Outside the city limits, planned suburban developments attracted affluent newcomers, many of whom were associated with the prosperous Detroit automobile industry. The first major suburban development was Barton Hills, located north and west of the city in the hills around Barton Pond, which Detroit Edison created to supply its downriver power facility. Initially it became the home of higher income Ann Arbor natives who commuted into town by car. With the completion of new educational facilities and intercity roads, it attracted residents from the west side of Detroit as well. At the end of the decade, its developers, a subsidiary of the Detroit Edison Company, advertised it to a selected clientele as "Detroit's most attractive suburban community." By 1930 increasing numbers of high-income Ann Arbor residents were commuting to work outside the city while low-paid service workers were commuting into Ann Arbor from their homes in nearby communities.

All the new high-income areas featured golf courses to supply the need for exercise among their professional and managerial residents. In some cases, such as Barton Hills, the golf course preceded houses as an inducement to settlement. All the best developments platted golf courses together with housing sites in their promotional literature.

In addition to bringing enormous income and new residents, the building boom brought great numbers of construction workers to the city. By the end of the decade construction projects employed every skilled craftsman in Ann Arbor and its surrounding communities and some from as far away as southern Ontario. In the case of the Law School, workers came from the British Isles. The initial University expansion employed in semi or unskilled jobs factory workers laid off in the slump of 1922-23 and University students on summer vacation. But with the return of industrial prosperity and the spread of construction projects to the private sector, increasing numbers of unskilled and semiskilled workers were imported from elsewhere increasing the crush on available rental housing.

Many of the heavy laborers were African-American. The African-American community was one of the fastest growing elements of Ann Arbor's population, rising sixty-two per cent from 580 to 940 during the decade. Most came to work in construction and stayed to work in the new fraternity houses or as cleaning ladies for Ann Arbor's growing affluent community. By the close of the decade their confinement in Ann Arbor's remaining low-rent districts and their attempts to expand beyond them began to generate conflict in the community.

The movement of construction workers into the city, particularly from rural areas, encouraged the growth of mission and holiness churches, such as the Evangelistic Mission, Gospel Mission, Church of God in Christ, First Spiritual Church of Truth, Free Methodist, and Pilgrim Holiness.

Despite the growth in evangelical Protestant sects, few new churches were built. Many congregations remodeled their quarters, while German-American congregations were the only ones to finance major new construction. St. Paul's Evangelical Church moved from the expanding West Park to a new building at West Liberty and Third, while Calvary Evangelical rose to serve the growing German-American population on the North Side. The Jewish congregation secured its first permanent home, and the Greek Orthodox Church expanded its rented quarters.

Most of the established churches spent increasing amounts of money in serving the University community. The Roman Catholics erected a new headquarters for student work, and by 1925 they and the protestants supported more than a half dozen pastors and secretaries with aid in excess of $50,000 annually. A great interest in religion prevailed at the University. In the early '20's University officials gave serious consideration to starting a School of Religion. From 1925 on, the University opened Hill Auditorium each Sunday to well-attended non-denominational services.

The ethnic mix of the city's inhabitants changed during the '20's. The proportion of native-born Americans rose as the war and new laws ended the great waves of immigration. Affluent newcomers from old-line families, who occupied executive and managerial positions in the automobile industry or faculty and staff positions at the University, moved into Ann Arbor. While the German element remained strong, it diminished in relative importance. Except for the old-timers, the Ann Arbor German community ceased speaking its native language during World War I, but retained its cultural traditions. By the end of the 1920's, due in part to the new immigration laws, English replaced German as the leading language of Ann Arbor's foreign born. Canada supplied most of the immigration since it was exempt from the restrictions of the new laws and was close to Ann Arbor's expanding labor market.