Will Hipsters Save Detroit and Other Shrinking Cities?

After years of chronicling just how bad things have gotten in America's shrinking cities, the national media now seems obsessed with stories about how to save places like Detroit. It's a welcome change, although the coverage often tends to underplay just how much work remains to be done, while overplaying the role of urban homesteaders and other newcomers in the revival.

As Ashley Woods points out in the Huffington Post, long-time residents who never left their cities are frequently left out of the equation:

Last month, Thomas Sugrue, the scholar who literally wrote the book on Detroit, traveled to the Motor City to deliver a tough message to business and political leaders. Detroit's comeback, he said, depends on whether the city can improve the lives of working-class African-Americans.  

"Revitalization" is a buzzword in the city, which filed for bankruptcy last year and grapples with widespread blight and high unemployment and poverty rates. In spite of all this, Detroit is often celebrated as a hipster paradise and tourist destination by national media outlets.

But Sugrue said Detroit's recent successes in its downtown area and in Midtown, the city's cultural center, aren't benefiting the majority of residents.

While plucky urban homesteaders make for inspiring stories, many of the more pragmatic efforts to turn these cities around don't get much coverage. In a recent essay for Belt Magazine, I made my pitch for land banks:

While it lacks the emotional appeal of stories about the young idealists who venture back to these struggling cities, land banks are a more far-reaching and clear-eyed attempt to help places like Flint. They don’t focus on getting residents into abandoned housing; instead, they concentrate on eliminating empty structures. 

Admittedly, the land-bank approach appeals more to the head than the heart. It requires cities to let go of the past and admit they might never regain the growing populations, thriving economies, and broad middle-class prosperity of the post-war boom. Though it’s not an economic plan that will generate new jobs, it is a logical step toward stabilization and it lays the groundwork for the future.

If they are in it for the long haul, newcomers to cities like Flint, Detroit, Cleveland, and Gary can play a role. But let's not forget the current residents who are doing the heavy lifting, or the programs and policies that will bring about the biggest change:

There’s no silver bullet that will solve the problem of abandoned houses in America’s shrinking cities. Well-meaning Rust Belt expatriates like me can lend a hand. Dedicated urban homesteaders can save some houses with money, carpentry skills, and sheer force of will. Innovative projects like Detroit’s Write A House, which gives a renovated home to writers who move to the Motor City, can play a role in stabilizing neighborhoods. But the staggering number of empty houses means that these laudable efforts are only a small part of the solution. Land banks and other initiatives to demolish the structures that no one wants will have a far greater impact.

The Return of Victory Gardens

Flint has something Los Angeles wants — urban gardens.

Land grab

Is this house at 3902 Keyes a good investment? At $899 a naive investor in Tucson might think so.

If you examine the Flint real estate market, you might be surprised by what you find. As of today, there are more than 1,200 homes for sale in Flint, along with dozens of commercial properties. With the well-documented socio-economic problems of the Vehicle City, the question is who would ever buy one of them?

Apparently, many will be snapped up by out-of-town investors.

“In five years, the number of residential and commercial properties owned by out-of-towners has increased by about 17,000 parcels — out of only about 60,000 parcels in the entire city,” writes Joe Lawlor of The Flint Journal in an excellent story on Flint’s real estate situation. “Some properties have become rentals; many have been abandoned, foreclosed and turned over to banks; and others have been sold to out-of-towners or amassed by the government.”

That’s right, out-of-town investors are buying Flint real estate. I know what you might be thinking. Who are these lunatics? We have to find them and get them the help they need, right?

But after interviewing two local real estate agents, who asked not to be named, I’ve discovered it’s not as crazy an idea as it might seem. Okay, it is crazy, but with a lot of luck and a taste for adventure, it’s possible to make money at it. Or at least that’s what the out-of-towners think.

Obviously, the rock-bottom price of property in Flint gets the attention of investors. But another surprising factor makes it irresistible to many of them — rental prices in Flint are reasonably high. Take a look at Craigslist and you’ll find two-bedroom rentals going from $300 to $700 a month. And with the spate of foreclosures, the demand for rentals is climbing, which might bump up prices even more, despite the city’s steadily declining population,” according to one real estate agent.

