Detroit Mayor: “This is our history, and it’s something we still have to overcome.” [TRANSCRIPT, VIDEO]

Detroit’s history of racial segregation is evident today as economic segregation between the city’s thriving and struggling neighborhoods, says Mayor Mike Duggan, who pledged his administration will continue to fight those dynamics.

Speaking at the Mackinac Policy Conference on Wednesday, Duggan gave the crowd a lesson in redlining, institutional racism, housing patterns and other dynamics that continue to hamper economic and neighborhood development.

“The way Detroit looks today is directly rooted in planning decisions that the leaders of this community made in the 1940s and the 1950s,” Duggan told the crowd. “I’m going to show you unfortunately many of those decisions were rooted in racial discrimination. And when you see the facts you understand what I’m talking about.”

In his nearly hour-long speech (full transcript below), Duggan told the crowd how the federal government prohibited lending to African Americans to buy homes in the mid-20^th century, how “urban renewal” in areas like Lafayette Park meant clearing out poor people and African-American business owners, and that those and other injustices continue to affect the city.

“These experiences are very much in the conscience of Detroiters passed down from generation to generation. In many cases we have folks who still remember them,” Duggan said. “So we said, ‘Here’s our new thing: What if Detroit had pulled together and said then one Detroit for all of us? We’re going to create space for everybody. How different would Detroit’s history be?’ That’s the question we’re asking.”

Sandra’s Note: A conference attendee reported to me that a man sitting next to her in the auditorium was “visibly uncomfortable” during parts of the speech and then at Duggan’s conclusion shook his head and said, “I didn’t know any of that.”

Here’s the transcript of what Duggan said:

Note: WDET has asked the city for the slides Duggan presented. He refers to them several times here, and readers may not get a full understanding of his presentation without seeing the visuals that accompanied the mayor’s speech.

We are evolving as an administration from the first few years — which was get the street lights on, get the grass cut in the parks, get the police to show up, get the buses to run —  to now, what kind of a city do we want to be? And is there a vision?

And so our progress has been well documented, and you might see all these projects and things. Are these a bunch of individual transactions or is there a coherent vision that’s driving this? And I want to talk to you today about that vision.

But in order to do that we’ve got to go back into our history because the way Detroit looks today is directly rooted in planning decisions that the leaders of this community made in the 1940s and the 1950s. That was the last period of growth in Detroit. And those decisions reverberate today and as I’m going to show you unfortunately many of those decisions were rooted in racial discrimination. And when you see the facts you understand what I’m talking about.

So as we try to decide what we’re doing today we’re in the first period of growth. In 50 or 60 years: people moving back. We have a chance to plan growth for the first time in half a century. And so every day we get up and say, ‘What’s the vision that’s going to drive us?’ And we have one single guiding principle.

For those of you who live or work in the city, those of you who are thinking about living or working in the city, you should know what the future looks like. And our principle is this: it’s ‘One City. For All Of Us.’ That defines our planning strategy. And so we’re pursuing an urban redevelopment strategy that hasn’t been tried before in the country. And I’m going to show you why we’re doing it.

But first we have to go back in time because urban redevelopment in America has historically across the country been about removing the poor. It was conceived as slum clearance. And this picture happens to be from Boston it was all across America. It was poor people get moved out.

And in Detroit you have to go back to what happened before World War II. We were the ‘Arsenal of Democracy.’ We like to brag about that. But in the late 1930s, the country was in a depression. Detroit started to ramp up. When Roosevelt did the Lend-Lease for Europe, even before we got into World War II, and people started moving here from the south in even bigger numbers.

In 1940. The president General Motors William Knutson left the company for a greater calling. He became the head of America’s wartime effort right out of Detroit. Two hundred thousand Southerners migrated to Detroit for World War II war production. A lot of African-Americans from the South, a whole lot of Caucasians from Kentucky and Tennessee. White and black came and moved into this city at the same time. You had at one point 700,000 people working in the plants here.

You know what happened. They rapidly expanded the Packard Plant, added plant after plant. The engines in the PT boats, the engines in the B-29 bombers were made in Detroit at the Packard Plant. It was rapidly expanded for purposes of the war. Housing had to get built quickly, and from 1925 to 1945 200,000 homes were built in Detroit. They built them all the way to the city border. Single family homes, couldn’t put them up fast enough. No thought to long-term planning. We were trying to win a war.

