Before
Develop Detroit purchased a housing complex for senior citizens in Detroit's Woodbridge neighborhood, the socially-minded real estate enterprise invited current residents to a meeting to present a high-level vision for the development and get tenant input. According to Develop Detroit president and CEO Sonya Mays, over 90 percent of the tenants were present—it was clear they cared about the future of their building.
"We had fully engaged community sessions where we got an understanding of the deficiencies in the property, and what they might want to see," says Mays. "It was very generative."
Develop Detroit has a bold vision for the property, which includes renovating every one of the 50 plus units and constructing a mixed-use building on the adjacent vacant land. Importantly, the plan is flexible—it has to be if a developer cares about incorporating resident and neighborhood input.
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Sonya Mays, president and CEO of Develop Detroit
"We're pretty high touch, which is labor intensive," says Mays. "But for me, that's one of best parts of the work."
Develop Detroit is one of a number of companies, organizations, and professionals that are thinking intentionally about development by eschewing a purely market-driven approach. The movement, loosely called "equitable development," is primarily concerned with empowering residents where developments occur and keeping displacement to a minimum. Develop Detroit, for example, purchased the senior housing complex after it went on sale to ensure the low-income tenants could remain there.
"We think it's really important to protect vulnerable seniors from housing displacement," says Mays.
The principles of development
One of the more vocal national leaders of this movement is Theaster Gates. An installation artist and urban planner based in Chicago,
Gates has spearheaded redevelopments efforts like the Dorchester Projects, a trio of formerly vacant homes and businesses in a struggling Chicago neighborhood converted into art and community spaces.
In June 2016, Gates convened a national team of professionals from diverse fields and backgrounds to think through issues around ethics in development. Called
Place Lab, members engaged in dialogue to flesh out and articulate the
9 Principles of Ethical Redevelopment devised as part of the University of Chicago's Arts + Public Life initiative, of which Gates is the director.
The principles, which have titles like "Repurpose + Re-propose" and "Place Over Time," stress patience, flexibility, a respect for history, and utilizing nearby assets.
James Feagin, a consultant and real estate developer who was one of the Detroit representatives at Place Lab, lives out the principle of "Platforms." Feagin helped develop the
Baltimore Gallery in Milwaukee Junction, in part, as a way for emerging entrepreneurs and artists to gain expertise and exposure.
"It's a model we're sharing," he says. "Another group can come in and learn about acquiring space and seed other folks to go into other parts of the city and do the same thing."
As part of Place Lab's Detroit Delegation, Feagin also helped bring Gates to Detroit in July this year for the "Ethical Redevelopment Summit," where attendees engaged with the nine principles in a Detroit context. While speaking during the summit, Gates pointed out that the principles are meant to be flexible to different contexts. "I don't want to recreate the Black Cinema House in every city," he said, referring to another development project he spearheaded in Chicago. "Instead, here's a template for thinking about black film in cities."
Chase Cantrell, who was part of an expanded Detroit Delegation, is also providing a platform by educating Detroiters in the nuances of real-estate. He founded
Building Community Value with a tri-fold mission to do, train, and fund development.
The last two parts of that mission are being accomplished through a real-estate course, "Better Buildings, Better Blocks," which won a $157,500 Knight Cities Challenge grant. The course, which is adapted from one taught by professor Peter Allen of the University of Michigan's Ross School of Business, takes students through the entire cycle of development. Students learn how to select a property, do a pro forma assessment, and everything else related to developing a building.
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Chase Cantrell, founder of Building Community Value, speaks during a session of "Better Buildings, Better Blocks"
27 students completed the inaugural semester, a group Cantrell describes as diverse in age, race, and professional experience. In addition to connecting students to investment resources, the class concludes with a project where students select a property and go through the process of getting a loan, with money and in-kind services being awarded to winning projects.
Similar to Feagin, Cantrell uses his expertise and connections to create opportunities for people with less of both. "I make platforms for people," he says. "Philanthropic organizations are putting millions of dollars into neighborhood development, and I can get meetings with these people."
His goal is to make sure his students can get those meetings, as well.
