled me for some time because here’s the thing: it’s not even close to true.

I pulled data from a number of places to illustrate. One caveat here, the definition of Ann Arbor and the area is different depending on the data source and period of time. For the purposes of this post, I am largely focusing on the city of Ann Arbor and adjacent townships and leaving aside Ypsilanti for now. Thus subject market area is Ann Arbor, Ann Arbor Township, Barton Hills, Scio Township, Lodi Township, Pittsfield Township, and Superior Township, generally encompassed in Zip Codes 48103, 48104, 48105, 48108, and 48109. First, just for a sense of bearing, here is the population for that selected geography:

Year Population 10 Year Growth
1900 20,994
1910 20,656 -1.61%
1920 24,958 20.83%
1930 35,471 42.12%
1940 45,074 27.07%
1950 76,597 69.94%
1960 93,375 21.90%
1970 130,785 40.06%
1980 146,900 12.32%
1990 159,480 8.56%
2000 186,174 16.74%
2010 197,252 5.95%
2020 221,471 12.28%

This data is from SEMCOG and that rosy 2020 number is obviously a projection but let’s say it holds true. The average growth over the last 100 years has been 23.99% per decade, 25.32% since WWII. Thus this decade, while a pickup from the previous 10 year period would still be half the population growth of an average decade. Hardly a “boom town”.

I also looked at development, both across all types and just focused on housing.  Here is housing permit data, also from SEMCOG.

Year Single Family Two Family Attach Condo Multi Family Total Units
2000 850 10 163 63 1,086
2001 708 34 202 287 1,231
2002 624 8 414 120 1,166
2003 733 12 507 56 1,308
2004 646 12 370 217 1,245
2005 456 4 301 101 862
2006 186 12 114 64 376
2007 146 12 228 107 493
2008 93 4 21 100 218
2009 74 6 4 165 249
2010 125 2 35 0 162
2011 121 2 0 321 444
2012 165 4 22 348 539
2013 223 0 78 342 643
2014 202 4 21 440 667
2015 220 4 38 464 726
2016 244 4 66 347 661
2017 214 2 181 487 884
2018 284 0 206 764 1,254
2019 205 36 32 457 730
2000 to 2019 totals 6,519 172 3,003 5,250 14,944

This data is readily accessible in just the last two decades (I will continue mining for further back and will post an update) but it’s obvious that in recent times, current housing permits are no anomaly and certainly down from the early 2000’s, up from the recession.

Here is data compiled from CoStar regarding multi-family properties and year built.

Era All Units Market Rate Units Student Units
Pre-1900 239 217 7
1900-1909 923 791 126
1910-1919 303 271 32
1920-1929 332 229 103
1930-1939 51 51 0
1940-1949 31 25 5
1950-1959 1,221 800 4
1960-1969 9,907 8,188 984
1970-1979 10,926 8,171 494
1980-1989 4,524 3,916 120
1990-1999 3,546 2,717 48
2000-2009 1,599 614 692
2010-2019 2,646 1,080 1,203
Total 36,248 27,070 3,818

Boom town appears to be from 1960 to 1980 here. The only thing that has really picked up is student housing which will be covered in more detail below.

Here is square footage of all commercial properties that CoStar tracks by year built. Again, recent development across the area approaching half of historic highs and down significantly from even recent years.

Era Square Feet
Pre-1900 711,000
1900-1909 1,900,000
1910-1919 364,000
1920-1929 100,000
1930-1939 477,000
1940-1949 736,000
1950-1959 2,300,000
1960-1969 13,500,000
1970-1979 11,700,000
1980-1989 11,400,000
1990-1999 11,200,000
2000-2009 8,300,000
2010-2019 6,000,000

It’s pretty clear from just about any relevant piece of data that Ann Arbor is not experiencing some sort of out-sized development boom. In fact, growth is relatively modest historically, a far cry from even recent times. The 1960’s and 1970’s was a legitimate boom, relatively speaking.

Hub-Ann-Arbor-Content-1.jpg?format=2500w

No analysis would be complete without looking at the one outlier, likely the one driving the conversation the most, that being student housing. Since 2000, there have been 1,842 units of student housing added, representing 5,197 beds. In just the past decade, nine private high-rise student housing projects have been completed in the greater downtown area, dramatically changing the skyline. However, it’s important to note that the university enrollment has grown by 8,613 students since 2000. Even adding in the university’s new dorms, North Quad (450 capacity) and Munger Graduate Residences (630 capacity) there’s still 2,366 more students than beds built over the same time period. Furthermore, all of those developments are walking distance to campus with limited parking and are scheduled to pay annual real estate taxes of nearly $17,000,000(!). In short, if you’re an Ann Arbor resident, those projects are the just about the best thing that can happen, housing students close to campus, keeping cars off the road, and paying boatloads of taxes.

As always, to each his or her own but the data doesn’t lie.

 

8 thoughts on “The Boomtown Fallacy

  1. Great to see this again. But you have conflated the area (including the townships) and the City of Ann Arbor. Much of our current debate is about density within the city itself. We get confused because census data are mostly based on the entire county – but our MSA is named Ann Arbor so there are many statistics floating around out there about “Ann Arbor” which is really about the county.

    I get your point that student population continues to grow and that housing is not really keeping up with it. You have provided a lot of valuable documentation on that score. Also, the perception of growth is certainly related to those ever-increasing tall buildings downtown.

    I’d like to look at SEMCOG to see how they are showing figures from each community. I know we had a lot of growth in townships (sprawl) prior to the financial collapse and it has been reduced since then.

    I think that your perspective is whether development matches demand. Unfortunately, it appears that our demand is bottomless.

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    • Surely you cannot really think demand is “bottomless”. I mean, there is a limited number of people in the world so that’s obviously non-sensical. I think what you really mean is you would prefer we don’t add the amount of housing needed to meet demand because you think it would negatively affect your quality of life or the character of the city. But that’s clearly much different than infinite demand.

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    • How can you say that? This isn’t San Francisco. People dont move here because it’s the cool hip place in large numbers. They move here for jobs and we have those numbers. We have failed to grow adequately in the city itself ad where other jobs are located for the past 40 years. Before that we let the city grow to meet demand and it wa affordable and culturally dynamic. We have a city population of 112k with almost that many driving in to work here every week. If we assume some of those people are living together and some don’t want to live here by choice than we would need to grow maybe 30k new housing units to reach the 10% rental vacancy rate at which housing costs go down, which we absolutely have the room to do, especially if we allow fourplexes and duplexes in the 72% of our residential neighborhoods zoned single family and multiplexes on transit corridors. e would still be smaller than Durham and almost every other city with a major public University. This Ann Arbor is full mentality is Trumpian and its a lie too. There is not bottomless demand and we don’t need a border wall built by resistance to development.

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    • Traffic in and out of the city at rush hour has definitely increased, very likely due to massive employment increases at the university, not sure about general downtown traffic, I don’t have any data on that.

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