Let’s use an extremely optimistic hypothetical example to illustrate how this might work.

An investor buys a house in Flint for $2,000 and puts $3,000 into fixing it up for rental. He rents it for $500 a month. That’s $6,000 in pre-tax revenue after one year, enough to cover the purchase and repair cost. At the end of the second year, he’s made $6,000 in pre-tax profit.

Now imagine if the investor owned 20 houses. Suddenly, he’s the Donald Trump of Flint — hopefully with better hair — pulling down $120,000 in rental income each year.

And don’t forget he gets to depreciate the value of the houses each year, which cuts down on taxes.

Now how would this scenario be even rosier for the investor? Well, if he was willing to be a slumlord and make almost no improvements to the property, he wouldn’t have to worry about repair costs too much. In fact, he could let the house “depreciate” over the years to the point that it’s uninhabitable and needs to be torn down. (This also eliminates the possibility of capital gains taxes if the property ever appreciated in value and he sold it.) He milks the house for all it’s worth and he’s left paying taxes on a vacant lot. And that’s often less than $20/year.

The problem is that even scrupulous, well-intentioned investors often don’t realize what it means to own property in Flint. Many times they’ve never even been to the city or seen the property. They’re not aware that renters might have drug problems. Or guns. Or both. Or, they may be struggling to survive and simply can’t pay rent sometimes. The investor just sees the cost of the house and the typical rents and gets excited. Plus, if the deal goes bad, a well-off investor doesn’t really care if he loses $10,000 on a house or two. It’s a write-off.

That’s why, according to a local realtor, investors sometimes buy several houses at once, or even entire blocks, sight unseen.

And what happens when the investment doesn’t pan out the way the investor in Phoenix or Chicago or Fenton, or Los Angeles planned? You guessed it. Many times the properties are left to rot, and the city, along with the neighbors, are left to deal with the fallout:

“David Hurley, a lifelong east Flint resident, mows his own lawn and the lawns of about a dozen properties he doesn't own in his neighborhood,” Lawlor writes.

“He mows lawns and plants gardens on property owned by banks, out-of-state owners and the Genesee County Land Bank.

“Nobody pays him to do it.

“He does it because he said if he didn't the neighborhood would be overtaken by weeds.

“He looks around his neighborhood and sees increasing numbers of rental homes, weed-strewn empty lots and shells of houses with doors broken off, the copper stripped and the siding stolen.

“The neighborhood is being hollowed out, house by house.

"’People from out-of-state are buying properties for $5,000, $7,000, for investment reasons. They've never even seen them,’ said Hurley, while driving through the east side.

“’These people moved away and left their house. There's rats in that garage. The Land Bank owns that one. These houses burned. That one exploded,’ Hurley said, pointing to each property from his van. "It's disgusting.’”

Click here for audio of Joe Lawlor interviewing David Hurley about his neighborhood.

New Housing

Flint's housing situation seems relatively straight forward. The population has dipped, creating a lot of empty houses. The Land Bank has stepped in to rehab or remove the most dilapidated eyesores, but there are so many empty homes it's hard to keep up.

Seems simple, but then you read in the East Village Magazine about the possibility of infill housing courtesy of Habitat for Humanity:

"The Grand Traverse District Neighborhood Association Secretary Steve Snuske reported he met with two representatives from Habitat for Humanity to discuss infill housing in the neighborhood. They were referred by the Ruth Mott Foundation and may build 12 to 14 owner-occupied houses over a period of three years. The houses would be designed and built to look like surrounding homes and appear as if “they are a part of and always were in the neighborhood.” Snuske said there are not yet any plans to move forward with the project."

Things get a lot more complicated when you start trying to decide which neighborhoods will get more housing, and which will simply be dotted with vacant lots or disappear altogether.

Flint Farmers

One of the many good things the Genesse County Land Bank does is help Flint residents improve vacant lots and and take part in the urban farming movement, which is just a fancy way of describing people in cities who have gardens.

