The stereotype of Detroit as a city in decline with decaying building is a thing of the past.
People often urge people to bet on Black.
Apparently, experts should also urge people (especially Black people) to bet on Detroit because Detroiters who stayed in the “Motor City” when others had written it off, have seen an increase in generational wealth to the tune of $3 billion according to Mayor Mike Duggan.
The Associated Press reported, “The University of Michigan Poverty Solutions report says added home value for Black residents increased 80% between 2014 and 2022.
“For Black homeowners, estimated home values rose $3.4 billion to $6.2 billion over that period, while the net value of all owner-occupied homes in the city increased from $4.2 to $8.1 billion.”
The transformation comes after Detroit’s exit from the largest municipality bankruptcy in American history.
Duggan said, “For decades, Detroit’s homeowners saw their family wealth evaporate as home values declined. Now, those who stayed, most notably Black homeowners, have gained nearly $3 billion in new generational wealth because of our city’s neighborhoods comeback.”
The mayor added, “When I got sworn in 10 years ago there were 1,000 people a month leaving this city. People were bailing out on Detroit right and left. Those who stayed are $4 billion better off because they bet on the city of Detroit.”
In July 2013, a state-appointed manager filed for bankruptcy after Detroit faced a budget deficit of over $300 million and debt of approximately $18 billion.
By December of the next year, Detroit had exited bankruptcy with approximately $7 billion in debt restructured or eliminated.
Over the next 10 years, Detroit has boasted of balanced budgets and surpluses as well as reduced decay and improved city services.
People from outside of Detroit can visibly see the city’s turnaround when they see images of a revitalized downtown with new sports arenas and other amenities.
But increased home values are spread through the city, including predominantly Black and Brown neighborhoods.
The Associated Press reported, “Neighborhoods among the poorest in 2014—especially those with high concentrations of Hispanic and Latino residents—showed the most growth in home and property value, the University of Michigan study said.
“The average home sale price in 2014 for homes in the Condon neighborhood was about $7,500. By 2022, the price was more than $71,000.”
The University of Michigan study also showed that there has been 95 percent reduction in tax foreclosures, which has helped the city’s turnaround.
According to the 2020 census, “Motown” has a population of around 639,000 people, with about 75 percent of the city’s residents being Black.
The Michigan study showed that Black homeowners accounted for 82 percent of all generated housing wealth in 2014 and 77 percent in 2022.
Detroit resident Melvin Chuney, who is Black, said his home has tripled in value.
Chuney said, “It’s amazing and it’s real. It’s way more valuable than 10 years ago. People are fighting to get into this neighborhood that people were walking away from just a few years ago.”
White Detroit homeowners had the second biggest share of net housing wealth with 11 percent of net worth in 2014 and 13 percent in 2022.
Hispanic Detroit homeowners accounted for four percent of housing wealth in 2013 and six percent in 2022.
The Associated Press added, “Duggan was elected mayor in November 2013 and has guided the city’s comeback since the start of 2014. He announced last week that Detroit has surpassed $1 billion in combined public/private investment that has created more than 4,600 affordable rental units over the past five years.
“Over the past few weeks, two rating agencies also have raised Detroit’s credit rating to investment grade.”
In its report, S&P wrote, “Ten years on from its bankruptcy filing, Detroit’s financial position and economic condition are the strongest they’ve been in decades. Liquidity and reserves are at record levels, the debt burden is manageable, population decline is flattening, the stock of blighted and vacant properties is down considerably thanks to extensive city-managed programs, assessed property values have increased in five consecutive years.”
The Associated Press coverage of Detroit’s financial situation has changed significantly over the last 10 years.
On July 18, 2013, Corey Williams and Ed White of the Associated Press wrote, “Detroit became the biggest U.S. city to file for bankruptcy…its finances ravaged and its neighborhoods hollowed out by a long, slow decline in population and auto manufacturing that once made it the very symbol of American industrial might.
“The federal bankruptcy court filing, which had been feared for months, conserves cash so the city can operate but it will hurt Detroit’s image for years. It could mean laying off municipal employees, selling off assets, raising fees and scaling back basic services such as trash collection and snow plowing, which have already been slashed.
“Kevin Orr, a bankruptcy expert hired by the state in March to stop Detroit’s fiscal free-fall, chose bankruptcy over diverting money from police, fire and other city services to make debt payments.”
Now, “Motown” is singing a totally different tune.
“Prior to 2014, the city was reeling from the Great Recession, home sales had plummeted. There was a vicious cycle that was set in motion by the mortgage crisis,” said Jeffrey D. Morenoff, professor and dean at University of Michigan’s Gerald R. Ford School of Public Policy. “People were unable to get mortgages and mortgage lenders were not giving out mortgages because they didn’t know how to price homes adequately, in part because the market was being flooded by a lot of distressed, abandoned properties.”
