Howes: Rising Detroit property values signal reinvention is for real
Evidence keeps mounting that Detroit’s reinvention is for real.
Just a few years removed from roughly two decades of flat-lining values, residential property values are up 12 percent city-wide, a move that not too long ago would been national news. Instead, it’s just another metric charting the revival of arguably the hottest city in America, the place most of the country gave up for dead.
Sorry to disappoint, folks: we’re still here — a model for resilience, for the fruits of both bipartisanship and partnership, for business, political and foundation leaders coalescing around a common vision to revive downtown and the neighborhoods, for aspiring to go from worst to first and all that implies.
This week the city said property values rose last year for roughly 90 percent of the city's nearly 200 neighborhoods, with some neighborhoods notching gains of 20 percent. The city assessor concluded that the value of residential property added $400 million in value. And the value of commercial property surged 35 percent.
The upshot: Detroit's revival is spreading beyond its downtown spine and the real estate empire of mortgage mogul Dan Gilbert, chairman of Quicken Loans Inc. and its family of companies. Foundations and banks, long considered part of the problem in Detroit because their traditional lending standards hampered efforts by residents to secure financing, are essentially helping to create a functioning market.
Detroit still has enormous challenges, starting with its dysfunctional public schools and a rate of violent crime showing some signs of moderating — if not enough. But the process of reinvention that began soon after the depth of the global financial meltdown and gained speed through the city's historic bankruptcy five years ago continues to expand.
“People in the neighborhoods know the truth,” Mayor Mike Duggan told the Detroit Economic Club this week. “They know their property values are going up. They know their streetlights are on. If you go talk to most people, they can see the difference.”
Around Marygrove College, a linchpin in the revival of its surrounding neighborhood. In Corktown, where Ford Motor Co.’s plan to anchor its mobility campus with a renovated Michigan Central Depot is accelerating the resurgence of Detroit’s oldest neighborhood. In Old Redford, where shops like Alicia George’s Motor City Java House are signaling a revival of entrepreneurship backed by motivated lenders like J.P. Morgan Chase & Co. and Chemical Bank.
"Detroit is the hottest town in America," said Gary Torgow, chairman of Chemical Financial Corp., which is planning to build a new corporate headquarters at Woodward and Elizabeth across from Comerica Park. "We have seen great growth as we continue to do good things in the community. When we are doing the right thing, it will only be good for our enterprise."
The bank is "fully focused" on working with the city, its residents and its would-be entrepreneurs in a virtuous circle of lending, rising property values and functioning businesses in long-vacant commercial buildings. In addition to financing first mortgages in residential property, he added, Chemical is offering mortgagees forgivable grants totaling $25,000 to underwrite renovation costs and increase values.
"Banks can do a lot," said Torgow, a Detroit native. "Without the neighborhoods coming back, Detroit will not have the kind of revitalization it wants. If the banks don't do it, nobody else is going to do it."
He's right, and evidence of the difference the financial and foundation communities can make can be seen all around the city. Foundations are underwriting revitalization of the riverfront; lenders are looking for ways to support home ownership and renovation; a Strategic Neighborhood Fund is seeking donations totaling $100 million to support projects inside key enclaves around the city.
This kind of stuff just didn't happen in Detroit a generation ago. City Hall mistrusted business; business hid behind narrow definitions of corporate responsibility when its leaders weren't making excuses for their tired inaction; foundations hewed to carefully defined missions that didn't allow for investments to counter urban blight or help settle a historic municipal bankruptcy.
All that has changed, giving Detroit, its residents and its business leaders a better chance to prosper safely in the town they call their own. Said George, owner of the Java House: "It started to be contagious, being an entrepreneur. At one point it was like we were in a coma — nothing was going on."
Daniel Howes’ column runs Tuesdays, Thursdays and Fridays. Follow him on Twitter @DanielHowes_TDN, listen to his Saturday podcasts, or catch him 3 and 10 p.m. Thursdays on Michigan Radio’s “Stateside,” 91.7 FM.