Motor City Madness
By Sam R on Feb 25, 2014
I grew up in Detroit back when the name was synonymous with the best of American manufacturing. It wasn’t just the Motor City, it was Detroit Rock City, famous for Alice Cooper, Ted Nugent and Iggy Pop and it was Motown, famous for the Four Tops, Smokey Robinson and Stevie Wonder. What does the name evoke these days? Rot and ruin, a spectacularly abandoned ghost town where poverty is the rule rather than the exception.
The crash and burn of the American auto industry precipitated a mass exodus by anyone who could afford it, leaving behind only those who couldn’t and a real estate market ripe for picking by those who believe that the city may yet emerge from the ashes. But will it?
This week, Detroit Future City (DFC) Implementation Office and its community partners unveiled their priorities and initiatives for spurring economic growth, creating employment, reforming the transportation system, creating green space, and the other myriad of things it’s going to take if there’s a hope of making Detroit viable again.
They also have a plan for “blight elimination.” If your city even has reason to use the “blight elimination,” that’s a pretty good indicator of how much work there is to be done. There are currently more than 380,000 parcels of land in the city, according to the New York Times, and teams are in the midst of photographing and cataloguing each one of them, trying to put together a comprehensive picture of how many should be saved and how many demo’d. It’s a tough job, aimed at a moving target. It’s estimated the number of vacant buildings in the city is between 80,000 and 90,000. Demolition alone could cost upwards of $1 billion.
Plus, there’s the conundrum of getting a segment of resistant population to get out of its own way. The streetlights are out, sidewalks go unplowed, in some neighbourhoods only one or two residents remain on each street. In the documentary Detropia, the former mayor’s plans to relocate some of the city’s remaining 700,000 residents — now living in a city built for nearly two million — to bring the population closer together, making it possible to amalgamate essential services, is met by cries of racism and being held down by The Man. Even those without such ridiculous knee-jerk short-sightedness are still likely to feel some resistance — who wants to move away from a home in which they’ve spent decades, sunk their savings, raised their kids?
Still, Canadian investors have been enormously optimistic, snapping up cheap homes for less than the price of a new car, and watching avidly as the market improves. The median home sale price went up 28% year over year in January, to an average of $110,000. With stock of rock-bottom housing dwindling, there was a 14% decrease in the number of home sales in metro Detroit the same month. International buyers are seeing the potential Canadian investors saw, too, so competition for any remaining steals is fierce.
The Canadian government announced plans to start buying land in Detroit for the U.S. side of an international bridge, a $2 billion project that would seem to bode well for the area.
But I just don’t see it. Few places in the U.S. right now better illustrate the disparity between the haves and the have-nots – and in this case, most of the haves took the last bus out of town. Without a viable tax base, how do you even begin? Detroit may find itself a mecca for starving artists (where else could you afford a home and studio for $700 a month?) but I think its days as the standard-bearer for the American Dream are behind us.
It doesn’t matter how cheap the land is, when we invest in real estate we’re ultimately buying a share in the future, and if there’s no future, no deal is a good one.
