“Heck, we invented the middle class,” wrote journalist Mitch Albom of Detroit in its heyday. Today, the city is inventing something else entirely. A small group of billionaires is leading what surely must be the largest privately financed urban transformation in American history. Detroit’s new model for growth is premised on radical inequality, and it may well perpetuate it too. Is it good news anyway?
In a city where the median household income is about $26,000 per year, three billionaires now own most of the downtown and its riverfront. Another extravagantly wealthy landowner owns nearly 2,000 parcels. All four assembled their land portfolios while the city’s real estate market was flatlining—that is, when Detroit has been littered with so much abandoned property that land ownership brings more costs than value. Since 2005, more than one-third of all properties there have gone into mortgage or tax foreclosure.