Detroit's Big Comeback: Out of Bankruptcy, a Rebirth | Hacker News Reader

Detroit's Big Comeback: Out of Bankruptcy, a Rebirth

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118 pointsevo_968 comments

Downtown Detroit is kind of starting to seem like a Potemkin village. A lot of these “comeback” articles focus primarily on the development in a tiny portion of the city that honestly never declined that much to begin with, in comparison to everything else.

Crime and poverty are still insanely high. The school system is a tragic disaster. The majority of the urban area is still abandoned and blighted.

It’s really not a place to raise a family, unless you intentionally live separated from all the disfunction (private school etc) and then what’s the point?

Totally agree, although hype can at times help bring the real thing in that it raises expectations above the bar they are currently at. Side-note: it's "dysfunction"

Are the emergency services still really slow and the property taxes reasonably high?

Because if so.... Not much of a comeback. Would be like comparing Greenpoint to Canarsie

Yes and yes. My last two attempts to call 911 failed because nobody would pick up. My alarm company was on hold to get to the police department for like 15+ minutes.

Taxes are insane compared to what I would pay in a suburb that provided basic services and decent schools. I live in one of the nicest neighborhoods in Detroit but will likely leave it for the burbs in the next year. Detroit just isn’t affordable for a young family.

I wish you godspeed. I live in a 92% black, high tax neighborbood on Long Island, but at least the police answer the phone and crime is at reasonable levels!!

What does the but in this sentence mean?

"Even though I live in an area that is ethnically similar to Detroit, and also has high taxes vis-a-vis household income, I am fortunate that I still can expect an ambulance to show up at my house, unlike Detroit."

There is nothing more sinister implied.

Economic writing in narrative form is easily misleading and void of relevant information. Numbers are just sprinkled around to support the story, not to give accurate picture.

Even bad economies reach equilibrium. Declining economy can decline too fast and rebound. It seems that Detroit's population is still in decline. Decline has just slowed down. How much of it is from economic cycle is unknown.

> Even bad economies reach equilibrium

Venezuela is not there yet.

Well they are still sticking to their socialist agenda, which means centrally controlled economy instead of a dynamic market economy. Can't really have an equilibrium without allowing things to dynamically self correct through feedback loops. The only feedback right now is the continuing failure of centralized controls, which will likely continue indefinitely so long as those doing the controlling are using military force and violence.

I work downtown but live in the burbs. I totally agree. Its a strange feeling when the entire business district (which is what is seen as evidence of the "comeback") feels just like a giant Quicken campus. I see far more private security than police.

The burbs sprang up around a city and economy 3-4x as large as it is today. Coupled with an overall shift in preferences towards urban living among millennials, it seems unlikely that there will ever again be a need for as much suburban housing around Detroit as there was in 1950. In other words, is it really reasonable to expect all of these areas to rebound?

My comment was more about how the core of downtown feels more like a corporate campus rather than a downtown city, it's a strange feeling. However, I think it's reasonable to question the expectations of which areas will rebound in this era.

I am curious if there is a preference for urban living or its just a case of where the jobs are. I would quite happily live in a small town but that's not where the jobs are for me (software engineer) or my girlfriend (neurologist).

There is less economic stability, so it's more risky to be in a place with fewer employers, that by itself incentivizes wanting to live in an urban area.

In the Detroit area the vast (VAST!) majority of the jobs are out in the suburbs. There's a good bit of stuff in downtown, but almost everything here is in an outer ring like Warren, Auburn Hills, Novi, Dearborn, Southfield, etc.

I am in Europe and the opposite seems true.

The suburbs around Detroit really started taking on a life of their own recently. Far from just housing, many of them have actually developed downtowns and cultures and personality of their own as Detroit has floundered.

"Detroit" is really collection of small towns packed into a fairly dense geographical area. The City of Detroit is relatively inconsequential without Royal Oak and Novi and Grosse Pointe and Bloomfield Hills and Warren and Pontiac etc.

Novi? Is strip-mall-sprawl a personality?

The 55,000 people that live there seem to be ok with it.

Agreed. This city is a commuter city: everyone drives into downtown at 8 am and migrates out into detroit metro at 5 pm. It's a nightmare commute.

I really enjoyed working by Campus Martius but the commute was brutal. I also did not enjoy the insanely high parking prices.

I totally agree about the Quicken vibe. Dan Gilbert owns a significant portion of the real estate downtown.

You see this in a lot of places. There are a lot of smaller cities in New England and elsewhere that have gentrified at some level. But that gentrification often seems to mean that there are maybe 20 square blocks of new condos, hip restaurants, craft bars, boutiques, a nice park, a few employers, etc.--and then things outside that radius get sketchy again rather quickly.

Not true, the Woodward corridor is pushing north toward New Center and is really nice. Corktown is also seeing an investment infusion due to the train station being redeveloped by Ford and lots of housing development. Check out brush park as well and Woodbridge, downtown is pushing out. Go look at it! Things are definitely changing.