And we were trying to create housing, and so this is an interesting picture that was put out at the time from a group they’re trying to deal with the housing problems in Detroit. And each family here represents 10,000 people, and what this shows is between 30 and 40 more people were pouring into Detroit than the expansion of the houses. But once the war effort started, as a whole from 1940 to 1942 you had three times as many people moving in as the housing (was being added).

But of course it was an equal. The Caucasians coming from the south could live anywhere in the city but the African Americans were confined to these neighborhoods.

And as people poured in, the crowding became enormous in the African-American communities. They were going to work every day in the same plant but living in very different neighborhoods. And in June of 1943 — people forget this, people remember 1967 but in June of 1943 — we had racial violence in this city over the housing issue in the middle of World War II: 34 people killed, 433 injured. This happened then, when the country should have been pulling together.

And so you say, ‘Well how did that happen? What’s the problem?’ And this is the thing that makes you so angry. Much of the problem we had was the direct result of the federal government. Franklin Roosevelt created the Federal Housing Administration because you couldn’t get mortgages to buy a house. And so we’re going to create an entity that’s going to guarantee mortgages for lower-income or middle-income people. So the FHA sets the standards nationally for home construction. They guarantee you the mortgages for the banks so they could increase homeownership. But from the beginning when the FHA adopted this, they established principles that said mortgages are moving away from minority neighborhoods, 1934.

And so the term “redlining.” Who here knows where redlining comes from? Now you hear all the time, I’m going to show you. It comes from the FHA. These were the FHA mortgage guidelines. You had Green Zones. A Green Zone was a new homogeneous area with American business a professional map that was best risk. Then you had Blue Zones. They’re still desirable. You had yellow zones that were declining typically bordering on mixed neighborhoods, and you had red zones that were declining, and by and large had minority population. And so the term redlining: this is a map from the federal government of the city of Detroit in 1939. And in the red areas, if you made a mortgage, the federal government would not guarantee it. And so you want to say today, ‘How did all these areas deteriorate. How did this housing go?’ The truth of the matter is the roots of the deteriorating housing was here you could not get a loan to fix up your home in those red areas in the 1930s.

It wasn’t like this map was a fluke. These are the underwriting manuals, the actual manual the FHA put out to every bank and mortgage company in America, 1946. Here’s your guidance: “Incompatible racial groups should not be permitted to live in the same communities.” Properties shall continue to be occupied by the same social and racial class as they wouldn’t fund integration, and appraisers in assessing the appraisal are instructed to predict the probability of the location being invaded by incompatible racial and social groups.

So if you were adjacent to a minority area, your appraisal got downgraded. So of course how did it match up? Not surprising where the African-American population was concentrated was redlining. One of the most extreme cases up there in 8 Mile and Wyoming because by the 1940s they were out to 8 Mile the last of the farmland in the city of Detroit. And you had a developer who said, ‘There’s a mixed neighborhood, a racially mixed neighborhood that’s built out here.’ It was the pride of a number of the African-American communities, and the developer wanted to build right next door. And they went to the federal government and the FHA said, ‘We won’t make the loan because you’re adjacent to a mixed neighborhood. There is no racial homogeny.’ The developer was is dead. The developer said, ‘I got an idea.’ So the developer came back and said, ‘I’ll build a wall, OK?’ And they said, ‘Here’s what we’ll do. Here’s the existing African-American neighborhood. We’ll build this wall and the wall doesn’t have to be so high it has barbed wire but we won’t make loans to black people on this side of the wall,’ and the FHA said, ‘Great!’ and they approved the project, and they built the wall. This is 8 Mile and Birwood. They built this wall with the black families lived here, built the new subdivision there.

You can see the children in the old neighborhood up against the wall. This is what our federal government did. That wall still exists today. You can go see it. It’s a half mile wide. Now the children of Detroit have since painted it with images of civil rights but that wall still exists in the city of Detroit today.

These experiences are very much in the conscience of Detroiters passed down from generation to generation. In many cases we have folks who still remember them.

In 1945, you had a (Detroit) Free Press press operator, a fellow by the name of Orsel McGee. And he wanted to buy a house over here, outside of the boundaries, and most of these neighborhoods were protected by deeds with restrictive covenants that said, ‘An African-American cannot buy in this neighborhood.’ He sued. Thurgood Marshall took the case to the U.S. Supreme Court. There was a companion case the lawyers will remember, Shelly versus Kramer. And in 1948 the U.S. Supreme Court. Struck down restrictive covenants in this country. That historic marker still sits in front of the McGhees’ house. That’s the McGhee family there. For African-Americans to move into these neighborhoods, they had to go all the way to the U.S. Supreme Court.

