Detroit

The zoning would allow it. The appraisal won't support it.

Detroit: photography pending

Supply Scorecard

How Detroit measures up

Supply scorecard: five-metric method
Metric	Value
M1 Permits per 1,000 residents	pending
M2 Median permit approval time	pending
M3 Rental vacancy rate	pending
M4 Median rent-to-income ratio	pending
M5 Share of land zoned single-family	pending

Figures are provisional pending source verification against the Census Building Permits Survey, HUD, FRED, and municipal planning data.

Constraint Diagnosis

Report in research. In much of Detroit, construction cost exceeds post-completion appraised value regardless of entitlement. The constraint is not permission, it’s the return a lender or equity partner requires against what the finished building will actually be worth.

Sources

Where these numbers come from

Every input behind this report's pro forma, and whether it's been checked against a real source yet.

Pro forma input sources for Detroit
Input	Value	Source	Year	Link
Land cost	$450,000	PENDING	N/A	N/A
Hard cost per unit	$195,000	PENDING	N/A	N/A
Soft costs	16.0%	PENDING	N/A	N/A
Permit timeline	5 mo	PENDING	N/A	N/A
Construction timeline	18 mo	PENDING	N/A	N/A
Construction loan rate	10.00%	PENDING	N/A	N/A
Monthly rent per unit	$1,050	PENDING	N/A	N/A
Vacancy & credit loss	5.0%	PENDING	N/A	N/A
Operating expense ratio	43.0%	PENDING	N/A	N/A
Exit cap rate	8.00%	PENDING	N/A	N/A
Required spread over exit cap (drives required return = exit cap + spread)	1.25%	Industry convention for ground-up multifamily; developers in 2026 generally require 6%+ development yield with a minimum 125-150bps spread over exit cap. Practitioner range 125-175bps, with urban-core deals occasionally below 100bps. CBRE notes the historical premium was approximately 200bps and has compressed. This model uses the low end of that range (125bps), matching the developer_spread input in R-01's sourced Washington, D.C. analysis. See also: https://dancap.ca/2025-outlook-real-estate/	2026	View source