The Doughnut of Despair? Not Quite

16 thoughts on “The Doughnut of Despair? Not Quite”

  1. I lived in a Detroit suburb and worked downtown Detroit (RenCen) about 25 years ago when the mayor was working hard to keep the official population at one million.
    Over the past nine years, I’ve been improving commercial/residential buildings in a central Kansas town of 3400 using federal and state historic preservation tax credits. All six of my buildings are on the National Register. Not sure how you feel about this program, but it works to keep my overall net capital expenditures down. The city doesn’t offer economic incentives.
    Most of my buildings were either empty or were about to be. Now all of the commercial spaces in my buildings (and up and down Main Street) are occupied. I started a couple of vacation rentals a couple of years ago. At least six millennials own and/or operate businesses downtown. (So much for the myth of every millennial scurrying to metropolitan areas to create apps.) My three-bedroom, two-bath apartment rents for $1200 per month (high-end for rural Kansas). Renovation on two more apartments start soon. I consider this work under the umbrella term of economic development. The locals applaud this work and thank me often (I live out of state).
    (On a side note, employing federal and state historic tax credits has reduced the capital cost of my four solar PV systems up to 55%. The percentage varies upon the final cost of historic preservation on each property. Solar PV systems are eligible for 30% tax credit. Federal rehabilitation tax credit is 20%. Kansas rehabilitation tax credit is 25%. Kansas considers the solar PV system as part of the electrical system for each building.)
    In my latest project, I convinced the previous owner’s tenants to move so my contractor could start work. They were paying about $100 to $200 per person per month, plus utilities, working for a local ethnic restaurant. They easily found another inexpensive apartment to rent.
    Which leads me to my final set of questions: At what point does (or can or should) economic development in a small town transition to rural gentrification? Is rural gentrification real? Or is it strictly an urban phenomenon? Your recommendations to reintroduce rural infrastructure to “rural” Detroit is thought-provoking.

    1. I’ve long stated that a significant portion of the population is migrating away from expensive coastal cities toward second and third tier locations in the long overlooked Midwest. The cost/benefit analysis in many premium cities (here in San Francisco for example) went negative for the middle class at least a decade ago. At the same time the Rust Belt bottomed out and is now heading back up. I’ve also been aware for decades that select rural towns are booming as more and more people seek high quality environments that are more Main Street than strip mall. So we’re in agreement.

      Tax credits of all kinds can be a positive catalysts for change in small doses. But I’me generally not a big fan since nothing seems to be built these days without a subsidy or tax holiday of some kind. I’d prefer that all the massive yet invisible subsidies for suburban expansion, unnaturally cheap fuel, and so on be eliminated so the market can find its own equilibrium. Very few towns could support their current development pattern with local funds without subsidies from the state and feds. Traditional small town urbanism of the Mayberry variety would thrive in a fully unsubsidized environment since it’s actually financially self supporting. But I’m not holding my breath.

      I have family in rural Nebraska (not terribly different from Kansas) and I’d love to live there at least part of the year if only the natural beauty and kind people were complimented with good small town urbanism. Mostly the old towns are dead and have been replaced with chain stores on the side of the Interstate.

    2. Hey 3d3 guy:
      I would love to see photos of your buildings (street photo). This is absolutely fabulous and inspiring. More examples of this are needed, because I still have yet to meet an app-creating Millenial myself – they sure aren’t moving to my town and we are inches away from the great cities of the northeast.

  2. Just read your article on a link that was at National Review online’s site. Sending it to my mother-in-law and some family friends, who all lived in Detroit before it hit what seems like the bottom, now. I do know my late father-in-law’s old neighborhood turned over to drug dealers back in the 1990s. He went back then to drive through the old neighborhood and it was a very sad experience for him. My husband and I, and our kids, live in south-central, MO, in a larger town with rural communities around us. Many of the rural towns, and those outside of our city’s limits, use wells, and receive propane, and get electricity from co-ops. However, fed. govt. regulations, the calls to end coal production, and the epa, all seem at times to be coming together to cause huge price increases to rural customers who gain their electricity from co-ops. So, for those reasons, rural utilites aren’t all 100% problem free.

