The city of Detroit today stands at a crossroads.
Property values are relatively low.
And if we're going to create a city that works for
all, now is the time to do it.
After a long cycle of decline, powerful forces are
remaking the city piece by piece.
As a Detroit resident, you know that I want to see the
city that I live in really be an amazing place.
We are funding and housing small businesses from across
the country.
We have so many projects going on, so there's a lot
of noise, a lot of dust.
People are leaving the city.
A lot of Black people are leaving the city.
What you call redevelopment is really displacement.
These moves could foreshadow the future of America's
factory towns.
When a city experiences bad economic times, you see
property values decline.
With a decline, to a certain extent, developers say,
Well, it's cheap to buy this, and they buy it and
redevelop it. So why didn't that happen in Detroit?
That was the big mystery.
Are these new developments good or bad for Detroit?
And what do residents think of the changes coming
downtown?
Detroit, Michigan was once the heart of the American
auto industry.
Being on the river, they were a prime location for
access to coal from the south and metals from
Minnesota. And so it was particularly well located
for what was going on in terms of the advent of
manufacturing.
Just about 640,000 people live in the city today.
That's a huge decline from its heyday.
At its height, Detroit's population was just short of
2 million people, and we have all the infrastructure
that reflects that. And now when you have a city that
literally houses one third of that population, there
are some challenges that exist. You don't have
necessarily the same tax base to be able to fund all
the infrastructure that's already been existing.
People from around the world came to Detroit to find jobs
in car factories.
We think of the assembly line with the automobile,
and certainly that's the iconic part of Detroit.
But it also turns out that to accommodate this surging
population, year after year, decade after decade,
they also had to essentially develop assembly
line tracks of housing.
Certainly, things peak in 1950.
As global trade became more important in the 20th
century, Detroit's economy shrank dramatically.
This loss of jobs eventually led to intense
cycles of social unrest in Detroit.
Deadly riots broke out in the summer of 1967, and
people left for the suburbs in droves.
It wasn't that there were just a section here of the
city or one over there that had fallen into disrepair,
disuse. But it was very widespread and it was
widespread literally in the shadow of they're still some
of the largest auto companies on the planet.
But with the population leaving, with the
infrastructure staying in place, it meant strains on
the city. Cumulatively, they started to mount over
time.
Since the peak, very little has been built.
New construction of homes stalled almost completely
since 1950.
Over the years, the city earned a reputation for
blighted structures and abandoned factories.
The city also still has its huge interstate system that
was built largely by the federal government.
The Federal Highway Administration in a zeal to,
quite frankly, accelerate people getting back and
forth from the suburbs to downtowns, put highways all
through neighborhoods and cities all across the
country. And invariably, many of those interstate
highways cut through neighborhoods heavily
populated by Black and brown communities.
It's a sad story because this neighborhood was split
and ultimately eradicated by the construction of a
freeway called I-375.
It destroyed a few neighborhoods: Black Bottom,
Paradise Valley, and that really fractured the
community. What stands there today is we have this
freeway, which is a very short freeway, but we also
have different neighborhoods that don't
exactly look the same.
And I grew up in one of those neighborhoods called
Elmwood Park next to the Lafayette Park neighborhood.
And so I think for folks there, it's important to be
mindful of that history.
Scientists know that the introduction of a freeway
can worsen air quality in an area and also increase
noise pollution. Local planners say that remaking
the highway could create a better quality of life for
newcomers. Construction work could kick off by 2027,
according to state officials.
You know, it'll be, quite frankly, a landmark
opportunity to redress the wrongs of this physical scar
in our city.
As we're reimagining how infrastructure supports
people and supports life, we have an opportunity to
acknowledge that past and build a future that doesn't
make the same mistakes.
Others in the city are more skeptical of the plan.
The redevelopment of an expressway has little to do
with the expressway, but who's going to benefit and
why at this point is it taking place?
A small but mighty collection of buildings are
going up fast in downtown Detroit.
At the same time, rents have crept upwards, fueling
concerns over gentrification.
The biggest annoyance that I find is that a lot of times
the developers are coming in and making you feel like
they're saving the neighborhood, whereas we
have people that have been here for a long time.
They have some pluses and minuses.
Pluses being that they're shops and more interesting
things to do in the city and places to go to that
where you can feel more safe and take your families
. Cons would be that a lot of people like myself kind
of feel out of place.
Many of the changes underway in Detroit trace back to
billionaire investor Dan Gilbert.
Here's the executive director of one of his
philanthropies.
So back in 2010, Dan made a very intentional decision to
bring the family of companies from the suburbs
of the city of Detroit to downtown Detroit.
You know, both from a business perspective and
from a community perspective, his thought
process was, we can make an impact as a business by
bringing jobs to the city of Detroit.
The typical job in the city of Detroit pays well, but
many of those workers commute into the city.
Residents of the city only earn about $36,000 a year,
much less than the national average.
Affordability has become a major issue.
We believe in a city where everyone has access to
healthy, stable housing and the city of Detroit, while
its property values certainly are going up, the
city of Detroit's property values, really, if you look
at the bigger picture, are still pretty low.
