

How A Young Community Of Entrepreneurs Is Rebuilding Detroit - jongold
http://www.fastcompany.com/3007840/creative-conversations/how-young-community-entrepreneurs-rebuilding-detroit

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calbear81
It's been really interesting to look at Detroit as an outsider since I've been
coming every few months and working out of the Detroit area for about 10 days
each time and making mental comparisons to San Francisco and the valley.

The biggest challenge I see is that the area with the greatest concentration
of available low-priced office space (downtown) is also where I wouldn't want
to live. Once you spend some time in Detroit, you understand why it's called
MotorCity, it's highly pedestrian unfriendly and I wouldn't trust the public
transportation system unless I'm willing to risk my safety.

The other challenge is that there are towns/areas around Detroit that seem to
be better fit for building a new tech/startup hub when compared to Downtown
Detroit when it comes to quality of life, pedestrian-oriented, and safety:

\- Corktown - closest thing to the Mission, this area has an edgy industrial
loft type of gentrification going on with a lot of young hip folks. This area
is right on the edge of downtown but you go a few blocks away to look for
housing and you encounter 50% burned down or houses in disrepair which means
you can't really walk around the area feeling safe once it gets dark. I
wouldn't walk there in the daytime given how few people are in that area and
the number of abandoned properties.

\- Royal Oak - town about 11 miles North of Detroit. It's like the Marina
district, lots of trendy hip shops, safe to walk around, good quality housing
and vegan food options as well as good cultural scene. This area has the shops
and lifestyle that Downtown is lacking.

\- Birmingham - further north in the suburbs, Google and McCann are located in
this wealthy suburb. Features good food, high end shopping, a small upscale
town feel (like Pacific Heights). Safe to walk around, good quality parks
nearby, working and functioning government.

I like the motto and energy of Detroit that comes across in the form of
"Detroit Hustles Harder" but I think you gotta address the core issue of
having a city that people can feel safe in. I grew up in a poor neighborhood
of LA and have never felt as unsafe as I feel driving around the large swaths
of Detroit that have been left to rot.

~~~
jff
They call it Motor City because it's where they used to make cars, not because
it's pedestrian-unfriendly.

~~~
calbear81
Yes, but I was making a larger observation about the car-centric culture that
exists here.

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mgkimsal
I blogged [1] about Detroit (I grew up just north of 8 mile for a time)
recently and my solution to the overarching problem of the city was/is: a tax
holiday for residents of Detroit.

The biggest problem Detroit has is declining population of income-producing
people. Yes, there are issues of businesses for people to work at being in the
city, but let's face it, people will drive to work wherever they are, at least
until there's _much_ better public transport there.

Businesses get tax breaks to locate in particular areas - why don't residents?
Michigan could/should introduce a 10 year state tax holiday for residents of
Detroit. If you live in _Detroit_ the city, you pay 0% state income tax (or...
a reduced sliding scale or something like that).

People will move there. People will relocate there. Supporting businesses will
follow - more restaurants to serve local residents - residents who are
earning, not the left-behind/leftover residents of a hollowed out city. Almost
everyone who _can_ get out of Detroit has already.

Efforts of entrepreneurs to turn things around are good and should be
applauded, but the problem is of a bigger scale than most people realize, and
imo should be tackled at a state level via tax incentives (a great social
engineering tool). One rebuttal I got to this is many in surrounding areas
(Royal Oak, Ferndale, Easpointe, etc) would object because they'd be losing
residents to Detroit. It probably would happen some, but the entire area has
lost a lot of population as more people leave the region (and state) than move
in.

As companies try to lure people back - I've heard from more than a few people
that Ford is hiring aggressively - "no state income tax if you live in
Detroit" would be a nice extra incentive.

[1] [http://michaelkimsal.com/blog/solution-to-detroits-
current-p...](http://michaelkimsal.com/blog/solution-to-detroits-current-
problems/)

~~~
elmuchoprez
The median US household income is something like $50k/year. Probably lower in
Michigan, but we'll call it $50k. Michigan has a 4.25% income tax, so
eliminating that would be a savings of $2,125. But you have to pay federal tax
on that. Let's just say you're paying 15%. So now we're talking a savings of
about $1,800. $1,800/year isn't chump change, but it's also not a life
altering amount of money. For me personally, it's nowhere near enough money to
put up with all the negatives that come with Detroit.