    1. Detroit can look sad to people who remember when it when was at its peak many decades ago. But a new generation sees it with fresh eyes as it begins to climb back up. The Detroit of 1955 is never coming back. But it appears to be evolving into something different but possibly even better over time. Did you also read this post? Also, here’s a podcast interview where I talk about these issues with a civil engineer and city planner.

      Don’t confuse EPA regulations aimed at eliminating coal pollution with rural electric co-ops. Those are two different animals – although it may not seem that way to folks in Missouri who are being told to convert to something cleaner at great cost. Co-ops (especially newly forming ones) can be organized around other kinds of power generation.

      Natural gas generators are clean and relatively affordable at the moment and can be small in size.

      Micro hydro and wind from small dams or water wheels (if you have a year round source of flowing water) are household or village scale and can be price competitively with coal and gas.

      Texas farmland is covered in modern wind turbines that send power to big cities and no one thinks those folks are Hippies. I have family in rural Nebraska and every farm had a windmill before WWII. Most of them are still there twisting in the wind. They came from the Sears catalog and were made of nothing more complex than sheet metal. The windmills pumped water and also had the ability to generate household scale electricity.

      Solar hot water on each rooftop is the simplest and most cost effective form of domestic solar energy (a glass box with some tubing and an insulated tank) and does the job for 3/4 of the year in cold climates.

      Wood stoves (and automated wood pellet stoves) can provide heat and hot water in places where wood is readily available like Michigan and Missouri…

      The solutions will come not in a giant one-size-fits-all super convenient package, but in lots of creative work-arounds that make sense on a place-by-place basis. This may not appeal to people used to things the way they are now, but the future may require a different set of approaches.

  3. Another great post. I love your fresh thinking. Have you been invited to TED yet? If not, you should be. Are crime and poor school performance (or perceptions of such) stumbling blocks to rejuvenating these urban core areas?

    1. As with most cities in Detroit’s position schools and crime are troublesome. My neighborhood here in San Francisco had similar problems when I first moved here many years ago. The pattern is predictable. First there are poor people who manage because they have few alternatives. Immigrants arrive and make do with things as they are since the city is better than their war torn impoverished homelands. Then people like me arrive – the “risk oblivious” – artists, gays, young people looking for opportunity and adventure on a tight budget. Over time the “risk aware” arrive – middle class singles and couples without children. Eventually the neighborhood is rebranded by real estate agents, the municipal authorities start to improve the public infrastructure and civic institutions as rents and tax revenue increase. If you’re a fan this is a good process. If not, this is gentrification and displacement.

      1. The immigrants arriving stage — help it along by offering full citizenship to currently-illegal immigrants that “settle” in Detroit, Baltimore, and other cities that have seriously depopulated?

      2. This sounds like the exact opposite of the dogma in which housing is built for the wealthy, then trickles down to the middle class and finally serves the poor.

  4. Johnny, Unsure of how to send you a quick email, but I’d like to. I was there for CNU24 as well, stayed in an AirBNB for the same reasons – where I met an inspiring 28yo high school principal. I was also fortunate enough to meet and spend half of Sunday with a retired Detroit Policeman getting a deeper understanding of the neighborhoods through his eyes. I hope everyone that attended had half as impactful an experience. Love your pics, and enjoyed the read. Thanks. – Again, would be nice to connect.

  5. Great ideas. You have an interested partner in dialogues here. We’re located on Livernois near Grand River. The company we’re slowly developing to advance neighbourhood planning and improvement in the mid-west and beyond is called @MicroPlans.