Cantrell is also working with other equity-minded firms on a massive housing development, the Fitzgerald Revitalization Project, in northwest Detroit. In April this year,
Century Partners and
The Platform were selected to rehab 115 vacant homes, 20 percent of which will be affordable, and landscape 192 vacant lots into a park and greenway connecting Marygrove College and University of Detroit Mercy. Cantrell will be responsible for managing the vacant lots.
[Read up on The Platform and their approach to neighborhood development in
this Model D article.]
Prior to being selected as development lead for the Fitzgerald Revitalization Project, Century Partners had been buying and rehabbing homes in the Atkinson and North End neighborhoods, giving home-sellers cash and a stake in its fund—which the company further invests in the neighborhood to grow the community's wealth.
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David Alade (left) of Century Partners with Stephen Harris of Rebound Construction
Buying and rehabbing homes is usually accompanied by rising rents and property values. But an important mission for Century Partners is preventing displacement. "It's a tough dynamic, something we struggle with everyday," says partner David Alade. "We want to make the neighborhood a better place to live for everyone. But also for the people who stuck it out, who didn't leave Detroit during tougher times, by investing in and working with them to bring true economic benefits."
The company does this in a number of ways, says Alade, like not raising rents if a tenant can't afford it or using local contractors who aren't able to compete for bigger jobs in downtown and Midtown.
Century Partners will soon be creating even more opportunity for people who don't have the means to invest hundreds of thousands of dollars in real-estate. The company is taking advantage of
new Securities and Exchange Commission rules that allow non-accredited investors to make investments as small as $100, which they can do
through the crowdfunding platform Rabble.
Strategies for a more equitable Detroit
Despite the near constant news about a new Dan Gilbert-lead downtown redevelopment or hip restaurant moving into a renovated mixed-use building, developing in Detroit still isn't easy. "Detroit developers are actually some of biggest risk takers around," says Mays. "We're dangerously close to a point in time of forgetting how risky this real-estate market is."
That's especially true of equitable development, which typically does not offer the quick returns of high rent or rising property values. "It takes patient capital, a long time to turn a profit," says Cantrell.
But perhaps the only way to do development successfully in the neighborhoods is to do it responsibly. That's because, according to Kim Dowdell, a partner at Century Partners, there's a price to pay for mistrust. "In general, people are skeptical of development, which has historically done lots of terrible things."
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Exterior of a renovated Century Partners apartment building in the North End
One way to build that trust is to host community meetings, as Develop Detroit did for its senior housing project, to hear what residents want in the development. Another is by being present and available. Alade and Century Partners co-founder Andrew Colom live in the Atkinson neighborhood, and the team's manager for the Fitzgerald project lives in that neighborhood. "We're out there on daily basis, talking to people," says Alade. "We're not sitting in our ivory tower making decisions, but on the ground, talking to people impacted by development."
In the same way it's difficult to determine the economic value of trust, the same goes for culture. When a community is developed without care for its history and the culture that's already there, these developers argue, it loses something essential.
That's why Cantrell thinks it's crucial to empower minority developers. "The more we lead projects and own property ourselves, we lessen the impacts of being erased from the city's narrative," he says. "Even if you have a black, market-driven developer, it's rare to have that developer erase blackness from a project."
And yet the most straightforward way to ensure equity in development is through affordable housing. Market-rate rents may rise, but if some remain fixed, displacement can be reduced or prevented entirely. "You can't have a great, energetic city if you don't offer housing that suits a number of tastes and incomes," says Mays. "And you have to be very deliberate about that. If you don't have a thoughtful, intentional approach to development, the market will drive itself, and we'll wake up in a few years and not like where it's driven us."
Mayor Mike Duggan has asked developers that receive city incentives to commit 20 percent of its housing units for residents who make 80 percent of the area median income (AMI). Develop Detroit tries to improve on both those numbers. Its recently announced Sugar Hill development, for example, will have 25 percent of its units at 50 to 80 percent AMI.
"If we don't do better than the city's requested numbers, you get to come back and yell at me," says Mays.