~~~
mgkimsal
People that earn more would save more, and would have more incentive to move
there, especially if you can get larger tracts of land to have a bit of
privacy.

Yes there are negatives, but the solutions are going to need to come from
getting larger numbers of working/earning people living there day in and day
out. Adding another casino or ballpark will do pretty much _0_ for Detroit as
a whole - it'll make the few square miles in downtown prettier, but people
will just continue to drive in and out, nothing more.

People jumped through hoops a few years back to 'save' a few thousand for the
'new home buyer tax credit', which basically landed them with a mortgage. And
that was a one time event. A family saving $2k+/year for, say 10 years, would
be, if not life altering, certainly a modest incentive. Individuals making a
decision like this won't be enough - it needs to be large groups who have
enough purchasing power to attract other businesses/jobs to Detroit as a
whole.

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jamespitts
The place is surreal. There is so much infrastructure rotting and even burning
right there in front of your eyes. I grew up in LA and was there during the
riots and it left an impression on me. Cities need to be designed properly or
they become a social catastrophe. Detroit is the case study for us all.

Especially in downtown and in patches, there are things happening that could
bring it back. Dan Gilbert is the perfect person to improve the situation,
he's about as witty-gritty Detroit as it gets. Due to his efforts, there is
some support infra for startups emerging and that will have some effect.
Shopkeepers much more so, IMHO.

But always beware of people with big ideas for your city:
<http://www.youtube.com/watch?v=gKWtQvABBMY>

~~~
rmason
Detroit's urban planners made a lot of big mistakes. When the freeways were
built in the fifties they cut entire neighborhoods in half. When Reneissance
Center was built on the river in the words of one critic they pulled people
off the streets and installed them in a fortress cut off from the rest of
downtown.

But other cities made equally dumb mistakes but they recovered. The riots in
1967 scared people and began the destruction. I went downtown with my
grandfather two weeks later and it looked like a war zone with buildings still
smoldering.

Dan Gilbert is wagering a billion dollars of his fortune to turn things around
and so far imho is doing very well indeed.

[http://www.nytimes.com/2013/04/14/business/dan-gilberts-
ques...](http://www.nytimes.com/2013/04/14/business/dan-gilberts-quest-to-
remake-downtown-detroit.html)

The NYT sees what Gilbert is doing as a philanthropic effort but Detroiter's
see him more as a Billy Beane type.

[http://www.deadlinedetroit.com/articles/4496/the_new_york_ti...](http://www.deadlinedetroit.com/articles/4496/the_new_york_times_dan_gilbert_and_detroit_s_commerce_phobia)

~~~
jamespitts
I read several books about urban planning and cities and it helped me
understand how this happened all over the us. Detroit just got the worst of
it. There are countless examples of horrible planning decisions in D., so many
street-life-killing fortresses and dead voids everywhere.

I do think that the people of D. will overcome these obstacles now that the
core problems are identified.

Do you remember anything about the conditions leading up to the riots?

I remember taking a series of bus rides through central LA in 1990 (2 years
before the riots) and all I could see were thrashed neighborhoods and desolate
stretches. It is a whole different world now, so much more life on the streets
when I go back.

~~~
voltagex_
Hey, any book recommendations? Not for Detroit specifically, but urban
planning is interesting.

~~~
jamespitts
Death and Life of Great American Cities \- the intellectual blueprint of the
great counter-reaction to reductionism and modernism
[http://en.wikipedia.org/wiki/The_Death_and_Life_of_Great_Ame...](http://en.wikipedia.org/wiki/The_Death_and_Life_of_Great_American_Cities)

City of Quartz \- all about the history of LA and its power structures, lots
of great anecdotes about zoning and the nasty history of racial segregation
through real estate <http://en.wikipedia.org/wiki/City_of_quartz>

Suburban Nation

The Modern Urban Landscape

------
rmason
I know Detroit pretty well and while the danger is certainly there, it doesn't
negate the opportunity. The city could also be a great laboratory for a firm
developing tech to minimize the crime danger.

~~~
rvkennedy
Yes, in fact I hear that a company called OCP is running some interesting
experiments in just that area: [http://blog.khanneasuntzu.com/wp-
content/uploads/2012/03/OCP...](http://blog.khanneasuntzu.com/wp-
content/uploads/2012/03/OCP.jpg)

------
zdgman
Also relevant, check out the decline in Detroit at present:

[http://movies.netflix.com/WiMovie/Detropia/70229260?locale=e...](http://movies.netflix.com/WiMovie/Detropia/70229260?locale=en-
US)

Watched this weekend and it is available for streaming. Pretty scary to think
this sort of decline could hit any major city.

Why has this been downvoted?

