Detroit's mayor takes on gentrification as his city bounces back from bankruptcy
DETROIT — “Hello, mayor,” an elderly African-American woman calls to Mike Duggan from behind the wheel of a burgundy Buick as she slows down to get a look at the nearly 20-person entourage that has descended on her quiet residential street in Detroit’s Fitzgerald neighborhood. Dotted with overgrown lawns fronting windowless, gutted houses left for dead after the subprime mortgage crisis, Fitzgerald is the latest part of the city targeted for redevelopment, and the woman passing in her car is clearly pleased. “Good job!” she says, giving a Duggan a thumbs-up.
A short, stocky, balding white guy who looks as though he was plucked from central casting for the role of a veteran detective on a ’90s cop show, Duggan is no stranger to blocks filled with dilapidated single-family homes. As we walk to inspect one of the 115 Fitzgerald homes the city is in the process of rebuilding — part of the Fitzgerald Neighborhood Revitalization Project that will also add a park and a bicycle greenway — other residents flag him down to lodge complaints about issues as mundane as an overgrown tree and as serious as a crumbling, forsaken home yet to be boarded up. A natural at retail politics, Duggan, 59, welcomes the interactions, and pulls out his cellphone to call members of his administration to insure immediate action on both matters.
“Expectations are rising,” Duggan, who in 2017 was reelected to a second term with an astonishing 72 percent of the vote in a city where just over 82 percent of the residents are black, told Yahoo News. “People are putting more demands on me and more demands on the administration, and I think that’s a really good thing and that will keep us motivated to work hard.”
When Duggan won the office in 2013 in the aftermath of the Great Recession, there were roughly 40,000 deserted houses across the city, some with fur coats or sets of china still inside. Under a program that favors renovation over demolition to try to preserve the mid-century architectural character of neighborhoods, that number has now been cut in half, with many of the units set aside for affordable housing.
Walking through some Detroit neighborhoods still feels a bit post-apocalyptic, thanks to the dramatic thinning of its population and the abundance of abandoned structures it used to inhabit. In this year’s State of the City address, Duggan said he wants 8,000 more homes demolished, 2,000 sold, another 1,000 renovated and 11,000 more boarded up by the end of 2019. While those figures attest to the scope of the task ahead, the strides the city has made as a whole during Duggan’s tenure can still be measured in concrete ways.
In 2016, for example, Detroit completed a $185 million streetlight repair project. Police response times have been cut from 50 minutes in 2013 to 14.5 minutes in 2017, and ambulance response times fell from 20 minutes in 2014 to the national average of 8 minutes this year. In April, just three and a half years after Detroit emerged from the largest municipal bankruptcy in U.S. history, the city shed financial oversight by state regulators. In May, a tally of the city’s homeless population showed it had decreased for the third year in a row. Detroit teachers learned this month that the state had approved $30 million in raises, bonuses and reimbursement funds. And after peaking at a staggering 28 percent in 2009, the city’s unemployment rate has now been cut to below 8 percent, thanks in no small part to the relocation of the mortgage titan Quicken Loans to the city in 2010, a construction boom that has transformed the character of downtown into a modern metropolis, and an Obama administration plan to save the U.S. auto industry that helped staunch the exodus of jobs from Michigan.
Yet most Detroiters, including the mayor, refuse to sugarcoat the recovery.
“I don’t spend a lot of time promising. I just say, here’s what we’re doing next and here’s why we’re doing it and then we do what we say,” Duggan said as we continue down Prairie St. “Over time, you don’t restore trust by making more promises; you restore trust by actually doing what you said you were going to do.”
Known as a “truth teller,” to use the words of Detroit Housing Director Arthur Jemison, Duggan has not shied away from confronting the legacy of racist policies that awaited African-Americans lured north in the early decades of the 20th century to work in auto factories. A year ago, the mayor delivered a remarkable history lesson to the well-heeled attendees of the Mackinac Island Policy Conference about Federal Housing Administration guidelines that kept blacks in the city from obtaining home mortgages and led to the construction in 1941 of a wall bordering the heavily African-American 8 Mile neighborhood to segregate it from a new housing development for whites.
“He’s been willing to just say some stuff directly that needed to be said,” Jemison said. “There’s a credibility that comes from that.”
Aaron Foley — the 33-year-old author of How to Live in Detroit Without Being a Jackass, a meditation on the gentrification of his hometown by hipsters relocating here for cheap rent from all over the country — said Duggan’s speech helped solidify his support for the mayor.
“When you deliver that kind of message about this is why black people are on this side of the wall in 8 Mile versus the other side of the wall, that gets people talking,” Foley said over a drink at Motor City Wine, a bar and wine shop located in the once heavily Irish Corktown neighborhood. “This is a history that we all know in Detroit, and for the city government to acknowledge that in the way that it did on that platform, it did resonate.”
