June 2, 2017
Detroit neighborhoods that survived the subprime mortgage crisis and recession had something special in common: community.
Margaret Dewar and Lan Deng, both professors of urban and regional planning at the Taubman College of Architecture and Urban Planning at the University of Michigan, studied three Detroit neighborhoods. They found that those under the leadership of a community development corporation, along with volunteer efforts, weathered the city's housing crisis better than the rest.
"This is evidence of what works," Dewar said. "With volunteers, you can affect the strength of the real estate."
Their research looking at whether community efforts could overcome a major negative external shock such as the mortgage foreclosure crisis is forthcoming in Housing Policy Debate and co-authored with U-M urban and regional planning professor June Manning Thomas and recent Ph.D. graduate Eric Seymour.
Detroit was hit hard by foreclosures between 2005 and 2014. In 2005, subprime mortgages made up 68 percent of all mortgages in the city, compared to 27 percent statewide. During the nine-year decline, more than a third of homes in neighborhoods with previously strong housing markets experienced foreclosure.
They studied Grandmont Rosedale on the city's northwest side and MorningSide and East English Village, both on the east side. They were defined as having strong neighborhood housing markets prior to the housing crisis because they were predominantly owner-occupied, with property values and household income comparable to or higher than the city median, and had largely intact physical environments.
"These neighborhoods had the social capital to tap into," Deng said. "As the people who could make collective efforts to stabilize their neighborhoods, their success or failure determined the future of their neighborhoods as well as the future of the city."
Mortgage foreclosures in working-class MorningSide were more severe — 43 percent from 2005 to 2014, compared to 38 percent in middle-class East English Village and 35 percent in middle-class Grandmont Rosedale.
These areas, besides having long-standing community development corps, also have neighborhood associations that organize residents for collective action such as radio patrols for crime prevention. The areas also frequently received external support such as foundation grants for grassroots efforts.
Residents in all three areas also used the Detroit Vacant Property Campaign plans to learn what to do. They counted and mapped properties and supported programs to prevent mortgage and tax fraud. They also worked to fix the effects of vacancy and stop further property destruction.
Nonprofits and the city's land bank acquired properties to rehabilitate and sell to reinforce neighborhood housing stock.
"They've had hard times and haven't completely recovered," Dewar said. "The city government basically disappeared, so it really was up to the individuals working together."
Deng says it takes years of effort.
"Residents doing it all by themselves is really hard, but in combination with a community organization it creates a strong structure for neighborhood survival," she said.