The New* Detroit: How gentrification has changed Detroit's economic landscape

Tuesday, September 13, 2016 - 11:03pm

When Shelby Oberstaedt was a kid, her suburban family was hesitant to travel downtown to attend Detroit Tigers games, fearing a reputation that painted the city as crime-ridden. And while living downtown as her now-husband played football at Wayne State University, she said, those same feelings of insecurity remained.

“Living here was a bit scary,” she recalled. “Fifteen years ago I don’t even think my family would’ve come down here.”

However, Oberstaedt has chosen to stick around in Detroit, as a general manager for the Jolly Pumpkin Pizzeria and Brewery — one of many individuals part of the rapid process of gentrification Detroit has undergone over the last two decades. Gentrification, a term popularized in the ‘70s, describes the process by which low-income communities are renovated and rebuilt, attracting young professionals but also usually driving up real estate prices and relocating pre-existing residents and businesses.

Cities such as Brooklyn, San Francisco and Portland that have undergone this process are hailed today as havens for young urban professionals seeking a culturally vibrant urban experience that comes with a hefty price tag — a far cry from the affordable and even struggling reputations once attached to these communities.

In Detroit, the area known as Cass Corridor was rebranded as Midtown in the early 2000s, in an effort to redirect a history of poverty and blight. Following the city’s declaration of bankruptcy in 2013, multiple large-scale efforts to spur economic growth were launched, including a $650 million development plan involving the purchase of neglected buildings to be turned into high-end retailers and luxury apartments. Though many of these properties had been vacant for years, wealthy enterprise and spikes in rent are now characterizing the transforming reality of Midtown, Detroit, in large part because of those efforts.

The city’s crime rate also seems to be on a steady decline, with the Free Press reporting a 23-percent drop in stolen automobiles, an 18-percent fall in robberies and a 15-percent drop in burglaries since 2014, though Detroit still maintains the number-one spot on Forbes’ annual Most Dangerous Cities ranking.

The city has also recently drawn national attention for the widespread failure of its public school system, magnified by a mass “sickout” that made headlines last May, in which 1,500 teachers called in sick on May 2 after learning their pay was not guaranteed past June. The demonstration temporarily closed 94 of the city’s 97 schools.

As Detroit continues to undergo changes and face challenges, some residents and business owners argue the gentrification of Midtown is largely positive, providing jobs for locals and incentives for corporations to invest in the economy. However, others raise concerns that gentrification often overlooks the complexity of poverty, paving over socioeconomic and racial tensions with rapid real estate growth that drives out marginalized communities. In addition to spikes in property values, such developments exacerbate the wealth disparity between those in and outside of the area of gentrification. In Detroit, inhabitants of the areas directly surrounding Midtown earn on average 25 percent less per year than their central counterparts, according to The Guardian.

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The Jolly Pumpkin Pizzeria & Brewery, where Oberstaedt works, is an upscale pub located in Detroit’s Cass Corridor. President Barack Obama reportedly ordered a burger, salad and truffle fries there before attending the North American International Auto Show last January.

But Jolly Pumpkin, which opened its Detroit location in April 2015, is just one of many high-end businesses to open in Midtown within the past few years. Shinola, a luxury watch, bicycle and leather-good brand opened its flagship store just down the street from Jolly Pumpkin in 2013. The company boasts the return of manufacturing jobs to the city, operating out of an old auto lab owned by the College of Creative Studies but also assembling watches made of parts reportedly created overseas. John Varvatos, a Detroit-born men’s fashion designer, opened the doors to a new store location on Woodward Avenue in April 2015 with a star-studded black carpet complete with an Alice Cooper concert.

“It’s kind of crazy, to be honest,” Oberstaedt said of the neighborhood’s turnaround. “Now I feel comfortable walking to my car and parking nearby, and you see people from the suburbs coming here, and coming here to go out to eat or to go shopping and it’s not cheap shops — they’re expensive shops.”

