Nearly half of Detroit seniors spend at least 30% of their income on housing costs − even as real estate values fall

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Amanda Nothaft, University of Michigan

(THE CONVERSATION) For Detroit homeowners over 65 who overwhelmingly live on fixed incomes, unexpected costs – increases in grocery prices, rising health care premiums or an emergency repair – heighten their risk of financial instability and can even lead to them falling into poverty.

I am a policy researcher at Poverty Solutions at the University of Michigan. Our initiative uses action-based research, an approach that seeks to understand real-world problems and inform policy changes that could make life work better for people with low incomes. The center recently examined data from the 2023 American Community Survey to explore how low-income seniors in Detroit are affected by declining housing values and high housing costs compared to seniors across Michigan.

Federal, state and local programs to help seniors with these costs are already strained. As the population of older adults in metro Detroit continues to grow, demand for support services, such as caregiving and healthy meal programs, will likely increase.

Housing cost burdens are more acute for Detroit seniors

The poverty rate of senior-headed households in Detroit is nearly twice as high as the rate statewide.

Detroit seniors, both owners and renters, are more likely to be housing cost-burdened than Michigan seniors overall, with 45% paying more than 30% of their income on housing costs compared to 31% of seniors statewide. This is partially driven by lower median incomes in the city compared to the state.

Even when we focus on the seniors who would be considered the most financially stable, those who own their homes free and clear, the proportion burdened by housing costs is twice as high as the state: 32% versus 16%.

Detroit seniors pay more for property taxes and utilities

Lower incomes aren’t the only thing driving the higher housing cost burden. Detroit seniors pay more for all homeownership costs, including utilities – not only as a proportion of home values and income, but also in terms of real costs.

Detroiters face higher rates for auto insurance, and they pay more for utilities, compared to others in the state, adding to a situation where many residents, especially seniors on fixed incomes, struggle to make ends meet.

While the cost of living in urban areas is often higher compared to suburban and rural places, my analysis found that comparative costs for insurance, water, electricity and gas are lower in cities such as Milwaukee and Pittsburgh, which points to systemic issues that might be unique to Detroit.

Insurance and property taxes are also higher for seniors in Detroit compared to seniors across the state, especially relative to median home values. Detroit seniors pay the same or slightly more for these essentials despite living in homes that are worth less, based on the analysis.

The median house value for senior property owners in Detroit is $65,000, compared to $170,000 for seniors in Michigan.

High property taxes and insurance rates drive costs

Detroit lost over half a million residents between 1980 and 2020, causing an oversupply of single-family housing stock and a steady drop in home prices.

As residents left and businesses followed, the property tax base eroded. To generate the same revenue as cities with a richer tax base, Detroit levies property taxes at relatively high rates. Detroiters face a property tax rate close to 3%, significantly higher than the national average of 1.38%.

The housing market in Detroit has seen such large declines in property values that a disconnect has emerged. The replacement cost of a home, which is the actual expense required to reconstruct the dwelling, is often substantially higher than its current market value. This makes the cost of homeowner’s insurance disproportionately expensive relative to the market value of a home in Detroit.

A property’s condition and the condition of neighboring properties also raises the cost of homeowner’s insurance because insurance premiums are primarily influenced by the risk associated with insuring a property. Poor property and neighborhood conditions limit the availability of homeowner’s insurance, driving those who want homeowner’s insurance to purchase costly policies from insurers of last resort, or companies that provide coverage to people who cannot obtain it through other means due to high insurance risks.

The high cost drives many Detroit residents to forgo homeowner’s insurance. According to my analysis, almost 35% of Detroit seniors do not insure their homes, putting their main financial asset at risk.

Big utility bills

Utility bills in Detroit are higher compared to those statewide for two reasons: higher use and higher rates. The housing stock in Detroit is significantly older, with 88% of Detroit seniors living in houses built before 1960, compared to 34% of seniors in the rest of the state. These older homes use more energy because they often lack modern insulation and have single-paned windows, outdated appliances, older plumbing fixtures and poor seals around windows and doors.

Detroiters and others in Michigan served by DTE Energy, a utility provider, pay gas and electricity rates that are higher than others in the state. Detroiters also pay more for utilities due to a 5% “utility users tax” added to their gas and electricity bills. This surcharge isn’t new. It stems from legislation originally passed in the 1970s, and the funds collected flow to the Public Lighting Authority, which is responsible for improving and maintaining street lights in the city, and to the Detroit Police Department.

In the wake of Detroit’s bankruptcy filing in 2013, the Detroit Water and Sewerage Department carried out widespread shut-offs. From 2014 to 2020, the shut-offs affected as many as 141,000 Detroit residents, mostly those with low incomes. The crisis garnered national and international attention.

The initial crisis has passed, yet the cost of water continues to increase across the entire state, with those in the metro Detroit area served by the Great Lakes Water Authority seeing substantially higher rate increases than the state overall to cover deferred maintenance and infrastructure costs.

Costs are compounded by social isolation

Costs stemming from isolation and disability exacerbate the financial strain Detroit seniors already face.

Several factors contribute to older adults living alone, including increased life expectancy for women as well as children and family members moving farther away from each other. Older adults living alone are also more likely to be poorer than older adults who are a part of a larger household.

This issue is more pronounced in Detroit, where 54.7% of seniors live alone compared to the 43.2% statewide average. Living alone increases the risk of social isolation, which is linked to poorer health outcomes. Detroit seniors also have higher rates of disability than other seniors in the state of Michigan, which can lead to higher health care costs, decreased mobility and increased social isolation.

Less funding could create more hardship

Historically the demand for support outstrips the available resources, with only a small proportion of eligible households receiving energy assistance. And now, programs that help vulnerable seniors with the costs of utilities are at risk of funding cuts.

Detroit Water and Sewerage Department’s Lifeline Plan, launched in 2022, ran out of state and federal money in October 2025.

Meanwhile, the entire staff that administers the federal Low Income Home Energy Assistance Program, known as LIHEAP, was cut in April 2025. While the program is funded in the continuing resolution passed on Nov. 12, 2025, it is zeroed out in the president’s fiscal year 2026 proposed budget.

Even before funding uncertainties emerged, Detroit seniors who own their homes faced institutional barriers accessing property tax relief, putting many at risk of tax foreclosure. Additionally, Detroiters struggle to keep up with home repair costs, heightened by the needs of older homes and because the home repair assistance system is fragmented and difficult to access.

Without these programs, Detroit seniors will be left without an essential lifeline.

This article is republished from The Conversation under a Creative Commons license. Read the original article here: https://theconversation.com/nearly-half-of-detroit-seniors-spend-at-least-30-of-their-income-on-housing-costs-even-as-real-estate-values-fall-268075.