Ann Arbor’s Surprising Origins: More Profit Than Passion

Ann Arbor’s real estate market today is all about high demand and low inventory—homes sell fast, prices keep climbing, and buyers scramble for any opportunity. But rewind to 1824, and the real estate game looked very different. Instead of eager homebuyers, the city’s founders were two land speculators looking to flip property and make a quick buck.

Growing up in Ann Arbor, most of us heard the romantic version of the city’s founding—a story about two settlers who named the town after their beloved wives, both named Ann, with “Arbor” as a nod to the beautiful trees throughout our city along the Huron River. But the real story? It’s far less sentimental.

A Business Deal, Not a Dream

John Allen and Elisha Rumsey didn’t come to Ann Arbor with a vision for a great city. In fact, they met on the way here and realized the soon-to-open Erie Canal would make it easier for people to reach Michigan. Seeing a business opportunity, they pooled their money, bought 640 acres of land, and planned to divide it up and sell it for a profit.

To make their investment more attractive, they pushed for Ann Arbor to become the Washtenaw County seat. And it worked—because they were not only willing to offer free land to the government but also promised to build a courthouse, a jail, and a bridge across the Huron River.

Where Did the Name Come From?

Despite their financial motives, the city’s name does have a personal touch.

John Allen’s wife was named Ann Allen.

Elisha Rumsey’s partner was Mary Ann Rumsey.

“Arbor” was likely a reference to the our beloved oak trees that covered the land at the time.

The original spelling was “Annarbour,” but over time, it evolved into the name we use today.

The Founders Didn’t Stick Around

For all their efforts to establish Ann Arbor, neither founder had any real intention of settling in our city.

John Allen was a hustler who kept moving from one opportunity to the next. He eventually landed on the West Coast, where he passed away.

Mary Ann Rumsey disappeared from local history.

Ann Allen didn’t love Ann Arbor and eventually moved back to Virginia, preferring what she considered a more “civilized” life.

A City That Became More Than a Quick Flip

Even though Ann Arbor started as a speculative land deal, it grew into something much greater than Allen and Rumsey ever imagined:

1837: shortly after Michigan became a state, the university relocated to Ann Arbor, thanks to a land grant from the city. Ann Arbor’s founders, John Allen and Elisha Rumsey, had lobbied for the county seat, and they saw the university as another way to boost the town’s growth and value. The city set aside 40 acres—now known as Central Campus—and the university officially reopened in Ann Arbor that same year. The university’s move transformed Ann Arbor overnight from a small settlement into an emerging educational hub.

Population Growth – Students, professors, and staff moved in, increasing demand for housing, goods, and services.

Economic Boost – Businesses sprang up to cater to the university community, from bookstores to boarding houses.

Cultural Shift – Ann Arbor began developing a more intellectual and progressive identity, influenced by academia.

National Recognition – The move put Ann Arbor on the map, attracting scholars and students from beyond Michigan.

By the late 1800s, the university was a driving force behind Ann Arbor’s economy, culture, and reputation—setting the stage for the vibrant, innovation-driven city it is today.

Over the years, Ann Arbor attracted German immigrants, artists, musicians, and progressive thinkers, shaping the city’s unique identity.

Today, Ann Arbor’s real estate market couldn’t be more different from its origins. Instead of investors buying up cheap land to flip, people are fighting to stay here—to put down roots, raise families, and be part of a thriving community.

It’s ironic that a city built by two men looking for a quick profit became a place that so many now call home.

What do you think of Ann Arbor’s history? Drop your thoughts in the comments!