Oberstaedt estimated about 95 percent of her employees live in downtown Detroit, most within walking distance of the restaurant. Some are Wayne State University students originally from the suburbs while others are native Detroiters. Some live in expensive new lofts on Woodward Avenue while others live closer to the restaurant, paying less than $500 dollars a month in rent.

Speaking to concerns of gentrification and rising rents in Midtown, Oberstaedt sees Jolly Pumpkin’s impact on the city as a largely positive one, claiming it mainly promotes fair workplace practices while renewing pride and interest in the city of Detroit.

“I think there’s just, like, that appeal to be something hip and cool and someplace that people want to visit,” Oberstaedt said, noting a boost in local morale following Obama’s visit to the restaurant and after other exciting events, such as an album release at Third Man Records, Jack White’s record label, which opened its Detroit branch in November 2015.

Oberstaedt added that Jolly Pumpkin also provides its staff members with desirable and much-needed employment opportunities.

“There’s a lot of people that were being paid minimum wage — and barely that — and working in underprivileged work environments, and they come to us and they’re like ‘Wow this is a good company to work for,’ ” Oberstaedt said. “You’re bringing jobs to their community, where they don’t have to have transportation to get to them, and they’re not the lowest paid jobs either. It’s giving them the opportunity to, first off, make a little bit more money but also be treated a little bit better.”

Paul Green, assistant shop manager at Moosejaw — a major outdoor recreation outfitter that opened a Detroit location in 2012 — echoed Oberstaedt’s opinion of the impact of a booming Midtown on Detroit’s spirit and self-confidence. He noted that, in previous years, international tourists visiting the city were most likely there for the annual Auto Show or business-related trips. Recently, however, tourists visiting his shop from places including China, Denmark, the United Kingdom and South Africa said they were visiting Detroit because they “just wanted to see it.”

Though he’s aware Moosejaw’s pricey outdoor gear may be out of reach for most Detroiters, Green said he remains hopeful that the economic successes of a booming Midtown will eventually reach the city’s struggling outer neighborhoods.

“The hope, at least from my end, is that even though we can’t directly provide goods to people who really don’t have the money to buy most of our products, we are contributing in the redevelopment of the city, which will eventually benefit everybody,” Green said. “Or it should. It darn well better.”

Green described the process of gentrification — and more specifically rent hikes in downtown Detroit — as frustrating. He maintained hope, however, that city officials would prioritize the needs of the majority of Detroit’s population when faced with issues of zoning and urban planning in the city.

“When I think about it, I try and hope that the right things happen — that people make the right decisions in government,” Green added. “They’re the ones who can decide whether or not a vacant property becomes affordable housing or it becomes a retail unit or an expensive loft.”

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For some residents, however, the perspective on the impact of new businesses is a bit different.

LSA senior Elizabeth Gonzalez, who grew up in southwest Detroit, said she finds the gentrification of Midtown problematic because her community has not yet received the benefits of the city’s economic growth.

“That’s the problem I have when I see articles that say things like ‘oh, Detroit is bouncing back,’ because my side of Detroit looks the exact same,” Gonzalez said. “My Detroit has not changed one bit … Detroit is bouncing back for people from the suburbs, the hipsters moving in, but the rest of Detroit is still the same.”

Art & Design senior Jessica Gray, who grew up in Detroit’s Seven Mile area on the western side of the city, specifically noted the racial implications of gentrification in Detroit. She said while the restoration of Midtown sends messages of hope and progress to the public, decades of neglect are felt by those who inhabit the city — those who have been calling attention to the city’s need for economic revitalization long before high-end retailers made Detroit fashionable.

“It becomes a problem because, are we, the Black people that are there, the hispanic people that are there — are we not enough to have good things?” she said. “That’s basically how it makes us feel, as the people who have been pushing Detroit this whole time. We’re not enough to have a rail built before now? We’re not enough to have all of these profitable businesses?”

Gray also pointed to racial divides potentially created by rising rent prices downtown.

“Gentrification is a problem because they’re not helping the people they’re pushing out,” she said.

Richard Smith, a western Detroit native, expressed concern over the disappearance of Black-owned businesses in Midtown.

