Six years after emerging from the largest municipal bankruptcy in American history, construction cranes once again dot Detroit’s skyline and large-scale investment is flowing into scores of high-end commercial and residential developments throughout the city. Ford is in the midst of remaking Detroit’s once grand but long since decrepit Michigan Central Station into a hub for tech-savvy workers and engineers working on autonomous vehicle projects. Detroit native and Quicken Loans founder Dan Gilbert has snapped up dozens of landmark properties in the city’s downtown core and surrounding neighborhoods, churning out hundreds of thousands of feet of high-end office space and gleaming luxury residential units. Without a doubt, the Motor City has come a long way since the auto industry cratered, sparking an investment and population exodus that brought what was once the nation’s fourth-largest city to its knees.
But just a few miles away from the gleaming downtown towers of General Motors’ headquarters in the Renaissance Center, it becomes all too apparent that the city has amassed thousands of vacant commercially zoned real estate parcels across Detroit, many of them along key urban corridors with significant unmet retail needs. “Many of these properties came into the city’s ownership through tax foreclosure, and the city hopes to get them back into productive use,” explained Kyle Ofori MPP/MUP 2019. With funding from the Ash Center and Harvard's Joint Center for Housing Studies, Ofori and HKS classmate Jana Pohorelsky MPP 2019 spent the better part of the past academic year working with the Detroit Economic Growth Corporation (DEGC), a quasi-public development agency, to understand how the city is working to dispose of this accumulated commercial real estate portfolio while ensuring that Detroiters equitably benefit in the city's economic rebirth.
With the largest proportion of African Americans of any major city in the country, city officials and community organizations have made clear that Detroit residents and small-business people alike must have the opportunity to benefit from the city’s revitalization. Speaking of many of the city’s longtime residents who weathered decades of disinvestment, DEGC CEO Kevin Johnson emphasized he is committed to a more equitable future for Detroit's residents: “Their stories are critically important as we work together to accelerate growth and ensure that the benefits of growth are accessible to everyone.”
With DEGC as their Policy Analysis Exercise (PAE) client, Ofori and Pohorelsky partnered with the agency to help improve not only how it disposes of its commercial real estate portfolio but also the process that determines who ultimately gets to own or use those properties. With investments being made in commercial corridors scattered well beyond the downtown core, advocates and community organizations want to ensure that all Detroiters have the opportunity to participate in the city’s resurgence. “We wanted to make sure that emerging developers, especially developers of color, as well as small-business owners, can take advantage of these opportunities,” said Pohorelsky.
One of their first recommendations was to better publicize the process by which the city puts some of its accumulated commercial real estate holdings on the market. “For first-time developers, navigating the city’s real estate disposition process can be a real challenge,” said Ofori. “We thought that if the real estate sales process were demystified and properties more visibly marketed to the public, Detroiters looking to break into the market would have a better opportunity to successfully launch commercial development projects,” Pohorelsky added.
Before starting their PAE, Ofori and Pohorelsky were keenly aware of the importance of using data to inform the local government decision-making process. The pair served as coordinators for the Innovation Field Lab, an experiential learning course conceived of and co-taught by Ash Center faculty affiliate Jorrit de Jong along with Joe Curtatone, mayor of Somerville, Massachusetts, and an Ash senior fellow, which helps implement data-driven solutions to combating blight in a number of cities in Massachusetts. The experience working with department heads and other cities leaders as part of the Field Lab convinced the two that refining Detroit’s data-collection efforts would be key to more equitably guiding the city’s real estate disposition efforts. “They could start by collecting data systematically on applicants working to purchase commercial real estate as well as analyzing previous data to understand if minority and female developers have access to the real estate disposition process. The data could also illustrate where these applicants might be encountering barriers in the development pipeline," said Pohorelsky.
The team also made recommendations for better matching potential developers to available real estate parcels owned by the city as well as to resources such as low-interest loans and financing vehicles. But, as with many databases, its functionality is only as good as the data it holds. “We suggested DECG expand the database to include all of the publicly owned, city-owned commercial parcels,” recalled Pohorelsky, and to share that database with city agencies so that they are all working from the same page.
For both Ofori and Pohorelsky, the PAE was an opportunity to take many of the lessons learned from their work with the Innovation Field Lab and apply it on a much larger scale. “It was a tremendously rewarding experience,” said Ofori. “The chance to be a part of Detroit’s revitalization, particularly in the city’s neighborhoods, was a powerful capstone to my time at HKS,” Pohorelsky added.
Written by Daniel Harsha, Associate Director for Communications and Public Affairs