Abandoned Buildings in Detroit

We took a 2-person vote on the most interesting stop along our road trip and we both said Detroit.  The city was unlike anything we’d ever seen before.  It’s a city built for 2 million people, but only 700,000 live there now, which means that there are seemingly endless blocks of abandoned buildings as you move away from downtown.  We had excellent Airbnb hosts and we also had the good fortune of meeting up with Adam’s friend from college.  

Abandoned Buildings

Massive portions of Detroit feel like ghost towns.  Our Airbnb was not in the best neighborhood, but it also wasn’t in the worst.   It was on a street where houses were inhabited and were also quite sizeable.  But if you went one block in any direction – north, south, east, or west – nearly all the homes were either abandoned or dilapidated.  We saw this all over the place.  A block of lived-in homes.  A block of abandoned homes.  Over and over again.  And when we drove a bit further away, there was the skeleton of the Packard Plant.  It reminded Adam of the scene in Titanic where the film cuts back and forth between the rotting sunken hull and the lively, ornate ballrooms as the ship crossed the sea.  The empty blocks are not welcoming – in fact, they’re a little scary.  We took a 10-minute drive across 8 mile and then went to visit a project that our friend was working on – the Herman Kiefer Hospital.  The city is trying to develop the enormous compound, which lies completely abandoned.

A Home with a Decent Mortgage

Our Airbnb hosts live in a beautiful old house, which we can only imagine was even grander during the boom years of the auto industry.  It had a large sunroom, an organ and a piano, stained glass windows, a spacious living room, a separate dining room, a chef’s kitchen, and multiple bedrooms.  Zillow price: $187,000.  Anywhere else, it would have been worth so much more.

An Actual Dog Moat

Our hosts have 4 dogs.  Two of these dogs are 1-year-old Great Danes, which means they’re basically mini horses.  Because they’re so young, they are very playful and not fully aware of their size and strength.  One hopped up on a chair to stand higher so that he could lick Adam’s face comfortably.  Our hosts said that they leave their door unlocked in the summer, noting, “We dare someone to come in without our permission.” 

Going to the Opera

Our hosts offered to get us cheap tickets to the final showing of Cyrano at the Michigan Opera Theatre.  We immediately accepted and were so glad we went.  The entire show was in Italian with subtitles played across an electronic screen above the stage. We can’t say that this is our favorite form of theatre, but we enjoyed ourselves.  We both closed our eyes and just listened to the music for a good chunk of the first act.

It was a special night because it was the final showing of an opera produced by David DiChiera, the founder and artistic director of Michigan Opera Theatre.  He had a long career in music and helped to revitalize the city in its darkest periods.  He was recently diagnosed with pancreatic cancer.  When the show was over, the crowd gave him a standing ovation for nearly 5 minutes while he cried on stage.  It was a special moment.

Lessons Learnt

  • Detroit is a city built for 2 million, but only around 700,000 people live there today.  Within Detroit’s land area, you could supposedly fit Manhattan, Boston, and San Francisco.
  • The population of Detroit has stopped declining, but it isn’t growing meaningfully yet.
  • From a real estate perspective, it’s important to focus on restoring entire neighborhoods.  Simply dismantling homes and / or trying to rebuild them isn’t powerful enough and they don’t have the funds to remove all of the abandoned homes.  In Detroit, the average cost to remove a single-family home is around 15-25K.
  • The city’s budget is miniscule compared to other cities.
  • Detroit owns most of the real estate.  We asked whether banks have significant ownership and he said no. When individuals default on their mortgage or abandon their homes entirely, the banks assume ownership, but this means that they would also have to pay property taxes.  For many banks, paying the taxes on these “worthless” homes doesn’t make sense because they won’t be able to recoup the losses with their eventual sale. This means that the vast majority of these dilapidated homes are actually owned by Detroit.