Has anyone read Jane Jacob’s The Life and Death of Great American Cities? I know there are many who have issues with Jacobs’ methods and conclusions (some of which have actually led to the kind of gentrification she opposed), but whenever I see stories like this about Detroit, I can’t help but be reminded of some of her theories about urban renewal.
First, there’s her argument that it’s usually longtime residents who themselves gradually rebuild and revitalize areas that have been long neglected by the state and private financing. But neighborhoods bootstrapping their way up in this manner usually don’t making tons of money for guys in suits (slum lords or financiers)—they’re just becoming nice, affordable places where working class people can live and work and support each other.
So these places are already recovering by the time outside investors and developers come in because, let’s face it, rich people aren’t going to spend millions on a totally hopeless situation. The small business owners described in the link above are people who have stuck it out and have helped provide stability and investment to their communities.
But I wouldn’t be surprised to find that many of the black business-owners interviewed have had an impossible time getting mortgages or loans, even though they’ve demonstrated they have the grit, desire, and ability to succeed no matter the obstacles. Why wouldn’t you invest in such people? Yet
Many, particularly those who have kept their businesses going on shoestring budgets, feel excluded from conversations about Detroit’s revival and overlooked when it comes to getting access to funds and resources.
The reason why huge amounts of money are suddenly pouring into Detroit after decades of private sector neglect is that rich, white people have figured out they can make money from the city. And those people are not interested in providing small mortgages at affordable terms to small, black-owned businesses or to long-term homeowners:
"I think, for the most part, black-owned businesses are not getting a piece of the pie," bookstore owner Janet Jones told The Huffington Post. "What about people who have been doing the hard work of living and working and having business in Detroit for the last 20 years?"
Outside investors aren’t interested in making sure people like Jones succeed since they can’t make a lot of money from her success. They are interested in the huge profits that can only be made from huge redevelopment projects.
Here’s what Jacobs had to say about “cataclysmic money”, which she characterizes as “money [that] pours into an area in concentrated form, producing drastic changes” that tend to sweep away the local diversity:
All three kinds of cataclysmic money have been involved…as they often are in city decay. First the withdrawal of all conventional money [e.g. mortgage redlining]; then ruination financed by shadow-world money [e.g. criminal and borderline-criminal money]; then selection of the area…for cataclysmic use of government money to finance renewal clearance. This last stage makes possible cataclysmic re-entry of conventional money for financing renewal-project construction and rehabilitation. So well do these three different kinds of money prepare the way for each others’ cataclysms that one would be impelled to admire the process…were it not so destructive…
She characterizes the cataclysmic money that poured into East Harlem back in the ’40s and ’50s as a form of internal ‘foreign aid’, which makes a sick sort of sense given how the area had already been cut off from normal methods of investment and growth:
For it was as if East Harlem…had been decreed a backward and deprived country, financially apart from our normal national life. Even the branch banks were closed down throughout an area of more than 100,000 people and thousands of businesses…
Eventually, much as the generosity of a rich nation might well extend massive aid to a deprived and backward country, into this district poured massive “foreign” aid, according to decisions by absentee experts from the remote continent inhabited by housers and planners. The aid poured in for rehousing…More than 1,3000 businesses which had the misfortune to occupy sites marked for housing were wiped away, and an estimated four-fifths of their proprietors ruined…Virtually all of the unslummed population which had hung on was rooted out and dispersed to “better itself.”
According to Jacobs, cataclysmic money is, at best, not helpful to up-and-coming neighborhoods, and, at worse, helps destroy any progress locals have made in these places. What such neighborhoods need is “gradual money” or the typical sort of investments in the form of smaller mortgages and loans that people who live pretty much anywhere else enjoy. Such investments help maintain the diversity as well as the economic vitality of urban neighborhoods and contribute to the gradual, steady growth of cities.
It’s deeply frustrating that people like Janet Jones aren’t getting a shot at the redevelopment money that’s pouring into Detroit right now. It’s not just inherently fairer, but it makes economic sense to prop up established entrepreneurs like her as well as up-and-coming locals because those are the people who are going to stick around even after the flood of government and private money eventually dries up (and after the white people run out again for whatever reason). They represent the local energy that can rebuild Detroit from the bottom up and ultimately ensure long-term stability rather than short-term profiteering and equitable growth rather than the enrichment of one small class of people.
BTW, I’m clearly not an expert in this stuff, just interested. I would suggest you check out Ta-Nehisi Coates if you want beautifully written, well-researched discussions about unjust U.S. urban housing and economic policies and their devastating effects on the black middle and working class.