"The Land Bank's Clean and Green Program started as a pilot project during the summer of 2003 in which two community groups partnered in the maintenance of 45 Land Bank owned properties on Flint’s east side. Of these 45 properties, 10 were improved with decorative split rail fencing and raised garden beds. During the summer of 2006 twelve community groups participated in the program. These groups maintained over 600 Land Bank properties and developed 12 greening projects. In conjunction with Keep Genesse County Beautiful’s Beautification awards ceremony, the Land Bank recognized participating groups and awards were presented to the groups with the most outstanding greening projects."

One impressive example is the demonstration garden at 310 W. Home Avenue, pictured above. It was designed by master gardener Phil Downs and nurtured by a band of residents and volunteers. As Flint Expatriates has already mentioned, these efforts are catching the attention of the national media.

For more information on local gardening in Flint, check out the MCC Gardening Association, the Flint Urban Gardening and Land Use Committee, and the Backyard Herbalist.

Will the Durant be saved?

Plans seem to be in place to redevelop the historic Durant Hotel. The Genesee County Land Bank has purchased the building and is working with developers to complete an interior demolition. The goal is to create housing for students and young professionals. This sounds a little risky, but it makes more sense than AutoWorld. After all, the place has been vacant since 1973, a decaying reminder of everything Flint used to be.

U.S. Congressman Dale Kildee — an Eastsider who graduated from St. Mary's — is even pushing for $150,000 of federal money for the project.

But although preliminary engineering reports indicate the building can be saved, the negotiations could still fall apart with Lansing-based real estate developer Karp & Associates. If that happens, Land Bank Chairman and county Treasurer Dan Kildee has made it clear demolition is still an option.

If you're wondering how the hotel named after GM founder William "Billy" Durant is holding up, check out this YouTube video. Warning: The camerman does NOT have a steady hand, and I got a little car sick watching this, but it gives you an idea why this is expected to be a $23 million job.

New Housing in Flint

Amid the doom and gloom about the Michigan economy, there are definitely signs of hope in Flint.

"Stone Street — located in Flint's historic Carriage Town neighborhood — once was part of a bustling city neighborhood. Although it stands empty now, victim to disinvestment and neglect, the old street is poised to recapture its residential vibrancy, thanks to the Genesee County Land Bank Authority. Plans call for construction of several new, historically sensitive homes that will increase the housing stock available in one of the city's oldest neighborhoods.

"An additional five units of housing -- donated by the Carriage Town Historic Neighborhood Association and the Atwood Authority -- also will be redeveloped by the Flint Neighborhood Improvement and Preservation Program. Altogether, this will account for $2.8 million in investment, 13 new homeownership opportunities, nine affordable housing units and two completely restored city blocks of housing in the Flint River District area, according to Amy Hovey, interim director of the Genesee County Land Bank."

Country Livin' in Flint

The Genesee County Land Bank is emerging as the darling of the national media, and with good reason. It's a positive step for dealing with the abandoned and ramshackle houses that afflict Flint as the city downsizes, to use an unfortunate term. Now National Public Radio has jumped on the bandwagon and done something we didn't think was possible — link Buick Town with rural America:

"As Flint shrinks, it's taking on an oddly rural quality. Most streets are rundown, but there are also ambitious vegetable gardens springing up under the tender care of the new owners of double lots.

Mary Lymon sits at her patio table, overlooking her new yard that boasts a cheerful flower garden, a trellis and a swing. It's a big change from the days she worried about drug dealers coming and going at the abandoned house that once stood there, she said. Once the house was gone and the land was hers.

"I just really enjoyed coming out with my coffee — felt like I was in the country," said Lymon."

The Genesse Institute

If you're just dying to know what land banking is and how it can help Flint, the Genesee Institute is the place to start. The Reports and Publications link on the site has some fascinating, albeit very unsexy, material.

Flint and the "Cowboy Economy"

What does Flint have to do with the "cowboy economy"? University of Michigan's Robert M. Beckley explains:

"Flint's most recent master plan was created in the 1960s and projected Flint would grow to 250,000. But instead the cowboy economy caught up with Flint. Since that projection Flint has been used up and discarded by the industrial revolution. A town that once housed more than 190,000 people and was projected to grow to a quarter million now holds fewer than 120,000."