The continuing revitalization of downtown Detroit, Michigan is a story being told all around the world. It is hard to believe that the General Motors bankruptcy was less than a decade ago and the city’s bankruptcy was less than five years ago.
The region that once served as a prime example of a declining Rust Belt manufacturing economy is now in the midst of an urban renaissance that has not only transformed the Motor City’s skyline, but also completely changed the way people think about Detroit.
The city is now one of the hottest national markets for stadiums, office, retail, residential, industrial, restaurants, and mixed-use development. With all of this activity, a long list of developers and investors are quite literally banking on Detroit.
One of the hidden economic dimensions behind the renaissance is the evolving financing dynamics behind the developments that are both making headlines and raising the bar.
According to the U.S. Bureau of Labor Statistics, unemployment in the Detroit area (as of February 2018) has dropped from 4.8 percent to 4.2 percent over the past year alone. As more people reenter the workforce, the need for more and better housing becomes essential.
Understanding how and why groundbreaking multifamily communities are securing the financial commitments required to become reality is an important first step in appreciating how a city’s economic and development landscape evolves throughout the course of an accelerating growth cycle.
Civic officials in Detroit and elsewhere are more strategic and proactive today with respect to financing.
In order to fuel Detroit’s momentum, developers and civic officials in Detroit need to continue to encourage more banks, pension funds, and life insurance companies to pay attention to and participate in investing in the city’s renaissance. Getting more institutions involved helps disperse the risk.
Rendering courtesy of City Club Apartments-CBD Detroit.