Hired by Duggan in 2017 to serve as the city’s first “chief storyteller,” a public relations job in which Foley draws on his background as a journalist to help tell the stories of residents across Detroit, Foley is a champion of the “everyday people” he sees as making the city unique.
“I’m trying to show what Detroit is made of. Show all the nooks and crannies of Detroit,” Foley said, “and get to all the people who sometimes don’t get the coverage that you see.”
He takes that role seriously and doesn’t shy away bringing up the impoverished 48205 neighborhood, where gang members still use Instagram to document their crimes. Nor does he want people to forget that the wall built to segregate African-Americans still stands in 8 Mile, though schoolkids have since adorned it with murals depicting civil rights heroes.
“It’s not just midtown. It’s not just downtown, or the new shiny buildings or the new statues that go up,” Foley said about the character of the town he doesn’t want to see lost in the current economic revival.
As Duggan works to make sure that Detroit doesn’t go the way of Brooklyn, Washington, D.C., or San Francisco — pushing out lower-income residents as rents and home values rise — his speech had a practical effect too.
“Every single time that we had a building where the federal [housing] credits were expiring and people were going to get forced out of their affordable units, I had to sit down for hours with the building owner to convince them why those who stayed were entitled to be there, and I thought: I need to do just one speech and explain that this is the right thing to do,” Duggan said of his Mackinaw PowerPoint. “Since then there’s been just great support for the direction we’re going in the city. We have very little pushback now from our developers over making sure that what they’re doing is equitable.”
Duggan’s passion for Detroit is personal. Born in the city, he graduated from Detroit Catholic Central High School in 1976 before going on to college, and then law school, at the University of Michigan. He got his start in politics in 1987, when he was elected deputy county executive of Wayne County. Two years later, he won the race for prosecutor for the county. In 2004, he took a detour in his political career, becoming the president and CEO of Detroit Medical Center, and was still there when the mortgage crisis hit, laying waste to the city around him.
Though he lived in the suburbs with his family and commuted in to work each day, the decision to move back to Detroit proper came in 2012 at what may seem like an unusual juncture in Duggan’s life.
“Our youngest son had left for college. We were at a point of being able to make a life choice, and it was a question of whether to take up golf or do something else,” Duggan said.
On the verge of declaring bankruptcy, the city was at a low point, and Duggan asked his wife, Lori Maher, to join him on a tour of the neighborhood where she’d grown up. The couple drove more than 10 miles along Outer Drive, through the Brightmoor and Rosedale Park sections on the city’s west side, in darkness — not a single streetlight was working.
“She hadn’t been there for several years and reacted very powerfully,” Duggan said.
After reestablishing residency in the city, Duggan embarked on an improbable, last-minute write-in campaign to become mayor, taking his campaign slogan, “Every neighborhood has a future,” to more than 200 house parties.
On Nov. 5, 2013, Duggan won 55 percent of the vote, becoming the first white person elected mayor there since 1970.
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‘We haven’t really even started yet’
Though the decade that culminated in Detroit’s July 2013 bankruptcy filing was incredibly painful for the city — with just over a quarter of its residents ultimately fleeing the city — the financial reorganization that followed cleared its balance sheet of billions in debt and allowed city hall to restart basic services, which were key to sparking the current revival. Another big test, however, looms in 2024, when Detroit resumes payments on its sizable pension obligations. In anticipation of those bills coming due, Duggan’s administration has been socking away millions each year, but it needs to ramp up its tax base to keep making those payments.
Along with the Ilitch family — patriarch Mike Ilitch founded the Little Caesars Pizza franchise, bought both the Detroit Tigers and Red Wings, and has planned housing near the sports stadiums he has erected in the city — the biggest business player helping Duggan meet the financial challenge is Quicken Loans founder Dan Gilbert. Detroit’s largest employer, Quicken became the city’s biggest taxpayer shortly after the company relocated its headquarters here from the suburb of Livonia in 2010, a time when many wondered whether Detroit could possibly rebound.
“I was warned by so many people, ‘Oh, you’re crazy, why are you doing this?’ mostly because of the government. ‘They’ll kill you,’” Gilbert said. “They’ll do this, they’ll do that. But we have not experienced it.”
When Duggan was elected three years later, Gilbert immediately recognized him as different from his recent predecessors.
“He’s an operator, an executor and he also recruits pretty good talent around him,” Gilbert told Yahoo News from his 10th-floor office overlooking Campus Martius Park. “He has a noble purpose; he’s not like your typical politician. He’s about the what, not the who.”