“The migration here and everybody moving back downtown is moving the Black people out,” he said. “There’s this great New Detroit but where are all the Black businesses? They moved all the Black businesses from down there.”

Smith’s concerns are reflected by research from Brian Doucet, assistant professor of urban geography at Erasmus University College in the Netherlands, who wrote in an article published by The Guardian in 2015 that — while many benefit from the desirable transformations produced by gentrification — those transformations often depend on the displacement of minority populations.

“Those able to afford to live there enjoy great restaurants and bars, well-paid employment, safe and attractive neighbourhoods and reliable public transit,” Doucet writes. “The problem is most Detroiters cannot afford to live here. And like everything else in Southeast Michigan, race is one of the dominant factors. In a city that is 85% African American, Greater Downtown is becoming increasingly white.”

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Ren Farley, a University of Michigan public policy professor, specializes in the history and future of Detroit’s social and industrial landscape. He identified the flux of the city’s history as complex, with the current state of gentrification as neither purely positive nor negative.

“It’s complicated. First of all, Detroit is close to hitting bottom, so new investments coming into Detroit, it seems to me, are generally desirable,” Farley said, noting that the incoming high-end retail, real estate and restaurants will increase the tax-base of the city along with employment.

“Shinola has made a point of hiring local people to assemble their expensive products,” Farley added. “Nike is one of a number of shops that tries to emphasize that they are involved in a community. When Whole Foods moved in, they made a point of hiring local workers and including some local products in what they sell, so these are what seems to me, quite favorable signs.”

However, Farley noted that these benefits come with drawbacks, as the jobs such companies create are split between high-tech jobs and entry-level labor.

“Certainly, many of those are high-tech jobs and financial services jobs that require credentials beyond those typically found for Detroit residents,” he continued. “But still, the presence of those jobs generates a lot of other jobs, providing the services those buildings need and the services that people working there need.”

Though Farley identified developments in Detroit as something of an economic renaissance, he questioned the impact of revitalization — and more specifically who it’s for. Farley said these developments are so geographically concentrated in Midtown that one cannot be certain employment opportunities will open up for Detroit’s outer neighborhoods, which face high levels of poverty and unemployment.

“The major question is whether that revitalization will help the people who live in the neighborhoods around Detroit or will the benefits of revitalization primarily be for people from outside who come into Detroit to work at the new jobs that are becoming available and make some profits in the investments in new hotels, restaurants and apartment buildings that are opening,” he said.

Gonzalez described Midtown as another world compared to her own struggling neighborhood, calling Midtown a “tourist attraction” and suggesting the downtown developments were an improper use of funds.

“That money is needed elsewhere,” she said. “Our school systems are falling apart. I don’t think it’s fair, because all that money is going to places where it shouldn’t be, and it’s attracting people from the outside. It’s not doing anything for people from the inside.”

Kalaan Nix, who has lived on Detroit’s west side his entire life, said he could see both positives and negatives — while he’s grateful for the increased job opportunities presented by the increase of businesses moving to Midtown, he’s also hesitant to call the migration of people into the city a success for native Detroiters.

“There’s always two sides to a coin, so if there’s a positive there’s a negative,” Nix said. “So, to some extent, people moving back into the city isn’t helping solve the problem for people who live in the city — it’s just making it seem like ‘OK, well, we have people coming back because the city looks nice, but what about the people who are already here that haven’t left or couldn’t leave?’ ”

Even amid her critique of the city’s rapid gentrification, Gonzalez acknowledged that encouraging people to move to Detroit was not the problem, echoing some of Nix’s sentiments. Rather, she said, an abundance of visitors who fail to engage or take part in improving the community from within instead represent the problem.

“I think we really need to start with our school systems because that is one of the main reasons people who work downtown don’t live in the city,” Gonzalez said. “I think starting with that would be a good way to attract people to move into the city and not just commute in.”

For her, she said, Detroit is a city whose call is waiting to be answered — in a way that is more equitable and sustainable, extending its promise beyond the boundaries of a luxurious metropolitan epicenter.