This is what’s in our city’s history. And so as soon as World War II ended,  it seemed like America forgot Detroit the new generation of plants were all built on one level of the old plants were built on five or six levels. The car would go down the assembly line the sixth floor come down a freight elevator to the fifth floor. But the next generation they wanted to spread out all on one floor. Well, of course the planners in Detroit in their haste to go to houses hadn’t left any room for that. And so the old plants closed one at a time. The plant that built those PT boats and B-2s was forgotten. No effort made to save the old plants. A new shopping mall that was Northland. People wanted to be in an area with all this parking. There was no room left in Detroit. ‘That’s OK. We’ll go out to the suburbs’ and the U.S. government accelerated this.

I mean nearly half of all suburban homes in the 50s and 60s had FHA-guaranteed mortgages. The suburbs were built with federal government guarantee. And here’s the interesting thing is that the National Commission of Fair Housing saw 98 percent of all of the FHA-backed mortgages went to Caucasian homebuyers through 1962.

So you want to say, ‘How did all those homes in Detroit deteriorate over the years?’ There was a conscious federal policy that discarded what was left behind in subsidized the move to the suburbs. And so as the black population grew, even once you won the case in Shelley vs Kramer, you struck down restrictive covenants, and the population grew in Detroit. By 1970 half of the population Detroit was African-American, and look how segregated the city still was.

This is our history, and it’s something we still have to overcome.

So in the 1950s Detroit’s facing a critical shortage – housing, we need to do something with the old factories. What’s the urban renewal strategy? We elected a mayor, Albert Cobo, for whom Cobo Hall is named who chose a campaign of racial divisiveness. He ran the kind of “Us versus Them” campaign that is Detroit’s done so much damage. Here was his main promise: that we’re going to acquire the land in these backward sections remove the buildings and sell the properties back to private developers with the city build end to end, he was going to take the land and the backward section and give it to private developers.

What we’re the backwards sections?  The two most intensely populated African-American neighborhoods in the city of Detroit. Paradise Valley which basically ran along where 375 and 75 are now up to Grand Boulevard. And Black Bottom south of Gratiot, where Lafayette Park is today. Took those areas and said, ‘We’re going to turn those over to private developers’ at a time people needed a place to go. There were 400 businesses in Paradise Valley, nearly all African-American owned. And look this was Paradise Valley before the announcement.

And here’s how it looked after they built 375 and wiped out 400 businesses and went into Black Bottom where 7,000 families were put out of their homes. And it looked like that when they started and it looked like that afterwards. And here’s the tragic thing: more than 90 percent of the residents of Black Bottom were tenants. They were renters because, of course, they couldn’t get mortgages. They were redlined. As tenants they didn’t get any break. They didn’t get bought out. The owners of the property got bought out. Many times the owners of the property were not African-American but the 7,000 families were left to go wherever they want and just displaced. Many of them migrated over to an African-American area over on 12^th  Street where violence erupted not too long afterwards.

And so Lafayette Park got rebuilt. And the former residents couldn’t afford to be there. This is our history.

So when Dr. Martin Luther King gave his first ‘I Have a Dream’ speech. It was in Detroit at Cobo in 1963 and fair housing was a big part of it because we were at a crossroads in the 50s and 60s. People were starting to move out. We were at a time we needed to act. And you have to look back, and you say, ‘OK I’ve heard the stories for years. Detroit’s decline. The violence in 1967. Mayor Coleman Young. That’s what drove everybody out.’

Wayne State issued this report. ‘If current trends continue, Detroit will lose 25 percent of our population by the end of the decade.’ You know when they issued that report? March 1963. The seeds of Detroit’s decline were rooted in the decisions of the 40s and 50s. And Wayne State recognized that in 1963.