Quicken and its development company, Bedrock, have $5.6 billion in real estate projects in the works for downtown Detroit, including a $1 billion investment to build the city’s tallest building on the site of the historic Hudson’s Department Store, which was imploded in 1998. Gilbert has also made sure his businesses have contributed to Detroit’s civic life, encouraging its 17,000 employees to volunteer hundreds of thousands of hours to civic projects and donating millions for the construction of a light-rail line, which opened in 2017.
Still, Gilbert acknowledges that his companies haven’t always portrayed the idealistic vision of inclusion put forth by city hall.
“We made a mistake once a while back,” Gilbert said of a short-lived sign in the window of a downtown Bedrock office. The text of the display read “See Detroit like we do” and the accompanying photo showed a busy street scene absent any African-American faces. Gilbert publicly apologized for the ad and said the company had “screwed up badly.”
Remarkably, thanks to Gilbert’s investments in the city, downtown Detroit has become a hot place to live. In the past two years alone, rents in greater downtown have risen 37 percent, compared to 26 percent citywide. While that change may be good for the city’s tax revenues, it also has some residents wary about the mayor’s alliances.
“I have nothing to say against him, but he walked in the door at the right time,” Kevin Lundy, a 60-year-old aspiring photojournalist, said of the mayor as he stopped to take pictures of Gilbert’s City Modern development in the Brush Park neighborhood. “What he’s doing is riding the wave. But the mayor can’t do nothing now, because Gilbert bought him.”
Lundy, like many Detroiters, believes the current pace of development will transform the city into something unrecognizable and unaffordable.
“What they’re showing us is that money is running everything,” Lundy said. “Within five years, this will all be a gated community. If you’re not an IT person, you’re still not going to be able to afford it.”
Gilbert is sensitive to that criticism, but understands why local residents bristle when outsiders portray downtown redevelopment as striving for a “blank slate” that wipes clean Detroit’s storied yet turbulent history.
“They’ve stuck it out, through the bad and the good, and all of a sudden there’s some guy coming in with this, ‘Hey, you know I’ve got a blank slate,’” Gilbert said. “I would rather look at it as you’re taking the people who’ve stuck it out, and they have done some great things on the ground level here. Put in some more capital and some more people in to it, enhancing and multiplying and making it better for everyone.”
Investing in Detroit when its fortunes were down was a spectacularly savvy move, but Gilbert says he is also on board with Duggan’s vision of a city that isn’t segregated by race or income. Twenty percent of the rental units at his Brush Park development will offered at affordable housing rates, and another 60 of the 410 residences for sale will be set aside for low-income residents as defined in relation to Detroit’s median income. Going forward, Gilbert has also committed to helping the mayor meet his goal of building 2,000 affordable housing units over the next five years. He is wholly bullish about Detroit’s future.
“We haven’t really even started yet,” Gilbert said, “because everything is relative to people and it has been 60 years of nothingness as far as growth and new buildings, construction and people moving in and all of that. The trends gets bucked for a short period of time and people think, ‘OK, we’re in some sort of peak’ or something. I don’t think we’re close to a peak. The new construction stuff is just getting started. We’ve got 50 to 60 years of this to just catch up.”
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The lessons of Detroit
Another notable Duggan ally is Jamie Dimon, CEO of JPMorgan Chase, a bank with a long history in Detroit.
“We’re already the largest bank in Detroit, and one of our founding banks was National Bank of Detroit, which was started by General Motors in the Great Depression,” Dimon told Yahoo News in a phone interview. “We’ve been watching Detroit as a train wreck for twenty years, and I was having that conversation with Lee Saunders, who runs [the public-employee union] AFSCME, and he started telling me how worried he was about Detroit. I said, ‘Yeah, I’ve been worried about that too.’ But I also had read about this mayor who had been elected, who is this white man who did a door-to-door write-in vote and was saying all the right things, not ideology, but ‘Let’s get the street lights back on, let’s get garbage picked up, let’s try to create more jobs, let’s create more affordable housing, let’s get companies to help us.’”
Duggan met with Dimon in 2014 and convinced him of the need to start a fund to extend capital to minority entrepreneurs who couldn’t get loans in the wake of stiff regulations put in place as a consequence of the great recession.
“The mayor is the Pied Piper. He said, ‘Anyone who can help me, I’m open arms.’ It’s pro-business, pro-union, pro-teachers, pro-schools,” Dimon said. “There’s none of this stuff that is divisive, and he does it with a smile and he keeps on trying. He’s had some setbacks, and he just goes at it again. He’s very, very efficient.”
The loans to minority business owners also turn out to be good business. Dimon says that of the hundreds Chase has made since starting the program, only one has gone into default, a lower rate than the bank’s traditional loans.
