Mounting unemployment. Empty city blocks. Foreclosed properties. Soup lines. If not for the conspicuous signs of modernity – the 21st century high-rises, the passers-by using mobile phones – you’d be forgiven for mistaking downtown Detroit for any Depression-era American city. On July 18, 2013, the city, once an industrial powerhouse buoyed by the likes of Ford and Packard, declared bankruptcy in federal court. Detroit today is still reeling from the loss of its major employers, and this summer the debt strain reached a breaking point.
After the announcement of the bankruptcy, however, came a flood of creative new proposals to “rescue” the city. While Depression-era relief jobs came from federally funded programs like the Works Progress Administration, today’s Detroit is being helped by an oddball mix of private investors, start-ups, family endowments, and charities. Detroit has already made history as the largest American municipality to ever declare bankruptcy. What will happen next isn’t clear.
Detroit is at the crossroads of two contrasting forces. On one hand, trends toward public input on redevelopment, powered by the democratizing power of social media, foretell a more democratized and egalitarian urban revitalization. On the other hand, the funds for Detroit’s 21st century rebirth come from a select few entities and businesses, ones whose interests may not always align with an end goal of urban equality.
Unequal Repercussions
Detroit’s economic crisis didn’t have uniform effect on all the city’s residents. A large part of Detroit’s deficit spending had been going to pay the pensions and healthcare costs of retired former municipal workers, and in the aftermath of the bankruptcy, city workers, both current and retired, will experience pension cuts. Once a 2 million-person city, Detroit has experienced severe population decline, with current numbers hovering around 700,000. Those who could afford to leave, primarily middle and upper class Detroit residents who were able to find employment elsewhere, have already left. Many of those who remain are minorities: today 82.7% of Detroit residents identify as black or African American, compared to 10.6% white and 6.8% Hispanic. The percentage of people in Detroit living under the Federal Poverty Line is about twice the national rate.
As sociologists Reynolds Farley at the University of Michigan and Harry J. Holzer at Michigan State University reported in a study earlier this year, the death of the automobile industry had a disproportionately racial impact. Today, Detroit is fringed by wealthy suburbs racially distinct from the city itself, and there is very little incentive for those not already living in the city to move there. Detroit’s struggles are not on track to resolve themselves. Still, many private initiatives are forcing outsiders to give Detroit a second look.
Luring Small Businesses to Motown
One agent of change in Detroit is the collected strength of business schools around Michigan, which have developed tailored plans for Detroit’s revitalization. Wayne State University launched its Detroit Revitalization Fellows Program in 2011,which trains mid-career these executives for jobs in the city, with a special emphasis on real estate and community development financing. The project is funded by Wayne State and a slew of private charities. 45 miles away at the Ross School of Business at the University of Michigan, a similar program is in place for MBA students.
In 2013, the Ross School program partnered with a number of start-ups in Detroit, which have a secondary mission of bringing more investment to the city. Among these partners are Stik.com, a tech startup that customizes yellow page searches using social network data, Henry Ford Academy, a charter school, Focus: HOPE, a non-profit that trains underrepresented minorities, and Are You A Human, a Detroit-based tech startup that replaces traditional CAPTCHA pass-phrases with interactive games.
Some plans to bring new industries to Detroit are thinking outside the box; others seem downright wacky. Food Field’s FISHSTARTER campaign aquaponics project has been raising money for a food project that combines plants grown without soil (hydroponics) and fish farming in a unique system where the fish waste feeds the plants, which in turn filter the tank water. Abandoned urban space could be transformed into fish and vegetable farms, providing nutrition to Detroit’s urban food deserts. Meanwhile, a series of small food startups are trying to solve the problem of Detroit’s food deserts. These include Food Field, a urban farm in the Durfee neighborhood which grows organic produce and employs local teens and Harvest Express, a local online-only grocery store that delivers food to buyers’ doors.
Big Money, Big Impact
While programs like the MBA training initiative at the Ross School focus on providing well-educated workers to Detroit businesses, a more comprehensive approach to the issue is being implemented by entrepreneur and Detroit native Dan Gilbert. Gilbert is the founder of Quicken Loans, which moved its headquarters to Detroit in 2010. At the time of publication, Gilbert was ranked #118 on the Forbes 400 list of the wealthiest people in America.