But today, that’s not kind of the common wisdom. So we said, ‘Here’s our new thing: What if Detroit had pulled together and said then one Detroit for all of us? We’re going to create space for everybody. How different would Detroit’s history be?’ That’s the question we’re asking. And so now we’re at another historic point. For the first time in 50 years the population (loss) is slowing, and I believe is starting to grow. These are the monthly reports that … DTE sends me on residential utility hookups. The census data is a year old. This is a month old, and you can see we’re seeing growth. Now we have an opportunity to plan for that growth. How are we going to build this city for the next 40 or 50 years? And if we fail again I don’t know if the city can come back. And so, you say, ‘Well OK. How does that really relate to Detroit today? You look around the country and you look at Brooklyn where nobody 10 years ago could have imagined this. But minorities are being pushed out of Brooklyn in huge numbers with the rapid development. Go over to Washington D.C. and see what happened. This is the development that’ going on there. The blue is the African-American concentration of population in Washington D.C. 20 years ago and here’s how it is today.

Look at the number of minorities that have been pushed out by a lack of planning as growth was coming. And so what we are trying to do is say this: can’t happen here, right? Well we watched this. In 2013 I got a chance to have lunch with a group of seniors. A week later they had an eviction notice, 127 low-income seniors in downtown Detroit, been in their apartments for 20 years, all got evicted. Why? Because the federal tax credits for low-income housing — and this is the way low-income housing works in this country, it’s one of the few things Republicans and Democrats agree on — rather than building huge public housing projects, the federal government will say, ‘I’ll subsidize you the difference between what you could get at the market and what your lower-income residents can afford.’ So if they can afford $600 a month and your market is $900 a month, we’ll subsidize $300 a month in tax credits over 30 years.

This building, nobody did anything illegal. 30-year tax credits ran out. Owner sold the building. Somebody else bought it. Good day. Market rate housing. You guys are out.

As if the 127 families who didn’t have any legal right to stay. The assumption was they didn’t have any moral right to stay and so they got pushed out. And when you look beyond that and see when they went and visited their former place which now looks like that. After they’d been there 20 years, you can imagine the feeling, and the feeling there, was it a fluke? We have 2,200 more units that are going to run out and their federal subsidies between now and 2019. Which means what you saw there could happen 2,200 more times.

This is a very real concern. And so for people who have grown up in the city and know there’s a history of the poor are being pushed out when the market provides that opportunity, do we have an obligation as government to step in and do something about it? That’s the question we’re asking.

And the questioning goes even deeper and more culturally. And so a fellow by name Aaron Foley wrote this column a couple of years ago because Crain’s had awarded some young people, entrepreneurs of the year, a couple of times and each time they said, ‘It’s great coming to Detroit. It’s a blank canvas.’

Detroiters listening to that said, ‘blank canvass? There’s 700,000 of us living here. Hey we’ve got rich histories here. We’ve accomplished a lot here.’ And so Aaron wrote this column saying, ‘We’re not a blank canvass.’ And he got so carried away he wrote a book. So it’s called “How to Live in Detroit Without Being a Jackass.” And he wrote an entire book to say, ‘You’re welcome in our city but you have to be respectful of those who have been here.’ And a month ago, he appealed to me. I hired Aaron. And he’s now writing the stories for the city of Detroit of the comeback in the neighborhoods. He’s got the kind of edge that I want, so I said ‘OK.’

I went and hired two nationally prominent people Maurice Cox, Arthur Jemison. I said, ‘I want a clear vision for urban redevelopment that has not been seen in this country. I want to use a Detroit vision that says we’re going to honor the people who have been here. Can we redevelop our city without wiping out our neighborhoods?’

And here are the eight principles that if you are thinking about moving or investing in Detroit, this is what governs our decisions:

One: Everybody is welcome in our city. Detroit’s a welcoming city. At our core, that’s what we believe.

Second: We’re not going to support development if Detroiters are moved out so other people can move into their homes. We’re not going to do it. Radical. But seems fair, doesn’t it? OK.

We’re going to fight economic segregation. We’re not going to have one area the city for the rich and one area of the city for the poor. If you want to live in Detroit, people of all incomes should be mixed into all neighborhoods.

Blight removal’s critical but we’re going to save every single house that we can.

We want to build neighborhoods of density where our daily needs can be met within walking distance of your home.

Those who stay are going to have a voice in what happens in their neighborhood. It won’t just be the government.

We’re going to move jobs and businesses close to the neighbors as possible.

And the Detroit River belongs to everyone. Those are the eight principles.

