A New Way to Look at Vacant Spaces in Metro Detroit

If given, say, $100 million to make Detroit better, how would one decide where and how to invest it? Would it go toward tearing down vacant structures? Or would it be better spent investing in community-based initiatives, such as events, art or organizations? These have been the questions economic developers have been grappling with for decades. What does a good investment look like?

 

"The private sector has been using data for predictive analysis for 20 years. The public sector has always just counted things," says Nigel G. Griswold, a Stockbridge-based economic development consultant.

 

For example, a city might announce it has invested $1 million in a neighborhood or the state might decide to spend $100 million on fighting blight. 

 

"But what are the impacts of those tax dollar investments?" he asks. "Specifically, on land use and housing policy, how much benefit are we getting out of those investments?"

 

Those unanswered questions apply to ideas such as placemaking, land banking and other forms of investment, all of which sound like great plans, but none of which are easy to measure with any accuracy. Griswold, author of the report "Economic Impacts of Residential Property Abandonment and the Genesee County Land Bank in Flint, Michigan", is diving deep into data-sets to put an end to the guesswork. He's been looking at the economic impact of demolishing vacant structures in legacy cities versus the vacant spaces left behind when those structures are demolished, and what he's finding underneath all those numbers could have a dramatic impact on economic development as we know it. 

 

 

The short explanation is that it's city like Detroit: a large, post-industrial city that was once an economic powerhouse, but now is struggling. Integral to the definition, however, are the assets that remain. 

 

"At one time, these cities did have some significant wealth, and there are significant assets that have been left behind," says Sarah Szurpicki of Detroit-based New Solutions Group, who, along with her colleagues studied placemaking in legacy cities for the Center for Community Progress. "You can see that in Detroit. That's why people liked the term "legacy," because all these assets are the cities' legacy." 

 

Placemaking has been all the rage in economic development circles for years, but the concept of developing a sense of place is a particular challenge for legacy cities. 

 

"It's sometimes hard to connect traditional placemaking literature with the work people are doing around vacant properties or anchor institutions or downtowns [in cities] that might not be as vibrant," says Steve Tobocman of New Solutions Group. "The topic of placemaking has gotten lots of treatment over the last decade, but an we thought an investigation of what it means for these cities was important." 

 

So what does this new thinking on legacy cities mean for Metro Detroit? It could mean quite a bit, considering the city of Detroit is the only political entity in southeast Michigan that technically falls under the definition. But those political boundaries may not matter as much when it comes to getting the biggest bang for the economic development buck. Which bring us back to Griswold's findings. 

 

 

Through his econometrics, Griswold was able to determine that while vacant lots and blighted structures both have negative impacts on neighborhood property values, vacant lots have a less negative impact. What's more, the difference between those two negative impacts is wider in less distressed areas. So…what? 

 

Griswold found that there is greater economic impact when public funds are dedicated to demolishing blight in areas of need - but not the areas of most need. In other words, development dollars are better spent on neighborhoods that have a real chance of economic recovery rather than those whose circumstances are most dire.

The concept gets really exciting (depending on your definition of exciting) when the impacts of tax increment financing or TIF districts are imagined in these places. 

 

TIF districts are popular economic development tools in up-and-coming neighborhoods. That's because, once established, any increase in property value goes into a special economic development fund used to reinvest in that district. In Griswold's vision, TIF districts would be created around two categories of blighted areas – the super blighted and the less blighted. But any initial economic development funds should be spent demolishing blight in the less afflicted areas first. Those dollars would then created the greatest possible increase in property value, which would generate TIF funds, which could then be directed toward the more blighted nieghborhoods. And then, hurrah! An amazing domino effect of development dollars begins to proliferate.

 

"If you're fighting a fire, do you fight it from the center or the edge?" asks Griswold. "If you know the line between functioning markets and non-functioning markets, there will be a gray area between them. Those are the areas where we can dial in more focused activities." 

 

The major issue Griswold foresees in getting such policies into action is a political one. People want to see funds invested the areas that are the hardest hit – especially those living in them. Explaining to constituents why some neighborhoods should have priority over others will be a challenge – particularly when those neighborhoods straddle municipal boundaries. What if the best way to leverage economic development dollars for blight in Detroit was to begin in Dearborn? Or Hamtramck? Or Pontiac?

 

"I would look at Metro Detroit as a region," says Griswold. "You'd have to forget about all political boundaries. From an economics perspective, you'd erase all those boundaries and create an economic region."
 

 

It's easy to see how political Griswold's plan could get in a hurry in Metro Detroit. It would be complicated for sure, but Griswold says when managed through land banks, policy has too much public benefit to ignore. 

 

"I think land banks are one of the most innovative economic development tools that exist for our post-industrial cities," he says. 

 

So what happens to placemaking with all this focus on vacant spaces and land banking? As it turns out, the newest thinking on placemaking in legacy cities takes a long view, which could fit with a policy that focuses on blight at the front end. 

 

"Most of the stories [in our study of placemaking in legacy cities] are ten, twenty years in the making," says Szurpicki. "That seems to be how it happens. Perhaps it has to do with scarcity of resources."

 

With Szurpicki and her colleagues agree that economic development efforts around placemaking are best invested by watching and waiting for community-based efforts to begin and supporting them as they slowly grow. That seems to leave plenty of space to focus on fighting blight as well. 

 

With the longstanding and unique redevelopment issues in legacy cites, it's high time for some new economic development thinking in the areas of placemaking, blight and land banking. Translating those ideas into policy and those policies into action in Detroit and throughout its metro region? Those will prove to be the next big steps for a whole new set of regional economic developments minds. 

Natalie Burg is an Ann Arbor-based freelance writer and Concentrate's Development News Editor. And she's got a memoir, Swedish Lessons, that's just been published.

ALL PHOTOGRAPHY BY DAVID LEWINSKI PHOTOGRAPHY