~~~
subpixel
Smaller cities implode as well. I was just in Newburgh, NY - a once gorgeous,
historic town on the Hudson just 60 miles from Manhattan, now the murder
capital of New York State. Literally. Driving around that town is like
visiting the set of The Wire.

I couldn't help but think of what Newburgh would look like if it was in
France, Germany or England. Probably a tourist attraction. Makes you kinda
depressed at how easily Americans give up on urban areas.

~~~
BrianEatWorld
I used to visit Newburgh a fair amount when I was younger. Do you think by
chance the large number of historical buildings is actually whats creating
part of the problem?

~~~
subpixel
No, I don't think so. I'm not really sure how historic buildings could cause
blight.

I know a big "urban renewal (read: slum-clearing) project in Newburgh
demolished the historic waterfront in the 60s/70s. Then they never built
anything to replace it.

Here's an good overview of the boom/bust:
<http://www.newburghrevealed.org/historymigration.htm>

"One long time resident remarked, "Newburgh was a nice, solid town. Then
everything changed. Just like that""

~~~
BrianEatWorld
Historic buildings can cause blight the way that any building restriction can.
They limit supply and raise costs. Historic buildings in particular, affect
the ability for new business owners to bring in businesses as well as limiting
homeowners.

Another great example of that is Washington DC, which has incredibly strict
building limitations and a large number f protected historical buildings,
which means that despite massive tourism, the city is largely a slum with
millions of workers choosing really long commutes over living in the city.

------
michaelochurch
I've thought for more than a decade that the Midwest would be the "New Place"
for 2005-2025. The coasts seem kind of played-out. The elites here (in NYC and
SF) are already in place and going to try to block any real innovation.
Silicon Valley was built in a time when Northern California was seen as a
backwater-- sure, one with nice weather, but not a place the Northeastern
elites took seriously-- and that was _why_ it was able to generate so much
momentum in the 1950s to '90s.

However, there's the problem of capital, and also one of risk-aversion. It may
be that Michigan (where failure has already happened) is where the next wave
starts. I can't predict such things, but it's interesting to follow the pulse
of it. Does technology really still need high-priced locations? It seems to
think it does, but that may be a venture capital get-big-or-die bias.

One thing that pisses me off is the talent-pays aspect of real estate. Why is
New York expensive? Because companies want to hire here. Why? Because _people
like me live here_. So we are effectively paying because we're awesome. Well,
fuck that. Why am I _paying_ a bunch of people who have nothing to do with
productive activity because of that? If we, as a group, stopped being awesome
then this city (even the country) would be fucking nothing. It's people who
keep cities going.

I could really see a Midwestern city just killing it by throwing a few million
dollars at some really great startup ideas. Bring 100 of the best programmers
in the country together and pay them a market salary to work on whatever the
fuck they want, then wait 5 years, see what they build and get a critical mass
effect.

~~~
zdgman
I like this idea. Now do you propose that a municipality create a startup
accelerator with the requirement for funding being that you are willing to
relocate?

Would be pretty amazing if they through in office space / housing for the
first few years. One would have to believe it would pay off quickly.

~~~
michaelochurch
_Now do you propose that a municipality create a startup accelerator with the
requirement for funding being that you are willing to relocate?_

I think that could work. I'd focus on long-term projects and an "autonomy
fund": $100,000 per year to 100 top-notch engineers. The city gets a non-
voting 37.5% stake (implied valuation of $266.67k per year) in whatever you
build, and you have to have at least half of your employees working there at
least 45 days per year, or maintaining a residence (tax base).

~~~
fudged71
This is a very neat idea.