(Applause)

So let me show you. How this is going. First Principle I have great partners on Detroit City Council. And one thing we agree on. We’re pro immigration. We support people who moved out of Detroit moving back. We’re trying to keep our young talent stay in the city. We invite people from other countries. City council and I have been completely united on something that is not true in every city: We believe deeply this city is going to be welcome to everybody.

(Applause)

Second. We’re not going to move out Detroiters so other people can move in. You say ‘Well how can you stop that?’ One: No tax breaks for any development that displaces residents or reduces the number of affordable units. The interesting thing is in Detroit if you come by a market rate building and somebody buys it and somebody sells it, the government can’t legally do anything about it. But if you buy a building with low-income housing and you want to make it market rate, today the finances don’t work if you don’t get tax credits. So the city council and I have said, ‘We’re not giving you tax credits, tax breaks for that.’

Second, we’re going to go after every single one of those 2,200 HUD-supported units, and I’m going to sit down and Arthur Jemison is going to sit down with every single building owner. And we’re going to preserve every single one of them. Sounds hard, but we’re doing it, and then we’re going to establish a housing trust fund to support those owners who stay with us.

And you say, ‘OK is that really going to work?’ Well. A couple of months ago, 165 units on Washington, the Stevens Building and the Industrial Building. Tax credits were expiring. Building owner was looking to sell, 165 folks were going to be out on the street including some of the people that got bumped out of 1214 Griswold. But we sat down with the Roxbury Group, worked out a deal, they bought the building, we gave them some support, and they guaranteed 30 years of affordable housing.

We can do this and we can keep people downtown.

We reach an agreement with across in East Jefferson, 161 affordable units were going to expire and we aren’t just preserving them. This is the kind of quality that we’re building because affordable units typically are people making under $30,000 or under $40,000 a year. And we’re doing this in all areas of the city I know Dennis Archer is sitting there, and he recognizes it because it’s right down the street from the Manoogian. We are building these kinds of residences and preserving them in all parts of the city.

And so now we’ve already got agreements in place on all those red squares, 1,200 units each case, renovating kitchens, renovating bathrooms, renovating the facades with developers who have agreed to preserve them.

This can be done if the city values it. And so we are proving to people you don’t have to move to Detroiters out. These developers are making money keeping people here.

Third principle: We’re going to fight economic segregation. It would be so easy in this city to have one area of the city be all wealthy people and another area be all poor people. And you have to work really hard at it every single day, and if you think about the fact that in the middle of this climate, in the middle of people being thrown out on Griswold, in the middle of the sense that things were changing. The voters of Detroit elected me as the mayor. The African-American community voted for me, and I can’t tell you what an enormous responsibility that feels like because people believed that I would deal with this fairly and this is probably something that I care more about. Here’s what we adopted. City council and the mayor together that if we give financing to any housing development a neighborhood, a minimum of 20 percent of the units have to be guaranteed as affordable. And so that means at 80 percent those earning under $40,000, 60 percent those earning under $30,000. 20 percent of the units are going to be set aside for people who are verified to make that income. Now this sounds like some liberal thing, can’t possibly work, right? I’m not really much in – Yes I hear some Republicans out there laughing – But I’m not much into ideas that don’t work. So let me show you what happened. So the Strathmore — a building I know well. When I was the Wayne County Prosecutor I seized it from the dope dealers that were dealing out in front of it, and you can see it’s two blocks down the street from the Detroit Medical Center. It’s what it looked like when I took office. And here’s how it looks today in the heart of Midtown. 40 percent of the units set aside (for low-income residents)

Richard Baron, major developer, Orleans Landing — the first new housing built on the river in years. You can’t have affordable housing on the riverfront, 20 percent of these units are set aside as affordable. People of all incomes can work and live on the waterfront.

Duchamp Place in Lafayette Park just open now: 20 percent affordable units.

And on Friday the Ilitches and their partners announced Detroit’s largest housing development 20 years. If you didn’t see this: four historic buildings renovated. We believe in saving the buildings. We’ve got two new apartment buildings 686 units total. $160 million investment. The hottest area in Detroit, 20 percent of all the units will be set aside as affordable in the heart of Detroit’s hottest develop.

The fact is the people who drive your buses, the people who answer your phones, are those people who are working in your businesses should be able to live in the same neighborhood as the hockey players and the executives and the like.

We all work together. We should all live together.

