Kriston Capps is a staff writer for CityLab covering housing, architecture, and politics. He previously worked as a senior editor for Architect magazine.
In some parts of the stricken city, the turnaround is here. Other parts are still waiting.
The Pew Charitable Trusts just released a report on how things stand in Detroit nearly one year after the city exited its unprecedented bankruptcy. Things are looking up, Pew reports. That’s not wrong.
As the report notes, utility crews are ahead of schedule in installing some 65,000 LED streetlights throughout the city. And under Mayor Mike Duggan, the city has brought complaints against 2,000 blighted property owners. “By the end of the year, the city will have torn down about 8,000 vacant homes,” the Pew report reads.
Some of the indicators are more mixed, or beneficial to only some parts of the city, like the new Red Wings arena and the attendant $650 million entertainment district, or the streetcar going up along Woodward Avenue. The breakout success of Shinola seems like an unalloyed good.
Still, it’s not entirely fair to describe the changes in Detroit as a “rebound.” That suggests that, with enough time, given present conditions, things will actually turn around. For some Detroiters, that’s right. For the poorest and most vulnerable residents, however, it’s not clear that their situation is improving.
There are some aspects of Detroit that could fairly be described as worsening. The scale and severity of the vacancy crisis in Detroit make forward progress extremely difficult under any circumstances. It just might be intractable.
The Urban Institute has also got Detroit on its mind. On Monday, Urban launched an ongoing online symposium on the housing recovery in Detroit, featuring fellows and expert guests. Taking the temperature of Motor City, Timothy Thorland, executive director for Southwest Housing Solutions, delivered this sharp diagnosis:
The specific challenges in Detroit’s housing market are certainly not uncommon circumstances in cities all across the country. Whether it be vacancy, abandonment, low valuations, aged housing stock, constrained resources, lack of mortgage product, lack of access to capital, high property tax, high insurance premiums or the like, what makes it nearly catastrophic is the unique combination of scale and acuteness. The Detroit market is dealing with all of these issues simultaneously.
And these are people who by and large agree with Pew. Erika C. Poethig, director of urban policy initiatives, points to the organization’s Detroit Housing Tracker to show that the number of underwater mortgages is falling while the share of household equity is rising. That is good news.
And yet, Poethig writes:
And yet, Detroit is grappling with some serious challenges—more than 80,000 vacant homes drag down surrounding property values and create the conditions for crime; distressed sales complicate the appraisal of properties, which makes getting a mortgage difficult for many potential homeowners; and, many of the available properties require significant rehab that goes well above the loan-to-value ratios most mortgage products offer.
Other cities face these challenges, but no other city in the U.S. has to tackle these issues at this scale.
Now, no one wants to throw cold water on a happy moment when those have been in short supply for Detroit. (Certainly none of these experts needs reminding that the city’s vacancy crisis is dire.) Laurie Goodman, director of the Housing Finance Policy Center for the Urban Institute, writes that other cities that have lost population and industry—Rochester and Syracuse in New York; Chicago; Cleveland—have created programs to retain equity for homeowners (and therefore retain homeowners). Detroit can learn from and adopt aspects of all these programs. That’s good news!
But then there’s the extremely bad news. Wayne County’s tax-foreclosed property auction, for starters, is a serious stress on thousands of owners and occupants living in Detroit. The county auction is a dark mirror of the city’s auction. On the one hand, the Detroit Land Bank Authority works to put new owners into vacant homes and ensure they stay there by requiring that they fix them up and live in them, more or less. Wayne County’s auction, on the other hand, doesn’t have doesn’t have any such requirements. As a result, anonymous corporations buy up hundreds of properties at fire-sale prices (as little as $500); extort whatever rents they’re able to from occupants; and then skip out on property taxes for three years—only to buy the property back when it comes up again in another fall auction.
This is to say nothing of the disgraceful, seasonal water shut-offs that have emerged as Detroit’s summer brand. Emerging from bankruptcy has not made life easier for the very poorest residents. Is Detroit rebounding? One answer might be: For some parts of Detroit, the turnaround is here, while for others, there’s no sign of it.
I’m expecting that former Detroit Land Bank Authority Deputy Director Dekonti Mends-Cole’s contribution to the Urban Institute symposium will shed some light on the experience among the poorest Detroiters. There’s at least one idea floating around out there about how Detroit can increase its tax base and revenues without raising it all on the backs of residents who simply cannot afford to pay: immigration. The real Detroit rebound might arrive when the Syrian immigrants do.