“Heck, we invented the middle class,” wrote journalist Mitch Albom of Detroit in its heyday. Today, the city is inventing something else entirely. A small group of billionaires is leading what surely must be the largest privately financed urban transformation in American history. Detroit’s new model for growth is premised on radical inequality, and it may well perpetuate it too. Is it good news anyway?
In a city where the median household income is about $26,000 per year, three billionaires now own most of the downtown and its riverfront. Another extravagantly wealthy landowner owns nearly 2,000 parcels. All four assembled their land portfolios while the city’s real estate market was flatlining—that is, when Detroit has been littered with so much abandoned property that land ownership brings more costs than value. Since 2005, more than one-third of all properties there have gone into mortgage or tax foreclosure.
Today, most expectations for the city’s financial recovery depend on these new owners bringing in businesses and people. Two of them have relocated thousands of jobs into Detroit, thereby reversing suburban flight for the first time in decades. Just about everyone who cares about Detroit, including me, wants them to succeed. After such a long economic drought, Detroit’s residents need these big boys to make it rain.
Yet it is also true that Detroit knows all too well the unforgiving self-interest of mobile, monopolistic capital—the way that a city’s dependence on a small number of enormous businesses makes a city vulnerable. When the auto industry largely abandoned Detroit for greener pastures (first to the suburbs across Eight Mile Road and later to the far sides of U.S. borders), the city’s employment and tax base collapsed. Springsteen captured that era best: “Now the yard’s just scrap and rubble . . . Them big boys did what Hitler couldn’t do.” When the Big Three Automakers are replaced by the Big Four Landlords, it is worth a critical pause.
Should the residents and elected leaders of Detroit greet their situation with optimism, cynicism, or reluctant dependence? That question matters not just to the city but to the nation, because although Detroit’s circumstances are extreme, they are not anomalous. Across the country are hundreds of broke governments inhabited by millions of broke people. The wisdom or danger of relying on concentrated private wealth to rebuild places leveled by chronic poverty—and our diminishing alternatives if we do not—is the billion-dollar question of modern urban life.