  6. Not sure that turning off city services is the right solution, it could be that centralized sewer treatment turns out to be more cost effective because the pipes are already there, and correctly graded. But, thinking about the solution as a series of villages does seem potentially like the right approach.

    1. First, I didn’t say that municipal services should be turned off. I said the way to keep existing properties serviced was to convert to decentralized systems. Also, you need to factor in that the existing city pipes are already at or well beyond their useful life. Maintaining so much aging horizontal infrastructure for so few active properties is a serious financial problem for a city that’s officially bankrupt. Re-ruralization is a reasonable approach.

  7. Astonishingly obvious and common sense, but it obviously does not appeal to the “planning brain” or to most politicians, who need to be seen as doing big things for the good of “the People” while often getting the (side?) benefits from being the facilitators of moving lots of money around. You know what this post reminds me of? That book JFK wanted everyone on Capital Hill to read, The Ugly American. In it, you may recall, the author details two kinds of development oriented Americans abroad: the guys who get in the trenches (Like Cory Booker, maybe) and find lots of little ways that people can be significantly helped for very little cost. They do surgery with scalpels and lasers. Then, you have the guys who, like LBJ perhaps, who use more like a baseball bat to do surgery: decide for the people effected from afar (of course LBJ only slowly EVOLVED into this kind of “American”) what will help them best, while always demanding that the help be of the biggest and most expensive possible, while shaming those who balk at any aspect of the unwisdom of the approach. The bigger and more costly the better, because such has the previously outlined benefits of being big enough to boast about and filled with multiple opportunities for corruption in who gains from the project, which has been a huge problem with how the Democratic Party has been structured since the it’s beginnings in the Northeastern part of the USA. Yes, the Republican Party, since the days of Lincoln, has always had a different species of corruption, which has always tended to benefit the much smaller pool of “business bosses”, from the railroads to the “Koch Bros.”, but my assessment has always been that such corruption, even though it must be vigilantly watched and regulated as much as “Democratic” corruption, is simultainously easier to malign: “giveaways to the rich! (Oh, yes, but that always goes on from the Dems too)” but in realty provides more benefits to society as a whole (since it usually tends to be more market-driven and done in a more cost-sensitive and profit driven way so it doesn’t work on a utopian sheen of price-being-no-object and a reality of price inflation actually being a benefit (let’s hire 6 union employees to do a job that one non-union employee could do) while the possible result that the thing is a white elephant or even destructive to the people it is supposed to help is easily waved away do to the good intensions of the planners and not the motives of profit from the marketplace, as opposed to the profits made through the appropriation of tax dollars.

    What you are proposing is what tends to happen on its own, without interference by authorities, and could even be helped by the authorities if they could just be convinced that there was SOMETHINGS in it for them, other than the satisfaction from helping people. Unfortunately, there are many perverse incentives in large organizations generally, and governments especially. I have long tried to figure out WHAT exactly could be done to incentive those in Government (and more recently those in Higher Education) to work toward keeping costs down and positive impacts high, and what I unfortunately keep running into is the depressing specter of these barriers being there for very unreformable reasons: there’s just too much self-interest baked into those who work in government, which is just a larger human nature problem. Why do more with less, when doing less can justify higher taxes so that “more” can be done? Why ever come close to solving a problem when that means budgets will be cut, people will lose jobs and those outside contractors who get rich will have to find new ways to make lots of money?

  8. This and many other things in our national life constantly reminds me constantly of a quote from Prime Minister Winston Churchill said about our country when the US Congress finally passed Lend-Lease Act in March 1941 for Britain” “You can always count on Americans to do the right thing – after they’ve tried everything else.” Still at now 73yo, having lost two houses in two GOP economic downturns, I don’t understand why our nation can’t see or understand such empty properties as “golden opportunities” for citizens living in Detroit. Isn’t owning your own home the center piece of the American dream? The wealthy will certainly be making money off of this, why not benefit citizens that will never have the opportunity of property ownership?

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