He is also the financial force behind Opportunity Detroit, a multifaceted attempt to revive the city’s downtown. A re-purposed waterfront, more retail shops, light rail, and more public common spaces are all part of the plan. In 2011, Gilbert’s venture capital firm Rock Ventures began to acquire buildings in downtown Detroit, generating much controversy over the desirability of having a sole investor take on such an influential role in the city’s future. Gilbert’s investment into Detroit infrastructure has the potential to attract a lot of capital and attention to Detroit, but it is an investment strategy that operates based on a sole source of capital.
Gilbert has been quoted as saying that Detroit needs “a kind of a big bang,” meaning a perfect storm of new retail and new residents coming to the city and encouraging each other in a re-enforcing cycle. While Gilbert’s money may inject lifeblood back into the Detroit market, his Opportunity Detroit program gives him considerable personal power to shape the city in line with his own vision, perhaps at the cost of popular decision-making.
That said, it would be unfair to say that Gilbert’s projects are entirely unresponsive to the will of the public. Money from the Opportunity Detroit and Rock Ventures also goes to fund an initiative called Hatch Detroit, also funded by local banks and law firms, the Detroit Lions, the Downtown Detroit Partnership, and the Detroit Economic Growth Corporation. Hatch attempts to change Detroit as a whole by supporting retail projects, one at a time. It runs something called The Contest, a yearly competition founded in 2011 by Ted Balowski and Nick Gorga, which funds retail and business developments after polling the public to see what projects they would most like to see.
The HPR spoke to Ashley Hennen, Communications Manager at Hatch Detroit. “Our goal hasn’t ever been to ‘return Detroit to what it once was’,” says Hennen, “The population and tax revenue drop has been too drastic for that kind of aim. We’re working within our resources and limitations to bring the good we’re able to bring into the community.”
Bolstering Civil Society
Not every project in Detroit is premised on the idea that an influx of new small business development is the best solution to the city’s economic woes. In the last three years, there have been several attempts to improve the quality of life in Detroit as part of creating a more interconnected community.
In September of this year, the Knight Foundation, a charitable foundation that supports journalism and the arts, awarded a total of $2.1 million to the 56 winners of the Detroit Knight Arts Challenge, a city-specific contest that aims to support art projects that “promote informed and engaged communities,” Among the grant winners are a teachers’ retreat that promotes digital art in the classroom, a murals project, an after-school Arab music orchestra, and a project that trains young adults to use studio equipment and produce recordings.
Another initiative funded by the grants is Soup, a monthly dinner that allocates micro-grants for projects in Detroit based on popular vote. Attendees at the dinner pay $5 for a meal and the chance to cast a ballot for one of four project proposals. Projects range from art to urban design and social justice. The trend here is clear: fostering more opportunities for Detroit’s residents to interact with one another and feel more connected to their city.
The Knight Foundation also funds a project called the Detroit Commotion, a new, open-source wireless technology, which is set in the Cass Corridor neighborhood of Detroit. The project is a prototype for a new type of wireless network that will connect low-income apartment buildings, community centers, churches, and businesses in the Cass Corridor to each other. The idea behind the project is to make the residents of the city active participants in the construction of a new digital network. The US Department of State provided some of the funding for the project under the reasoning that it could be used in places like Egypt or Syria by resistance organizations. In Detroit, more than half of residents do not have reliable access to the Internet, and this sort of project would allow them to develop civil society by communicating with each other digitally.
These bottom-up initiatives approach the problem of a flagging Detroit in different ways but they have one commonality: placing power in the hands of the citizen, whether by facilitating information sharing, directly soliciting votes, or letting residents get involved in public art. In the process, they are creating a more civically engaged city.
The 2013 revival efforts in Detroit are taking a markedly different economic approach than the single-industry manufacturing that propelled the city’s economic growth a century ago. This time around, local investments, new technology, small businesses, and community involvement are dominating the economic landscape. All of these initiatives, though, are governed by one of two prevailing trends: the tendency towards more urban civic engagement and networking, and a push towards a new crop of small businesses. The initiatives form a complex strategy, one far more mixed than the single-sector dependence that got Detroit in trouble as the auto industry crumbled. It’s still too soon, however, to tell which projects will be successful, and which grand ideas will fail to catch on.
Photo credit: Flickr user Angela Anderson-Cobb, and Permanent Culture Now, under Creative Commons.