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How Detroit Became a Model for Urban Renewal

A tram runs in downtown Detroit.A tram runs in downtown Detroit.
A tram runs in downtown Detroit. It's time for more cities to adopt Detroit's urban renewal model.Michael S. Williamson—The Washington Post via Getty Images

Imagine a bustling downtown filled with inviting shops, restaurants, and happy patrons. Just a few blocks away sit neighborhoods with dilapidated houses, buildings, and vacant lots, high unemployment and high poverty rates.

This isn’t the story of any one city. In fact, we see this playing out in far too many urban areas across the U.S. and around the world. Some of the wealthiest cities with vibrant and growing economies have neighborhoods that are struggling from lack of investment, jobs, education, and training.

This situation is urgent, but thankfully there is hope: American cities are excellent laboratories for innovation. And no city better reflects this than Detroit.

Since 2014, we have been working closely with Mayor Mike Duggan and community leaders to solve some of Detroit’s most pressing issues. All of our work—from creating a trained workforce to revitalizing neighborhoods to boosting small business expansion—follows a strategy of inclusive growth that strengthens the economy by helping existing residents.

Thanks to the cooperation and engagement of local leaders, significant progress has been made on these challenges. Take neighborhood revitalization, for example. We recognized early on that Detroit would not fully come back if we did not invest in areas beyond downtown and busy commercial corridors. The neighborhoods—communities surrounding downtown and Midtown Detroit that have been hardest hit by the city’s downturn—needed significant help.

In 2016, public, private, and philanthropic partners jointly developed the Strategic Neighborhood Fund (SNF), an initiative that brings together community developers and private, philanthropic, and public capital to help distressed neighborhoods.

Over the past two years, the SNF has been using funds to build commercial and residential real estate, preserve and add more affordable housing, and enhance community infrastructure and services such as pedestrian lighting, safer street crossings, park improvements, bike-share lanes, and the removal of blighted homes. The Coe—the first new mixed-use development in West Village in decades—is an example of one such project developed by the SNF. Now, drawing from philanthropic contributions and public subsidies, the SNF is working on raising an additional $130 million to revitalize seven more neighborhoods in Detroit, on top of the three it already oversees.

Through partnerships like the SNF, the city has been working to create “20-minute neighborhoods”: areas where residents are a 20-minute walk or a short bike ride away from basic needs and services, including grocery stores, restaurants, hospitals, schools, parks, and public transit. The goal behind this is to remove barriers to opportunity by enhancing convenience and quality of life for residents and creating the conditions for which people at all income levels can and want to live.

Boosting growth of small businesses, particularly those owned by minority entrepreneurs, has also been a critical part of our approach to neighborhood revitalization.

Detroit has the highest percentage of black-owned businesses, 77%, out of America’s 50 most populous cities. Meeting the needs of these entrepreneurs has been vital in unleashing their power as drivers of opportunity and local economic growth. The Entrepreneurs of Color Fund—facilitated by the Detroit Development Fund, with funding from JPMorgan Chase and the W.K. Kellogg Foundation—provides low-cost loans and access to technical assistance to people who can’t obtain traditional forms of capital. This fund has been so successful that in 2018 it attracted new investors, tripling in size to $18 million and recently expanding to San Francisco, Chicago, and the South Bronx.

While much work remains to be done, these comprehensive efforts on the ground have yielded a blueprint for addressing the most vexing issues faced by cities around the world.

Recently, JPMorgan took this model to France, announcing a $30 million investment across Greater Paris with a particular focus on the region’s neighborhoods with the highest poverty and unemployment rates. The investment will target distressed neighborhoods with the goal of boosting small business growth and providing people the skills training needed to climb the economic ladder.

Our urban renewal model works because it helps provide people with opportunities to improve their lives. The residents I’ve met want civic, business, and community leaders to set aside their parochial interests and work together to solve community problems.

My hope is that more cities will look to our work in Detroit for solutions to stubborn economic challenges. We all have a stake in restoring struggling cities, and we can only get there through meaningful collaboration.

Peter L. Scher is the head of corporate responsibility and chairman of the mid-Atlantic region for JPMorgan Chase.