The big news last week was the latest Census data for 2023 showing an uptick in Detroit’s population.
I have been waiting for this since I started investing in Detroit in 2019.
In fact, I even had a draft post on my old blog titled, “You Can Count On The Headlines”, where I planned to talk about the inevitable day when Detroit experiences a population uptick.
While I never got around to writing the post, it didn’t stop me from talking about it a lot.
I saw what was happening on the ground. And I experienced about half of my tenants moving into the city from out-of-state or from the suburbs. It was plain as day to me that Detroit was growing.
In fact, the third blog post I ever wrote here was about why Detroit’s population decline doesn’t matter.
It’s worth a read.
Needless to say, I am not at all shocked that Detroit’s population is growing.
That doesn’t necessarily mean everyone sees it as the major win that I do. Yes, there are headlines. And yes, this is a gargantuan shift in trend.
But is it enough to sway the population growth obsessive crowd?
Is Detroit’s Population Really Growing?
It’s completely clear that Detroit’s population is no longer declining. But does that mean it’s growing?
That’s really going to depend on what you consider “growth” and whether you’re an optimist, realist, or pessimist.
Skeptics will point to a couple things that are worth mentioning.
First, Detroit’s population increased by just 1,852 people in 2023. That’s about 0.30%.
While it’s a big deal to reverse 60+ years of decline, I can understand why some might not be impressed.
The other point is that this is just ONE year.
I’m hugely bullish on Detroit’s growth potential and believe it will continue, but I also understand that one year does not make a trend.
I’d like to see multiple years of population growth, ideally at an increasing rate, to really be able to say Detroit is officially growing.
That’s completely reasonable, and I don’t mean to make light of what Detroit has accomplished.
Reversing a population decline of this magnitude is no small feat, and I firmly believe it’s just getting started.
So let’s take a look at what’s working.
Understanding Why Detroit’s Population Reversed
While it’s easy to look at the small bump in Detroit’s population, it’s important to understand what’s going on below the surface.
Beyond all the revitalization and investment efforts, why is Detroit suddenly seeing a reverse of its population decline?
The Census Was Indeed Miscounting Population
For starters, it turns out Mayor Mike Duggan wasn’t simply blowing hot air when raising a stink about the Census’ methodology.
In fact, the Census Bureau was removing two people in their population count for every abandoned home Detroit demolished.
That seems pretty backward!
And you can imagine the impact this has had on Detroit’s “official” population.
It’s hard to find exact figures on demolition counts, but Detroit started demolishing homes in 2014 and has completed 6,000 demolitions since 2020:
If Detroit’s population count was only readjusted back to 2020, it’s curious to think what the data might look like if demolitions weren’t incorrectly attributed going back to 2014.
You also have to ask yourself… if the Census Bureau was making such an obvious error here, where else might their methodology be sorely lacking?
People Are Likely Moving Into Detroit From Neighboring Suburbs
A trend I talk a lot about is residence moving into Detroit from bordering suburbs.
Redford, Warren, Dearborn, Dearborn Heights, and many others are all on the border of Detroit. As prices in these suburban towns have moved higher, Detroit has become increasingly attractive.
While people weren’t willing to make the jump into Detroit before, the city has improved enough where it’s making sense to a lot of folks.
Look at the population changes for suburbs on the Detroit border:
Nearly every one of these towns experienced a population decline over the past year.
Detroit is the clear standout. And when we look at the change since 2020, Detroit is by far the strongest of the bunch.
This is a theme I’ve been pounding the table on and one that is likely just getting started.
People continue to move from the bordering suburbs into Detroit city limits. This is huge, and a precursor to what I believe will ultimately be out-of-state migration into Detroit.
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Why Counting Population Matters For Detroit
So why all the fuss about Detroit’s population, anyway? There are three main reasons I care about it.
The first is purely narrative driven. If Detroit is unequivocally growing, it becomes increasingly hard to talk poorly about the city or write it off.
Whether we like it or not, narratives drive behavior. So changing how people view Detroit is important.
Second, population count is important because it is directly tied to Federal funding. The more people in Detroit, the more funding the city receives (and vice versa).
I want as much money flowing into Detroit as possible. Without official population growth figures, the city is working against a headwind.
That may no longer be the case!
Finally, many real estate investors are not savvy. They aren’t great at spotting trends before they’re obvious.
One of the most widely used real estate investing market selection tools is to initially filter by population growth. Investors think they MUST invest where the population is increasing.
While I get the idea behind this, I also know it’s overly simplistic. If I’d thought like this I would have never touched Detroit back in 2019.
But now that Detroit’s population is on the rise, we will likely see more investor eyes on the city. This will be especially true if we start stringing together several years of population growth.
That means more money coming into Detroit, improved housing stock as investors take on rehab projects, and higher prices.
That’s fantastic for all of us that have been actively investing in Detroit for years.
I’m here for it!