The city of Dearborn, Michigan, is experiencing a housing demand surge that could absorb 3,500 new residential units over the next decade, according to a recently completed market study. This demand comes as the city implements a comprehensive economic development strategy that prioritizes green technology while rejecting traditional industrial expansion.
These initiatives are overseen by Angela Fortino, Deputy Director of Economic Development for the City of Dearborn, in collaboration with the appointee, Director Jordan Twardy. Under Mayor Abdullah H. Hamood’s administration, which began in 2022, the city consolidated four separate departments into one 70-person economic development team, growing from 30 to 70 employees over three years.
“We can absorb 1,500 units in the next 10 years easily, we could use them now today,” Fortino explains. “On top of that, we could confidently absorb an additional 2,000 units, bringing the total to 3,500 units.”
Dearborn’s housing challenge stems from its historical development patterns. The city consists primarily of single-family homes, with 73% of the housing stock built before 1959. This aging infrastructure creates both challenges and opportunities for developers and investors looking to enter the market.
The demand profile reveals specific market segments with strong potential. Studio and one-bedroom units show particular promise, whether configured as townhomes or apartment complexes. Even one-bedroom houses are in demand, driven by young professionals who grew up in Dearborn and want to begin their careers there.
“There are a lot of people who grew up there, they want to start their careers there in the city, and so they want that true starter home very early on,” Fortino notes.
Multi-generational housing represents another significant opportunity. Dearborn hosts one of the most dense Arab American populations in the country, creating demand for housing that accommodates extended families. “What does that look like, allowing different stages of life occurring on the same property,” Fortino asks, pointing to accessory dwelling units as one potential solution.
The city’s approach to spurring development goes beyond traditional zoning updates. Dearborn has allocated millions of dollars for direct business investment through programs like Dearborn Forward and the Warren Transformation initiative. These programs provide up to $200,000 per business, including architectural services and construction administration.
“We are giving up to $200,000 per business in the Warren Corridor with architectural services and construction administration pre-built in, and then we are helping them secure qualified contractors,” Fortino explains. The city acts as a quasi-owner’s representative, allowing business owners to focus on operations while the municipality manages renovation projects.
The Warren corridor project exemplifies this comprehensive approach. Beyond business grants, the area will benefit from a $30 million federal Safe Streets grant to reimagine an eight-to-nine-lane commercial corridor that serves industrial, commercial, and residential uses.
Dearborn is embracing adaptive reuse as a solution to both housing demand and changing commercial real estate dynamics. The city recently updated its form-based code to accommodate the ceiling height differences between office and residential uses, removing regulatory barriers that previously complicated conversions.
“We were very successful in updating our existing form-based code to allow taller ceiling heights,” Fortino says. The changes addressed calculation issues where residential height requirements conflicted with floor area ratio limits.
The concept initially faced skepticism but has gained acceptance as stakeholders recognize the potential for downtown areas to expand beyond restaurants into mixed-use developments.
Dearborn has taken a firm stance against traditional industrial expansion while welcoming green technology companies. This policy stems from the city’s commitment to “health in all policies,” a core value that influences everything.
“We have some of the highest asthma rates in the state, and it’s because of industry, refineries and shipping that are happening,” Fortino explains. The city actively rejects logistics companies and traditional manufacturing while embracing clean technology firms.
This approach extends to environmental remediation. As old industrial buildings go offline, the city purchases properties to clean soil, conduct remediation, and create green buffers to protect residential neighborhoods.
“We’ll say no to a logistics company, but to a clean manufacturing facility, we’ll talk,” Fortino states.
Dearborn’s business environment has produced notable franchise success stories, particularly in the coffee sector. The city claims to be the “coffee capital” with over 35 unique coffee roasting and cafe businesses. Many leverage family connections to source beans directly from Middle Eastern countries like Yemen.
One local coffee entrepreneur launched in 2021 and has since opened over 30 franchise locations nationally, with approximately 50 more planned. This success pattern extends beyond coffee to restaurants that have figured out scalable business models and seek national expansion.
“That’s a great example of our under-the-radar situation where people can not only look at what investments they can make into the city and get on deals, but also exporting our talent in that way is extremely beneficial for all of us,” Fortino notes.
Current development activity includes what Fortino calls “accidental developers,” successful local professionals who have purchased large parcels from Ford Motor Company as the automaker sells property in its birthplace. These individuals seek partnerships with national commercial experienced developers to realize their projects.
One such project involves a mix of single-family homes and townhomes. The successful Smart Town development, adjacent to Fairlane Mall, has attracted professional athletes relocating from neighboring counties, drawn partly by the location’s proximity to Detroit International Airport.
The next phase of Dearborn’s development strategy focuses on execution of targeted projects after three years of planning and capacity building. In the meantime, the city is continuing to update the long-term master land use plan while finalizing zoning ordinances to facilitate the housing development needed to meet demand.
For real estate professionals and investors, Dearborn presents a unique opportunity: a market with quantified housing demand, municipal support for development, updated regulatory frameworks, and a clear vision for sustainable growth. The combination of immediate housing needs, adaptive reuse potential, and green industry focus creates multiple entry points for different investment strategies.
The city’s approach demonstrates how municipalities can actively shape development outcomes through strategic policy decisions, direct investment, and comprehensive planning. As Dearborn moves from planning to execution, the market opportunity for aligned investors and developers appears substantial.
Angela Fortino can be reached through the City of Dearborn’s Economic Development Department for more information about development opportunities and municipal programs.
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