(Applause)

So this is the old version. These are the old Douglas towers. You had 900 people concentrated in six towers in one place. So how does this working? Those towers came down three years ago. But here’s what we’ve done: I’ve got 20 separate projects across the Downtown-Midtown area, 20 separate projects with 1,000 guaranteed affordable units. Instead of being stuck over here in six towers with a pool in one place and everybody else somewhere else, we have spread the affordable housing throughout greater Downtown and Midtown because this is what we believe as a city.

(Applause)

And so if you want to be in an area where people of all incomes people of all jobs, people of all backgrounds live together, Detroit is the place to go. If you’d want to be in a different neighborhood, there are lots of choices in southeastern Michigan. And so we’re trying to create an option for people who want to live in this manner.

Blight removal is critical. But we have to save every house we can. We’ve got a lot of beautiful houses that we lost in the mortgage crisis in 2008 and 2009. So I showed you some of these pictures before. You know what we’re doing, right? We sue the owners who abandoned their houses. We get an agreement from them to fix them up or we take title and sell the houses on the Internet. And we only demolish those that can’t be saved.

And now we’re adding another piece, which is we’re going to board up every house we’re not going to be able to get to in the next year or two to secure all that. And so we go out we file these lawsuits, the entire neighborhood at once. We want people to fix up their homes. We don’t really want to sue them but if you walked away from your house we’re not going to tolerate it. And so how has it worked?

Well we set up the Web site BuildingDetroit.org. We auction three houses every single day. When it started out, people thought it was a gimmick. It’s now three years. So how does it go? Let me show you the last couple of days. This is Friday’s auction. We sold this house on Navy for $26,000. We sold this house on Hague for $22,000 and this house for Lyndhurst for $1,000. We’ve got houses going at all price ranges for all types of people. That was Friday. Thursday one house sold for $16,000, one house sold for $12,000, one house sold for $3,000.

These are houses have been vacant for three or four years. People are moving in and fixing them up.

May 17th was a really good day. This house on Lahser sold for $28,000. This house on Grandville sold for $7,600. And this house in Boston Edison — that’s not a typo — it’s sold for $240,000. A vacant house in the city’s inventory because the rest of Boston Edison is coming back so fast, there is value in these homes. The original idea that you have to rule through the city and knock everything down, it’s not true. Property values are coming up, and people are moving back in. So this is what we’ve done in three years: 3,000 houses that were vacant three years ago are occupied today either rehabbed by the owner or sold by us. Look at that: 3,000 houses have somebody living in them.

(Applause)

And so you want to see some pictures. And this is always my favorite. So this is Quincy when we sued on it. And that’s Quincy today. Yorkshire when we filed a lawsuit and the same house today. This is what we’re doing, 3,000 times. People thought Detroit had no future.

Look at that one.

Can you believe people walked away from these houses? In the Fitzgerald neighborhood which I’m going to talk about in a minute, here’s how it looks today. When you take out the burned out houses on the block, people will buy the other house. But of course it does mean taking out the burned out houses, and we’re knocking them down at a rate of 4,000 a year, four times faster than any other major U.S. city. In fact the state of Ohio is in second place. They take down a thousand a year. And so we have all the money we need for the next two years to take down the houses because of federal funding effort that Debbie Stabenow helped lead, and Debbie you’ll be really glad to know that the federal audit report came out in April. So for the last half of last year Detroit had the lowest cost per house demolition of any major city in America. So we’re learning. So Debbie was defending me when our prices were a little higher, but we’ve gained a great deal of experience. We’re now the fastest and the cheapest.

But even at 4,000 or 5,000 a year, we still have a lot of work to do. Twelve thousand houses in the last three years. It’s staggering what we’ve done and here’s what happens: it isn’t just a knock down. So this was a street on Marygrove. Every one of these houses was beyond saving. We cleared them all out. And you say well what did you do that? Well we just had a house sell in Marygrove in a private sale for $110,000. Three years ago, that neighborhood you couldn’t give the house away. And now the market is starting to work. So we have 40,000 houses. When I started in May and here’s what we’ve done 15,000 are resolved, 25,000 to go.

And the magnitude, let’s think about this: the city of Dearborn has 30,000 houses total. Imagine if every house in Dearborn was abandoned and vacant, that still wouldn’t tell you the magnitude of what we are dealing with. But of the 15,000 we took down 12,000 were demolished, 3,000 got reoccupied. We’ve got 25,000 left. We can’t get to them fast enough. I can’t say to people wait another five years. And so in August we’re launching board-up brigades. We’re going to go into the neighborhoods we’re not going to get to for a year or so in demolition. And we are going to go through and board up every single house.