I agree with you about the disfunctional public services.

I disagree with you that downtown never really declined that much.

Woodward was mostly boarded up 20 years ago. During the recession downtown was a ghost town. It didn’t get worse because there was no one there to make it worse. It wasn’t uncommon to go downtown and not see a single person on the streets.

A revival has to start somewhere. Businesses and restaurants moving in is the start.

> We should have a fourth branch of government dedicated to science and technology.

On the rare occasion you did see someone, would you at least wave hello to them?

Being from the Detroit area, I find many of the comments here naive as one can't compare Detroit to an average urban city.

To understand what Detroit is like, watch a film like "Escape from New York" or a WW2 bombing documentary.

There are areas with no police or fire forces.

Also, the soil around mfg. plants (and downwind) have metal contamination. The air quality used to be worse than anything in China today, with choking curtains of black and red soot and oxides which precipitated into the soil.

So do your homework, get your firearm certifications and spend some time there before any relocation or investment.

It is a great location if you want cheap industrial space or your own truck marshalling yard (true story) and you don't need city services like elementary schools. Check out "Detroit Steel" to see more:

https://www.imdb.com/title/tt6403968/

a lot of detroit's problems also stems from the existence of grand rapids. i'd imagine if a company wanted a michigan office detroit wouldn't be the first on the list despite being the bigger city.

I passed on a consulting opportunity to move the city's bond finances from paper and spreadsheets to an ERP system back in 2008. At that point it sounded like no one really knew how good or bad things were financially for the city. I took an easy corporate job instead. Missed a great learning opportunity a few years out of college and wish I would have gone for it.

Happy to see them turn around.

> a few years out of college

How good were you at communicating about software estimates back then?

Probably no better than today?

I certainly am, just perhaps better at communicating that it is a futile pointless guesstimate theatre. At detail and macro project level.

Detroit New Year Gunfire 2019 https://www.youtube.com/watch?v=P3yo7tX7c_k

The winters are still horrible, and Americans are somewhat less tolerant of that than they once were.

It would take a small miracle to make Detroit into what it used to be in 1914-1960.

I don't necessarily disagree with your broader point but what makes you think Americans are less tolerant of winter than they once were? Cities like NYC and Boston/Cambridge seem to be doing just fine.

My guess is that ubiquitous air conditioning made the south tolerable.

Or it’s just a price thing. Lots of Canadians bought winter-homes in Florida and Arizona during the 08 crash.

My gut feeling is that the spending habits of people who can afford a second "winter" home don't really reflect those of the average consumer...

What I meant was cheap housing due to overbuilding.

I think it's safe to assume most people don't prefer to live in places with freezing temperatures, risk of pipes bursting, salt corroding your vehicles, roads with potholes, etc.

Only reason I can think of would be if the place had good skiing/snowboarding/snow activities, but you need decent mountains and snowfall for that.

Edit: NYC/Boston are outliers that have other exceptional offerings, especially related to economic opportunities. There is also inertia of being a place where people settled in first and set down roots, but I imagine most people would consider the weather of the upper midwest and upper PA/NY regions to be a negative.

>I think it's safe to assume most people don't prefer to live in places with freezing temperatures

How is this "safe to assume"? Given the history of the world, and migration that is overwhelmingly to places that have seasonal freezing temperatures, this seems comically ill conceived.

I love winter, even though I don't partake of winter sports. I love cooler temperatures. It's a lot easier being comfortable when it's cold than when it's hot. The number of pests, diseases, and perils are just so far fewer.

I'm not going to say something as asinine as "people don't prefer to live in places without winters" because I know other people have different tastes, but an enormous number of us seem to rather like cold weather.

My statement was not "people don't prefer to live in places without winters". I was careful to restrict it to places that result in things that I think most people consider drawbacks to quality of life. There are places with cool climates, where you don't have to deal with all of those issues.

>There are places with cool climates, where you don't have to deal with all of those issues.

Relatively few in the US. The Bay Area is something of an outlier for having generally temperate summers and having no or rare snow in the winter. If your priority is "nice" weather year-round, it's hard to beat Northern California. The Pacific Northwest mostly qualifies too but, of course, it's wetter and grayer for much of the year which many find off-putting.

The western end of Western Europe also qualifies.

This is a semi-serious suggestion as I am just a techie without enough background in the legal and political side of things, but it has always struck me that cities like Detroit and Buffalo struggle while they border the area that is the economic engine of Canada.

Could something along the lines of the schengen agreement be feasible between Canada and US border regions, making it easier for people and capital to flow between them? Not hard to imagine someone in Toronto trying their luck to start something up in Buffalo or Detroit where their costs would be a fraction of that in Toronto, but still allow them to remain close to home. People from those border cities that want to find better work in Toronto could do so more easily rather than having to move further away within the US. It would seem like a win-win for both sides.

