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Downsizing Detroit: How They Found the Money to Shrink, and What We Can Learn

Cities like Detroit can find the funds and initiative to make downsizing work by identifying as many stakeholders and potential partners as possible, writes Alison Bates, who thinks that "right-sizing" is the right move for the city.
May 9, 2011, 10am PDT | Alison Bates
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The reality of Detroit is nearly common knowledge by now. The number of residents has been steadily decreasing since 1950, when at its apex the population was nearly 2 million. Right now, about a third of the city lays vacant. Detroit Free Press writer Stephen Henderson points out that "property tax revenues have fallen $10 million since 2003. Income tax receipts are down $13 million". The Motor City now suffers the highest unemployment rate in the nation, with over 25% of residents out of work. The loss of tax revenue means less money for schools, police and fire protection, and all other municipal services that sustain a city and make it inhabitable.

Green fields outside Detroit. PHOTO: erikadotnet

The Significant Expense of Demolition

In response, Detroit has recently begun implementing "planned contraction" initiatives, demolishing houses in the most decimated sections of the city and turning them into agricultural land while relocating the remaining residents. The plan is an effort to co-locate residents and services to make the most efficient use of the city space for the remaining population. Orchards and farms would ostensibly replace urban blight, adding stretches of green landscape between the city core and the suburbs.

Although contraction is motivated by a desire to save money and resources in the long term, it is extremely expensive in the short run. Detroit can only condense if the city knows where the population densities are, which of these denser neighborhoods are located near hospitals and schools, which have the lowest crime rates, and if the city has the money to safely demolish buildings and dispose of debris. a Suzanne Hackney reports in the Detroit Free Press, the cost of demolishing a single-family home is roughly $10,000. The city is interested in demolishing 10,000 homes, so the total price tag for the demolition could reach $100,000,000.

This bears repeating. It will cost one hundred million dollars just to tear down the houses. Detroit has already acquired $20,000,000 from the federal Neighborhood Stabilization Program, and about $6 million from other sources to demolish 2,500 to 3,000 of the roughly 10,000 houses considered "dangerous."

While the cost to level these houses might seem prohibitively high, this has to be measured against the cost of maintaining services to far flung areas in the city, where there could be only a few residents per city block. The population of Detroit is approximately 900,000 people, spread out across 139 square miles. Mayor Bing has clearly articulated to residents that the city will not be able to maintain services across the expanse. "If they stay where they are," said the Mayor in The Detroit News, I absolutely cannot give them all the services they require."

The sprawling pattern of Detroit has many economic impacts on the city, to say nothing of the environmental implications. With a rapidly declining population, and peppered occupancy layout, the requisite density does not exist to provide transit to many neighborhoods in the city. Many people are simply stuck where they are without access to reliable bus lines, which then limits where they can work, making it even more difficult for residents to find jobs that they can realistically get to and from. Citizen groups are working to fulfill this need, but using a couple vans to help all of the city's residents in need is not enough to solve the problem. Condensing the population into a more tightly-knit configuration would eliminate the expensive demand for bus lines to travel to the distant reaches of the city throughout the day. The economic advantages to contraction are many, and the option of maintaining the status quo in Detroit in many ways keeps residents in a disadvantaged position.

Where the Money Comes From

How did a city with such mounting budget shortfalls afford to conduct a parcel by parcel survey across the entire city? The answer is essentially that the money came from private stakeholders. Detroit is lucky in that they have leveraged substantial private dollars to research exactly what is going on throughout the city. Data Driven Detroit (D3) is a research organization whose information has been invaluable in the contraction planning effort. The group, in conjunction with two partner organizations, conducted a survey of every residential parcel in the city of Detroit (around 350,000 parcels). D3's primary data collection also assessed building type, condition, existing schools, hospitals, and recreational areas. From this data, D3 was able to create GIS maps and overlay shapefiles to get a clear understanding of the current condition of the city. Detroit is fortunate in that D3 is funded by private organizations ($1.85 million from the Kresge and Skillman foundations). Without this private capital, such comprehensive data collection and analysis would be completely impossible, and any downsizing plans would be ill-informed.

The Kresge Foundation also provided the funding to hire famed urban planner Toni Griffin to head the downsizing effort. Griffin recently gained attention with her plan to reawaken dilapidated downtown Newark, NJ, and is now focusing her efforts on Detroit. "Detroit can't possibly accomplish all these goals on its own," writes David Whitford in TIME. "Nor can the philanthropies. Even if the dozen or so major foundations currently active in Detroit were to pitch in a billion dollars over the next decade - which is possible - it wouldn't begin to fill the bucket." Since planned contraction is a strategy for distressed areas, and since the process itself requires costly planning and resources, public-private partnerships are a key ingredient in initiating an informed and effective right-sizing plan.

Creating Buy-In

Many other American cities are facing population decline, and are exploring the idea of "right-sizing". One lesson learned from the story of Detroit is to identify as many stakeholders and potential partners as possible. It's important to remember, that each and every person living in the greater region has a stake in the success of the city. Each local firm, each college or university, has an interest in the city's success. As Detroit was able to finance much of their comprehensive data collection by bringing together wealthy individuals and local firms, other cities planning for contraction should seek out those who are willing and able to help pay for the high cost of contraction planning.

A well-devised downsizing plan can make your place more attractive in the future for investment from both firms and by residents. If implemented well, Detroit has the potential to become one of the nation's most sustainable cities, where food is sourced locally rather than imported. This will likely be very intriguing to many "green" industries and firms, and to many potential residents. From Detroit, we should glean that informed "right-sizing" is an investment in the city, and potential private investors should be approached with the perspective that proper right-sizing is both a short and long term economic development strategy.

At the same time, it is important for planners to understand that there is a stigma to shrinking, and they will need to work with communities to embrace the idea that right-sizing is not tantamount to giving up. Responding to challenges and innovating is not giving up. Giving residents the best quality of life possible by being able to provide competent schools, police protection, safe roads, reliable transit, and maybe even fresh food grown locally on former residential lots is not giving up. Working to make your city the right size for its current population, while devising plans to inspire new economic development, is not giving up. As we have all seen and heard time and again, the failure of firms to innovate leads to their eventual demise (as was the case in Detroit with the Big Three). The same is absolutely true of whole cities.

The best response is to creatively adapt, and work toward coming back in a way that is responsible for current and future residents, for the land, air and water.

Hopefully we can begin to look at this right-sizing plan not with pity, but with admiration, realizing that the city faced incredibly difficult choices, and is doing the best it can to make well informed and equitable decisions. From a distance it is easy to judge these contraction decisions, but for Detroit, and for many other places that look similar (Buffalo, New York; Lowell ,Massachusetts; etc.), this is a decision to plan for today and for tomorrow, rather than continuing to look into the rear view mirror. In the coming years, these places will likely have something valuable to teach us about urban agriculture, about incentivizing density, about local and regional economic redevelopment, and about the humility of well-functioning if small cities, if we are willing to listen.

Alison Bates is an economic development specialist with Camoin Associates in Saratoga Springs, New York. Her work often focuses on economically revitalizing small communities throughout New York State and throughout the northeast.

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