So our plan over the next two years is we’re going to rehab another 5,000. We’re going to demolish another 9,000 and we’re going to board up the remaining 11,000 so that two years from now every single vacant house in Detroit is secure one way or another.

Principle Five: We got to build neighborhoods of density if you want to live in a neighborhood with 2,500-square-foot colonials and cul de sacs, you’ve got lots of good choices in the suburbs. And I lived in the suburbs – it’s a different life. You need a gallon of milk you get in your car you drive up to the strip mall. You want a cup of coffee you get in your car you drive up to a Starbucks. It is a different lifestyle. We’re not going to compete with the suburbs building duplicate subdivisions. But what if we built neighborhoods where there was so much density that your daily needs could be met within walking distance of your home?

And Dave Blaszkiewicz and the Strategic Neighborhood Fund, with the help of JP Morgan Chase and a whole lot of foundations signed up for this. They said, ‘Let’s pick some neighborhoods where we renovate and occupy every salvageable house that we invest in other houses to add to the density that we build streetscape improvements to create the walkable community and then we get businesses to fill them in. Can we build walkable neighborhoods that will be a different experience than you could get in a suburb?’ So we targeted these three neighborhoods. Many of the foundations lined up $30 million in investment. And we started in the Fitzgerald neighborhood and if you haven’t been following this it’s going to be fascinating to see. So here’s Marygrove College over on McNichols. Here’s UD-Mercy. Here’s the Fitzgerald neighborhood in between. In this neighborhood. You’ve got 600 families still living in houses 100 vacant houses in good shape and 300 vacant lots. We said, “Let’s go build a neighborhood of density because we got Marygrove well over here we’ve got a great Ba

And so here’s what we’ve done. We said in the first phase we’re going to take all 150 houses and rehabilitate, and we’ve got a contractor who’s doing it. We’re going to demolish the 16 we can’t save. The city owns all the vacant lots. We’re going clear them and actually create a park right in the middle of the area. We are able to do this with $4 million of subsidy: $2.5 million from HUD and $1.5 million from private philanthropy. And then the second phase we’re going to develop the commercial strip on Livernois and McNichols and the streetscape. So what does this look like? Could we actually do this?

It’s happening now. This is the neighborhood. The houses depicted in white are occupied. The houses depicted in blue are going to be renovated. This is the Central Park that’s going to be built into the center of the neighborhood. And this is the walkway. It’s going to run through the neighborhood. We’re taking our vacant lots and turning them into things of beauty, either gardens or flowers and the like. And then we’ve got the funding already from the extra money you’re paying in gas taxes and license fees and McNichols is going to be improved and look like that. And so we’ll build the streetscapes. All right.

(Applause)

West Village over near Belle Isle, same kind of thing. So you’ve got a number of housing projects going. This is the second area. This is the way Agnes looked just a couple of years ago. This is the commercial corridor today. This isn’t a model. This is what’s happened. We’ve built a walkable neighborhood with the help of a number of the foundations — Kresge and the like — new housing being built to add density into the area, and we are finding that people are moving in.

So we’re going to start with those first three but now we’re to expand into seven others. And so when people come to us and say, ‘I want to invest in the city,’ we’re prepared to say, ‘We have a place where you can come.’ And this was one of the meetings that Fitzgerald we had 40 separate meetings because we’re saying to people, ‘If you stayed, you should have a voice in the way your neighborhoods are built.’ And everything you saw in the Fitzgerald design came out of the 40 meetings with the neighbors who said, ‘I want a park in the middle. I want a bike walkway through my neighborhood.’ And we are going through neighborhood after neighborhood. It is a very different kind of plan.

The people who stayed plan their future.

And we’re giving them control of their immediate surroundings so I’ve said to them, ‘If you ever take care of a lot next door, you want to buy a lot next door. You could buy it for a hundred bucks.’ In the four years before I got here, 200 people bought the side lot next to their house. These are folks from the sidelight fairs. They all want to get their picture taken with their deed because they walk in with 100 bucks. They walk out with the deed an hour later

And here’s what they do with the properties: They can enlarge their properties. They’ve been cutting the grass in the house for years and they’ve put in gardens. This fellow turned it into a neighborhood park with the barbecue. People are taking control of their own neighborhood, 7,000 people have bought sidelights in the last three years. Those who stayed.