The issues have to do with what's on the market.
Just hundreds of homes were built in the city over the
past decade and most were priced above the budgets of
the typical Detroiter.
That does make it challenging when providing
affordable housing because even quote unquote resident
apartments at 80% of AMI may still appear a little
outside the affordability of what many would call the
average Detroiter. So that's why some of our
developers are trying to make deeper inroads in
affordability. Now the challenge that exists
literally today in 2022 is that construction costs have
gone through the roof over the last 24 months,
principally during COVID, and they've not abated
really. But it has mitigated our ability to do
certain forms of housing.
While this new round of development stretches on,
people continue to leave the city.
Economists believe that the steady loss of people is
ultimately what fueled Detroit's historic
bankruptcy.
In July 2013, the city of Detroit filed for Chapter 9
municipal bankruptcy.
With the decline of population, that can often
come with challenging times for any city.
From the city of Detroit's perspective, that meant
entering the largest municipal bankruptcy in
history, and that meant a lot of challenges for
pensioners and for our museums and for our tax base
generally.
Detroit's filing contained nearly $18 billion in total
liabilities. Economists believe that the city's
financing of public services and infrastructure
were the primary causes of this funding shortfall.
So the city was saying its revenues continue to decline
and the ability to manage that infrastructure, that
big scale that was put in place, it wasn't flexible.
You had an inability to manage that.
In a vibrant Detroit, a lucrative pension for city
employees with a large tax base seemed to make sense.
That, too, then became a burden, something weighing
on Detroit, until a breaking point was reached.
13 months after the initial filing, Michigan lawmakers
provided a bailout loan to the city, ending the
bankruptcy.
As the city of Detroit goes, so goes the state of
Michigan. So the state of Michigan is going to
continue to do everything we can in our
administration. We were not in power when that happened,
but our administration has pulled on every stop and
taken every opportunity to make sure that the people of
the city of Detroit know that we have their back and
are going to invest in their communities.
The Federal Government also funded demolitions of about
15,000 blighted structures in Detroit in the aftermath
of the bankruptcy and national housing crash.
Bailouts for two of the three largest automakers
prevented even bigger losses of local jobs.
You know, right now, we're still coming out of that a
bit. And also, many of the families have moved away to
some of the neighborhoods adjoining us.
That puts some challenges on our public school system.
In the four state budgets that Governor Whitmer and I
have negotiated and passed on a bipartisan basis, we've
invested more in K-12 education than ever in the
history of the state of Michigan. That means more
money for Detroit Public Schools Community District,
the largest school district in the state, are seeing
more investments in their school buildings, more
investments in the education professionals who
support them, and more investments in the resources
that are available to them as learners so they can be
positioned to be successful.
And we think that those kind of foundational
investments, in addition to the infrastructure
investments that we've talked about, we think that
that really sets the table for the city to be supported
and to go forward and to thrive.
Detroit today has turned many things around by
raising taxes.
New revenue is coming in from internet gaming and
sports betting. The city has also been accused of
inflating property value assessments to extract more
cash from its citizens.
In response, the city told CNBC that the effective tax
rates in the city are high because there's a large
number of low value properties around town.
Some of this public money could end up going back to
companies like Bedrock Detroit, which is controlled
by the billionaire Dan Gilbert. In July 2022, one
of his new buildings downtown received a $60
million tax abatement from Detroit's city council.
Bedrock's CEO told CNBC the decision from the city
council was consistent with decisions for other major
developments within Detroit, given the city's
significant tax rates.
Dan Gilbert's philanthropic spending has rippled through
Detroit, earning him both supporters and opponents.
Dan Gilbert doesn't need a $60 million tax abatement
to build this building.
It is a big business and it's a handout to a big
business, but it supports many small businesses.
Detroit's financial future remains uncertain moving
forward. A budget assessment from 2022
includes a doozy in the footnotes.
City revenues could fall short of spending by 2027.
The city says that these are conservative estimates
and that it will continue to exercise spending
restraint.
As inflation sets in, many people living downtown could
face insurmountable price hikes.
We can do this in a way that doesn't bring about
displacement, but that instead encourages and
enables people to stay in the neighborhood they live
in, in the neighborhood they want to live in, and
not be forced to move somewhere else because their
home or their community or their block is no longer
there.
The city is diversifying into new fields while
retaining a strong blue collar workforce, which
could promote economic stability.
With any luck, these new plans will help officials
avoid repeating the city's worst mistakes.
Detroit was world famous.
For it to decline meant that something can happen to a
city that was a beacon of progress, of growth
globally.
You could see the parts where people are still being
left behind and just not being told of what's going
on. So people don't really get the sense of pride.
A lot of people looked at the city of Detroit and just
saw the bankruptcy because it was something different
and strange.
But once you look past that, you see people who are
really fighting every day to make their community the
best place it possibly can be.
A lot of people, I think, are still fearful of coming
down here. I think you have to come down and look for
yourself.
We've got a lot of things coming.
The city is buzzing.
When it comes to the city of Detroit, you can either be
here or you can hear about it.
So which one are you going to want to do?