> Could something along the lines of the schengen agreement be feasible between Canada and US border regions, making it easier for people and capital to flow between them?

Of course it could, even if states like California left the union similar cooperation can be formed

Critics never seem to imagine that

What I was thinking of is something along the lines of the agreements that some European countries have with each other, where residents that live within a certain distance of the border are treated somewhat differently. Or the special economic zones that exist in some Asian countries.

A comeback implies that Detroit is just as relevant as it used to be. But its population and economy is much smaller than it was during the 50s?

How's the real estate in Detroit? Is it too late to invest in good property for cheap?

Expensive downtown and cheap in the neighborhoods, so no, but it's far less clear to me that the neighborhoods will rebound in the way that the downtown area has (nearly all of Detroit's non-gentrified areas are overwhelmingly black, and across the midwest predominantly black neighborhoods have proven quite resilient to gentrification, for better or worse).

Was downtown ever cheap during the downturn? I only remember hearing about fire-sale prices in the neighborhoods... which were already quite low before '08.

A rebound in not necessary for a real estate opportunity to exist. Even poor non-white people pay rent and there are mountains of money to be made in rental portfolios where you would not like to visit, much less live. But it’s by no means easy money - it’s a super competitive market.

There is plenty of cheap property; it is debatable whether any of it is "good."

This is the essence of land in the Midwest. You do get what you pay for, there's no magic to it.

Equating a blighted Detroit to the entire midwest is a bit asinine. Finding no magic outside a coastal bubble might be indicitave of a deeper sentiment you are not airing.

I meant that there was no magic to lower cost of property in the Midwest, not that there was no magic to be found there.

I think you read something into my comment that I did not intend. My comment was specifically about the rundown properties in Detroit that can be had for a song. They are in such a state, however, that you would have to put in tens of thousands of dollars, at least, to make them livable.

There are properties all over the midwest that can be had for a song - run down, in Detroit or not. My sister in law just bought a nice house for 70k in Kalamazoo. That wouldn't buy you a house boat in Seattle.

My point is that if you want to be surrounded by mountains, forests, ocean, high paying jobs, and culture, of course it is going to cost more than the Midwest.

The Midwest has a plethora of good opportunities for investors. It’s not overpriced like most of the coasts. Couple that with qualified opportunity zones and things will be heating up this year.

Starting a fund soon with someone who has made millions in real estate within the Midwest. We intend to help others profit in these markets. Fund isn’t formed yet, we are not soliciting for investors yet. If you want more info feel free to check http://www.activatedcapital.com for updates.

What is the definition of over priced? Are you talking about some actual index here or just thinking in non-quantifiable terms?

Overpriced would mean in comparison to the price of another identical good at the same point in time, but since that is hard to find in real estate, I've always interpreted it to mean that the return on investment will be lower over a certain period of time for an overpriced property compared to another, either in dollar amounts and/or quality of life terms in case you're living in it.

While there is no longer as big an opportunity as there was if you bought in 2008-09 people are still doing well.

https://www.freep.com/story/money/business/2018/12/27/detroi...

Very hard to do anything downtown anymore. Or in Corktown (west of downtown) where Ford is remodeling the old train station for their research headquarters. Maybe in Mid-town and definitely in New Center.

An area just beginning to gentrify is East Village. Here's a project an entrepreneur has launched in the Jefferson Chalmers neighborhood which is further east of there:

https://www.youtube.com/watch?v=bapcgs1v62Q&t=4s

Then there's the BMW mechanic and his wife who created a new career for themselves. When the banks wouldn't lend to him his neighbors were willing to do so! This is in the New Center area.

https://www.freep.com/story/money/real-estate/2018/04/14/vir...

We’ve been sitting on zero and near zero percent interest rates for 10 years. The only reason any asset would be cheap at this point is all the other buyers attributed it with a decent amount of risk.

If you do, make sure you check for tax liens before buying.

It's somewhat been picked over. If you're looking to renovate tho there is still a lot to choose from. GF recently bought a house for 45k which will need 40k in renovation probably. But recently a house sold down the street for 150k so there is still money to be made.

New Center, Woodbridge, and North End is where I'm currently investing. Property no where as cheap as 10 years ago but you still see stories like this: https://www.freep.com/story/money/business/2018/12/27/detroi...

a question....we are forgetting history...

I live close to a city that sprang up because Gary Indiana got its first black mayor in the 1970s is Merrillville Indiana had a large group of white flight from Gary to Merrillville

How deep was the white flight from Detroit's impact on the future lived now?

If only too-big-to-fail banks declared bankruptcy back then.

Then what, Detroit wouldn’t exist, instead we have a zombie city slowly dying and giving people the chance and time to escape at least.

https://en.wikipedia.org/wiki/Detroit:_Become_Human

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