Extreme Makeover, Detroit Edition

Abandoned home at Fischer and Warren on Detroit’s East Side.  Source: freep.com

My recent move into gentrification and revitalization has taken me away from events in Detroit.  It’s time to see what’s been going on there.

Bankruptcy

Detroit is moving closer to some sort of resolution in its bankruptcy filing.  The city, state and philanthropic organizations have been working on what’s called the “Grand Bargain” to put in front of city pensioners, who can vote yes or no on the city’s bankruptcy plan, and ultimately before U.S. Bankruptcy Court Judge Steven Rhodes.  The state House approved a $195 million aid package two weeks ago, and the state Senate passed the deal yesterday.  This is to be added to $466 million in private and philanthropic funds that have been raised, all in an effort to keep city pensioners as whole as possible and maintain the city’s hold on its valuable collection at the Detroit Institute of Arts.

The Grand Bargain has generated rare bipartisan support in Michigan, as Republican Gov. Rick Snyder has been pushing those in his caucus to support the measure.  Gov. Snyder has criss-crossed the state pounding the message that economic revitalization and success for Michigan begins in Detroit, and at least legislators seem to be receptive to the message.  There is, however, uncertainty about how city pensioners feel about the deal.  They have until July 11 to vote on the plan, and turning it down would mean the city would have to start on another plan to put before the court.  Pensioners do stand to lose something; general retirees would suffer a 4.5 percent cut to their pension checks and lose all cost-of-living adjustments going forward.  Police and fire pensioners would not suffer cuts to their monthly checks, but would have cost-of-living adjustments reduced by 55 percent.

Blight

The Detroit Blight Removal Task Force released its comprehensive report on the extent of blight, vacancy and abandonment in Detroit.  The report found nearly 85,000 parcels in the city that were either blighted or vacant per their definition, or nearly one-fourth of all property in the city.  You can explore the data on blight and vacancy the supported the report, citywide or by neighborhood, right here.  There are approximately 80,000 blighted structures (remember, a parcel can contain multiple structures), and the going price tag for clearance is $850 million for residential neighborhoods and commercial corridors, and upwards of $2 billion when huge manufacturing or other commercial structures, like the Packard plant, are added to the mix.  That’s an absolutely astounding figure, but the city is doing its best to view the blight as an opportunity.  City, state, federal and private sources are lining up to tackle the blight, and the city has accepted the Task Force’s challenge of eliminating residential blight in Detroit within five years.

Boom?

Meanwhile, even as the city’s bankruptcy moves apace, and the city addresses its serious blight issues, growth in the downtown and Midtown areas is beginning to generate pressures unfamiliar to the city.  CNN recently reported that the businesses that recently moved downtown, like Quicken Loans and Blue Cross Blue Shield, and the city housing subsidies available to their workers, are transforming the area.

Aaron Renn wrote about this last week on his blog, and he asks an interesting question:

“This is a city that simultaneously has a tight housing market with rising prices in Downtown at Midtown at the same time the city is proposing to spend almost $2 billion dollars to demolish about a quarter of its housing stock. There would appear to be ample housing and land available for almost free in Detroit, even in urban Detroit, but the differences in the markets are stark. Why is this?”

Aaron cites an earlier post he wrote in which he detailed how two economies and labor markets, one global and one local, can exist within the same physical geography.  He also acknowledges that Detroit doesn’t have a demonstrably strong global economy, but it’s starting to build one, and that’s creating new pressures in the downtown and Midtown areas.  The rest of the city, one tied to the failed or failing local economy, still struggles, and has the blight and vacancies to show for it.

Rebirth

This presents an interesting near future for Detroit that will have an impact on its physical form.  I’ve mentioned before that Chicago appears to be moving toward becoming a city split nearly equally between its more affluent sections and its working-class and impoverished ones.  Detroit may be moving in the same direction, but with some interesting twists.

I think Detroit is entering a period not unlike what Chicago experienced in the late ’80s, after Council Wars (which seriously damaged the city’s reputation), and Washington, DC experienced in the late ’90s in the aftermath of the Marion Barry scandal and financial crisis.  Economically, both regrouped and became participants in the global economy — financial and professional services in Chicago, government and technology in DC.

Physically, however, is where Detroit will be different, especially if it proves successful in addressing blight. While DC has a fairly stark east/west divide, and Chicago has a more generalized lakefront/non-lakefront divide, Detroit could, within 10-15 years, become a three-tiered city — a bustling, dense, walkable and globally-connected core centered around downtown and the riverfront; suburban-like enclaves clustered on the far northeast and northwest sides of the city; and a vast, nearly empty central section of the city, just north of the Ford and Jeffries freeways (Interstates 94 and 96, respectively), where many of today’s blighted and vacant properties now exist.

Some would consider that a successful outcome, and others would consider it a terrible loss.  I’m not certain where I would fit on that spectrum yet, but it certainly would be a unique outcome for a city.

 

 

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