Why Detroit Is Tearing Down A Highway
1,871,418
Published 2022-08-10
CLARIFICATION (Aug. 12, 2022): There were 708 housing structures built in Detroit between 2010-2019, not 708 homes as mentioned at 6:44 in the video.
A new wave of development is rippling through downtown Detroit.
“Walking around Detroit in 2008 or 2009 is not the same as walking around in 2022,” said Ramy Habib, a local entrepreneur. “It is absolutely magnificent what happened throughout those 15 years.“
Between 2010 and 2019, just 708 new housing structures went up in the city of Detroit, according to the Southeast Michigan Council of Governments.
Much of the new construction traces back to the philanthropic wings of large local businesses. For example, Ford Motor is nearing completion of a 30-acre mixed-used development at Michigan Central Station. The station sat abandoned for years as the city fell into bankruptcy.
Detroit’s decline into insolvency formed amid 20th century globalization in the auto industry, according to economists. The city’s population fell from 1.8 million to 639,000 in the most recent but controversial count by the U.S. Census. “With the population leaving, with the infrastructure staying in place, it meant strains on the city. Cumulatively, they started to mount over time,” said Raymond Owens III, a former senior economist at the Federal Reserve Bank of Richmond.
The 2007-08 Great Recession left another round of scars on the city as scores of homes fell into foreclosure. The U.S. Treasury Department has since funded the removal of 15,000 blighted structures in the city. “A lot of Black people are leaving the city. So sometimes that identity can change and shift in certain communities,” said Alphonso Carlton Jr, a lifelong Detroit resident.
Local leaders have used tax and spending policies to advance economic development downtown. In July 2022, the Detroit City Council finalized a tax abatement for the real estate developer Bedrock to finance the $1.4 billion Hudson’s site project. The abatement could be worth up to $60 million over its 10-year span. Bedrock is in a family of companies controlled by billionaire investor Dan Gilbert, who moved several of his businesses downtown in 2010.
Bedrock told CNBC that decision was consistent with the council’s handling of other major developments, due to high local tax rates. One local analysis suggests that in 2020, Detroit’s effective property tax rate on homes was more than double the national average. Detroit’s new tax, spending and placemaking policies have drawn the interests of bond investors in recent years, providing another source of revenue for the local government.
Watch the video above to learn more about Detroit’s escape from bankruptcy.
» Subscribe to CNBC: cnb.cx/SubscribeCNBC
» Subscribe to CNBC TV: cnb.cx/SubscribeCNBCtelevision
About CNBC: From 'Wall Street' to 'Main Street' to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more.
Connect with CNBC News Online
Get the latest news: www.cnbc.com/
Follow CNBC on LinkedIn: cnb.cx/LinkedInCNBC
Follow CNBC News on Facebook: cnb.cx/LikeCNBC
Follow CNBC News on Twitter: cnb.cx/FollowCNBC
Follow CNBC News on Instagram: cnb.cx/InstagramCNBC
#CNBC
Why Detroit Is Tearing Down A Highway
All Comments (21)
-
I find it so egregious when people say Detroit is becoming gentrified and people are being displaced. For many decades, most of the downtown area, midtown, corktown, river town, etc. were almost completely empty. Many of the buildings in these areas were abandoned or demolished over the years. Now they’re becoming more developed and people and businesses are moving in. So you can’t really say those neighborhoods are being “gentrified” when there were little to no people there to begin with.
-
The bottom line is that suburban sprawl, and the infrastructure to support it, was completely unsustainable in Detroit. And that is important to understand because there are many, many, many other cities that built their suburbs this way, and just a bit of population and job loss in any of them could bankrupt them the same way Detroit was bankrupted. We need to build our cities smarter, denser, and more efficiently.
-
Love how they skipped over the entire corruption issues in Detroit.
-
These exact same dynamics have gutted urban areas around the United States. The way we've built our country around cars has resulted in all sorts of tragedies. I visited 7 countries in Europe back in the summer of 2003, and I was blown away by how futuristic and clean they were, especially the Germanic countries. Every little town in Europe is walkable and connected to bigger places by rail, so you don't get these isolated places where people are trapped by their lack of a car.
-
Road systems cost far more to maintain than people realise - suburbs often lose money even when full. The tearing up of the tram system arguably quietly triggered the financial rot in Detroit.
-
Detroit is like the city I Use to play in Cities Skylines and SimCity 2013. In the first few months, the city thrives exponentially. Then after a while it shows signs of problems in infrastructure. Later population starts to decline and finally I have to restart everything.
-
I used to live just north of that freeway and i can guarantee that the city's severe crime problems have nothing to do with the positioning of the freeway. Trust me.
-
I loved visiting Detroit twice for car shows downtown. It was a blast. My grandpa was from Detroit and moved to the Dayton area to work for GM. I would love to go back to see more.
-
I worked in/near downtown Detroit for almost 40 years. It was sad to watch it's decline. It was also aggravating to watch corrupt and bungling political hacks accelerate the decline.
-
I recently decided I would try to live in downtown Detroit, only to find out that any one bedroom apartment (not infested by roaches) costs upwards of 1800 a month. I would love to be a part of Detroit's future, but there needs to be more affordable, safe, and clean housing in the city proper.
-
What’s important is to make Detroit NOT dependent on one major industry again like was in the past. Detroit should be a place where various industries are developing so in case one industry goes down, the city would not go down too.
-
The attitude that "re-development is good, but gentrification is bad" is oxymoronic.
-
This could be the biggest social urban experiment. Rework the whole city to be friendly to middle class. Construct affordable houses, rework mixed use areas so ppl depend less on cars, use technologies to make the city the city of future, improve roads to provide better public transportation.
-
I'm almost ½ a century old. Detroit has been said to be "coming back" my whole life. I-375 is the least of their problems.
-
I’m from Toledo but I go through Detroit about 2-3 times every year to visit family. I love the revitalization of the city and the progress I’ve witnessed over the last 6-8 years. I say when one American city grows and prospers we all do. Toledo has started to do some things too. I’m excited for this whole area (northwest ohio, southeast Michigan) to make a comeback.
-
It’s so sad to see all of the gorgeous old homes just wilting away….as a old home lover it breaks my heart
-
I've visited Detriot in 2019 because Motown Studio Museum was on my bucket list. I've seen the abandoned communities in the outskirts but it if you will just wander around the downtown area it was actually pretty nice and relatively clean. I felt safe walking around. They have nice museums, beautiful skyline, the river park was stunning and the Greektown was very charming. Just comparing the downtown Detriot in other US cities I think Detriot has a lot more to offer. It was worth a visit.
-
lost me at “construction work could kick off by 2027”. my life is going to be halfway done by the time these urgent infrastructure projects will be complete…
-
Despite all this, Detroit is still a very underrated city that maybe one day will overcome its image the media portrays it as. It's not perfect, but it's improving
-
Not a mystery developers said hell no, it's crime ridden and couldn't even handle having a grocery store.
