Too many barely surviving Detroiters presents a problem for the Detroit Comeback City narrative
With so many Detroiters still living below the poverty line, or barely treading water above it, perhaps it’s time to re-think this persistent view that homeownership is the answer that will bring the city roaring back to life. Because, truth be told, nearly half of all Detroiters aren’t making enough money to comfortably own and maintain a home without putting themselves at financial risk.
Then stir in the factor of credit worthiness, because most banks today won’t consider financing a home mortgage in Detroit – even to a person with stellar credit – because so many homes are still underwater with the home resale appraisal value tumbling far below the property’s original appraisal value. And if a home is underwater then it can’t be properly appraised, which means the potential buyer usually can’t get a loan to buy a house in Detroit for anywhere near what the seller wants. Hardly anybody in Detroit today can afford to sell their home if they have any hope of recouping their investment.
I’m going to go out on a limb and guess that most Detroiters do not have stellar credit.
Then there’s that other fact, reported by Crain’s Detroit Business not long ago, that the overwhelming number of home sale transactions in Detroit these days are cash transactions, not mortgages – because nobody can qualify for a mortgage in Detroit. And since the average cash transaction value for a home sale is around $30,000, while the average bank financed mortgage is around $150,000, then that means property values in far too many neighborhoods are being kept underwater because the cheaper transactions far outweigh the mortgages, which of course negatively affects property taxes, which negatively affects revenue for the city, which…
On and on and on it goes, that downward spiral.
So last week when Mayor Mike Duggan announced the $4 million investment planned for the Fitzgerald neighborhood, that chosen square quarter-mile located on the city’s northwest side, there was reason to feel at least some measure of hope that maybe now the neighborhoods were finally beginning to receive the same amount of attention as downtown and Midtown. The promise of a revitalized neighborhood, assisting the current homeowners with the potential of attracting even more stable homeowners with the construction of new homes and the rehabbing of others, should be a good thing worth celebrating. There are definitely some strong positives here, even if the critics have a point that more could have potentially been done sooner to focus on neighborhoods.
But when you look at the overall collective set of crippling circumstances that many of this city’s neighborhoods are facing, there is a lot more to be concerned about than whether or not Duggan’s announcement was too politically timed. More specifically, one has to wonder whether Detroit’s entrenched poverty presents too steep a hurdle to conquer between where we are today and the goal of a fully revitalized Detroit.
Or is the problem that we’re just not willing to openly acknowledge the severity of the problem? Because even with the plans proposed by Planning and Development Director Maurice Cox to better anchor the city’s more stable neighborhoods, there still doesn’t seem to be as comprehensive a plan for those that didn’t quite make the cut. And as much as everyone talks about the need for better job training and job preparedness for a workforce that is still in many ways unprepared to face the challenges of the modern workplace, there still doesn’t seem to be an agreed-upon answer or plan/approach as to how to prepare this large number of Detroiters to qualify for the sorts of jobs that will actually pay them enough to afford a decent home.
In a Facebook post written by Bishop Edgar Vann on Sunday, he clearly spelled out the challenges:
“Recent U.S. Census data proves what many legacy Detroiters already know, poverty is still Detroit’s primary issue no matter how bustling the Greater Downtown area has become. Detroit is still losing population. Why? Middle and upper middle class African Americans continue to move out of this city. I can verify that with my own congregation. Median household income in Detroit has declined to less than $26,000.00 in 2015, less than half of the national average of $65,685.00. In zip code 48212, where my church is located, the median income is only $21,460.00. The Michigan adjusted gross income is $56,937.00.
“Lack of opportunity continues to drive the wrong people out of the city. Legacy Detroiters who should be sharing in the prosperity and the development of the city are still leaving. This makes the city so much poorer.
“Downtown workforce growth has mushroomed to more than 10,000 new workers while two-thirds of the neighborhoods in the city show increases in the poverty rate. And yet, Detroit has the lowest workforce participation rate in the country. 53%. Which means 47% have given up on finding a family supporting job. Something’s not right with that picture. No matter how many smaller sized, highly priced, density intended apartment type units are built, no matter how many neighborhoods we rename with 50-100 year old homes we renovate, we must also be intentional about retaining middle to upper middle class, highly educated upwardly mobile African Americans in the city of Detroit as well. There must be subdivisions in Detroit that are welcoming for these families with newer construction.
“African Americans are still leaving Detroit in large numbers. The poverty rate is now 40%, ballooning from 26% in the year 2000. Our leaders are aware of these realities. Efforts have been made to address some of this. There’s not much time left to fix this. Let’s proactively move on this collectively.”
Detroit Future City’s Anika Goss Foster agreed that poverty remains a serious obstacle, and suggested that renting – as opposed to owning – must be considered as a viable part of Detroit’s revitalization. In a city that once boasted the highest rate of African American homeownership in the nation, this might be a hard pill to swallow. Then again, a recent report in the Detroit Free Press revealed that for the first time in more than 50 years, renters outnumber homeowners. So maybe that pill is already being swallowed, even if the taste is bitter.
But it doesn’t have to be bitter at all. It just requires an acceptance of the reality of where we are, and a realization that renters are not some lower form of life incapable of being good neighbors.
“We need better support systems for landlords and renters. The whole rental model, we’re going to have to really change how we think about it. We think of renters as poor, and don’t take care of their housing, right? Or their neighborhood and don’t care. And we think of them as transient. So we need to change how we think of them. That renters are actually your neighbors,” she said.
“Detroit continues to remain a city where there’s the highest concentration of African-Americans that are living at low income. That also means it’s the place where you can be poor and black in perpetuity. So we have to be able to stop that. So there are all different ways; it’s looking at living wage, it’s looking at entrepreneurship, and really financing businesses so that you can actually create a quality of life. It’s looking at where there are jobs available, it is looking at workforce and workers training and how to get people into the workforce so that they can actually make a living wage.”
But one thing that perplexes Foster is how it is Detroit remains in this rut, despite all the money that has been spent to get us out of it.
“So there’s something missing. I still don’t know why after all of this hundreds of millions of dollars have been invested in Detroit in housing programs to create an affordable housing and mixed income housing approach in Detroit and we still lack in housing affordability. There’s millions of dollars put into workforce training and put into economic development investment in Detroit. And people are still not ready to work. Now there might be multiple things that impact that. Right. So education impacts that. Your skill set. Having the right skills for the right job impacts that.
“[But] are we teaching people the wrong kinds of skills? Should you be taking business businesses finance in high school? Should you be taking robotics and coding in high school as opposed to kind of this basic stuff [just] so that you can pass the Ford plant test? When Ford’s not really hiring like that anymore?”