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?