(Applause)

And then we’re going to bring the jobs as close to the people as we can.

The governor has been a great partner on this on every step of the way and this is Shahid Khan, Flex-N-Gate, the front ends over there. But so Shahid is building that. Their plant is under construction on I-94 on the east side. Next to that the Moroun’s Linked plant is already working, 150 people. Down here is Sakthi. They make parts for Ford cars with 500 people. The old Southwestern High School, the lightweight metal Institute over in Corktown. You’ve got … operations employing a thousand people makes Ford parts out at Southfield, and GA just announced their global headquarters of 1,600 people. But they’re going to be basing it right there but you can see what we’re doing. We’re attracting people closer to the neighborhoods where people live.

And then Motor City match $500,000 in every single quarter. We get 300 to 400 people compete. For the 10 folks who managed to win every quarter, $3.4 million in grants have leveraged $20 million in new investment. This is philanthropy that has funded these things, 78 percent have been minority-owned businesses, and when you couple that with what Dan Gilbert has done in very aggressively recruiting African-American owned tenants for his buildings and you look at what Kellogg and JPMorgan Chase have done with a $6.5 million Entrepreneurs of Color Fund.

You look at these other 17 businesses that have already opened, and then these are the 20 more are under construction and these are the 56 in the planning process. And look how many of them match up into our planning zones so you can see what we’re doing: we’re trying to drive the business, we give them extra points if they go into the zones of density where we’re creating walkable neighborhoods. We’re actually thinking this stuff all through. Right?

How about that? Government strategy.

Last principle something Detroit took 300 years to learn. The riverfront belongs to everybody. So we all know Detroit started off on the riverfront as an industrial site. That’s the way it looked 10 years ago. Because of the efforts of everybody connected with the Detroit Riverfront Conservancy, here’s how it looks today. We’re starting to reclaim it. And that’s the foot of Belle Isle. And Governor Snyder was critical in helping us with that.

This is kind of interesting because when I got here there was a plan to build two new waterfront developments that came out almost to the river, and they were in place 10 years ago. They fell through  because the economy in 2008 and these buildings would have come out here. So the wealthy can come all the way out here and have a great view of the water. Our planning department said, ‘No. We’re not doing that. We’re going to hold that back and save that for the public. ‘

And on the new plans that have just been adopted the development is pushed back. Now here’s the interesting thing. When you do that and you have development here, development here, development here and you can layer it back to Jefferson higher and higher by creating less space for the public, there’s actually more demand for developers to build up in a tiered fashion. We think it’s going to be even better and we’re going to connect the river for all the way to Belle Isle and then we’re going to conduct bikeways to the north so that the riverfront becomes accessible to kids in neighborhoods who can get there through protected bikeways.

So the riverfront is open to everybody. You can see what we’re trying to do.

And so there is going to be a lot of conversation in Detroit about equity and inclusiveness and I want you to understand: this is something we believe deeply in. But everything I’ve shown you there, business people are making money. And here’s the most interesting thing of all. Property values: here are the home sales prices last year versus the first year I started so over three years, the dark grey, the home sale prices have grown more than 50 percent in the last three years. Look how much of the city: the home sale prices are up more than 50 percent.

If you listen to the media you would think everything is in Downtown and Midtown, and nothing’s happening in the neighborhood but the neighborhoods they know that the great majority of neighborhoods have seen home improvements of more than 50 percent of the property values. What we’re doing is working.

We got a ways to go I got to get rid of that red area over there in East English Village. I’m on it. I hear from those neighbors all the time. And we’ll get there. And last week we had a house in East English Village sell for $200,000. So next year I’m going to stand here and hopefully that’s going to be better. So, one last thought when you think about how far we’ve come:

Last year SEMCOG showed something you hadn’t seen very often: 1,000 new homes in Detroit, double the next highest city. But think about this: With the announcement the Ilitches made – one project in a six-block area, 686 units, that one project would be bigger than any other city in Michigan, at least in southeastern Michigan.

And so we’re heading the right direction. And for those who are thinking about joining us, if you believe in rebuilding a city where everybody is valued, those who stayed are respected and protected and you build on, we’d love to have you come join us because it’s the astronaut found, the difference in Detroit from three years ago, you can even see it from outer space.

(Standing Ovation)