“Through CDFIs, local institutions, we made $6 million dollars in loans to small businesses,” he said, referring to Community Development Financial Institutions that target funds for economically disadvantaged groups. “It was so successful we made it $18 million, and now it could be maybe 150 businesses. And these are businesses in Detroit that are going to hire people and hopefully will succeed. That program — so far so good — we’re taking it to other cities.”
Chase has now invested $150 million in Detroit, and Dimon applauds the mayor for looking for “real solutions that actually work” to reverse the policies that discriminated against African-Americans. “I agree with him,” Dimon said. “One hundred and fifty years after the Civil War, we haven’t gotten anywhere close to parity. A lot of it is because public policy didn’t work.”
The alliance between Duggan and Dimon may seem strained. The Democratic mayor doesn’t shy away from calling out the role banks played in the mortgage meltdown of 2008, for instance. JPMorgan Chase, while helping stabilize the industry by purchasing Bear Stearns and Washington Mutual at the height of the crisis, also agreed to pay a $13 billion settlement with the U.S. government for its own role in selling risky mortgage securities that helped lead to the great recession that so impacted Detroit.
But working with Duggan came as a revelation to Dimon, who now sees the engagement of a mayor as a crucial ingredient in the decision about whether Chase will invest in a city.
“When the mayors are elected by special-interest groups, you can pretty much kiss the city goodbye. That’s kind of what happened in Detroit for 30 years,” Dimon said. “Two of the mayors ended up in jail. The unions didn’t work well with the car companies, so they had to move more and more jobs out. And when people work together, it’s amazing what you can accomplish.”
On the success of the minority entrepreneur loans in the Motor City, Chase plans to start up what Dimon calls “mini-Detroits” in Chicago, Washington, D.C. and San Francisco to help fund lower-to-middle-income mortgages as well as a fellowship initiative aimed at getting boys in minority areas through college.
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Detroit’s moment, again
After decades of claims by politicians that their city has finally turned a corner, Detroiters rightly remain skeptical that better days are here to stay. Yet you get the sense this time that maybe the city finally found rock bottom.
“I’m spending all my time trying to get my colleagues to make the most of the moment, because again, it’s not often that you have this level of mission and collaboration,” Jemison says.
The bright young professionals who work for the housing director agree. “I moved away for eight years and moved back partially because I felt like this was a place to be that was going to grow into the future,” Development Director Katy Trudeau, 37, says about accepting her first public-sector job. “I’ve always felt, even at its lowest, that Detroit at its essence was a very beautiful city.”
That pride may seem incongruous for those who only know Detroit from the dire media images that local residents refer to as “ruin porn,” but you hear it voiced often.
“I tell them, ‘Downtown is coming back — come visit,’” said Cherryl Harper, the associate manager of a building the mayor helped secure for affordable housing for senior citizens. “The thing is everybody’s scared, and that bothers me because there’s bad people wherever you go but Detroit is not bad. Every city has bad parts. We’re a good city. We’ve got good people.”
In many ways, Duggan’s popularity and success in Detroit can be attributed to the fact that he has echoed the argument laid out in Foley’s book.
“You become a non-jackass by respecting the city’s history, learning about the entire city — not just downtown, midtown and Corktown — knowing that Detroit has more than 200 neighborhoods, not just the three you read about on Reddit, and also realizing that a city that has a majority black population has suffered the brunt of a lot of the systemic damage that we’ve seen across black populations across the country dating back to slavery,” Foley says. “Detroit has suffered the brunt of that, and there’s no magic bullet or panacea that can solve all of the city’s problems.”
For Duggan, continuing to bring down the rate of violent crime and growing Detroit’s population after decades of decline remain central objectives, but the biggest problem he sees impeding the city’s recovery is its exorbitant car insurance rates.
“We have an absolutely scandalous no-fault system in this state that allows hospitals and trial lawyers to rip off tens of millions of dollars,” Duggan said, frustration rising in his voice. “It is falling on the poorest residents, not just in the city but the surrounding suburbs. We’ve got folks here paying $4,000 a year to insure a car and it’s got to be fixed. You can get to the suburbs and do $3,000, but if you go to Cleveland, it’s $1,000.”
But almost immediately, a smile returns to his face. “We’ll get it done,” he says about the prospects of convincing the legislature to help lower car insurance rates that are the highest in the nation.
Back at the house being renovated in Fitzgerald, the mayor exchanges greetings with the contractors who are replacing foundation supports and rewiring the interior.
“Still wearing that Tigers hat?” the mayor calls to one of the workers.
“Yes sir,” the man responds.
“After what happened the last few games, I’m not so sure,” Duggan says with a laugh.
“I’ve got to hold tight,” the man replies, smiling. “I’ve got nowhere else to root for.”
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