Capstone Project: Revamp Detroit Is a City

Pages: 10 (3676 words)  ·  Bibliography Sources: 14  ·  Level: Master's  ·  Topic: Urban Studies  ·  Buy This Paper

SAMPLE EXCERPT:

[. . .] While the above may not seem related to government meddling, it most certainly is. The interest rates charged and who gets money is greatly affected by government regulations, requirements and restrictions. Furthermore, local governments are going to get testy if they feel that house flippers are profiteering on prior homeowners in any way similar to what pawn shops and payday loan companies do when they take clear advantage of people that need money and need it now. In a similar way, people need housing and if they get priced out of their neighborhood, this will lead to them going to a poorer area or even leaving Detroit and a ton of people are doing the latter. However, beyond these cultural and mild governmental issues, the playing field is still fairly straightforward to traverse so long as the facts specific to Detroit are taken seriously and in a complete fashion.

Regarding the unique position in the industry, there are probably many people that would like to seize on the Detroit situation but due to the mass exodus still continuing and the fact that Detroit is actually in bankruptcy right now, this would seem to scare off a lot of people (Milford, 2014)(Seelye, 2011). Of course, the homes that are burned out and/or clearly flop houses for drug users and pushers, there are neighborhoods that have homes that are worth something and could be worth a lot more if rehabbed even in an incremental and basic fashion such as some fresh coats of paint, some new doors and drywall and other fairly minor fixes. It is not as of these houses can or should get granite countertops and the like as the focus should be more on affordable housing for people that want a solid house that does not cost too much. This focus is what will set our group apart from others because while profit is absolutely the motive, any notion that there will be gentrification or other ill cultural effects as a result of the house rehabbing is obviously not true. Also obvious is that the Detroit government is ill-equipped to undergo such programs but any razing or wide-scale rehabbing of the more squalor-ridden areas will need to be left to people with much deeper pockets.

One major reason why success is fairly straightforward to achieve is because there are not really any corporate giants that are engaging in the same tasks and upgrades. To be sure, most of the other outfits are probably just regional or local contractors that are trying to play the same game as the group behind this report. The difference with this group is that the cost-effectiveness of the upgrades as well as the houses chosen for the updates will both be done very carefully as spending too much and thus being out of tune with the price points and preferences of the local populace will only lead to less profit or even a loss on each house. The profit level for each house will not be all that great but if the number of houses is large enough, then the profit that can be realized can be quite large and it can be garnered in such a way that does not roil the local people and/or the governing bodies and people that are on the lookout for people that are looking to make "obscene" profits as a result of the suffering or challenges of others. The chances of this type of accusation being made skyrockets when minorities are dominant people involved. Much the same dynamic would exist in areas like Atlanta and Kansas City, MO and for the same reason. However, Detroit is the most poignant and obvious example of this. New Orleans, although a lesser one, has proven to be one as well.

One potential risk in this project is noted above and in prior positions in this paper and that would be the cultural and political influences that would likely weigh in on any outsiders or perceived outsiders engaging in housing rehab for profit. However, there are other limitations and risks that should be recognized as well. The second overall risks is the selection of the wrong houses in terms of being able to rehab and make a profit off of. To be sure, there are many houses in Detroit that are beyond repair and/or are subject to be razed or redeveloped in the near future. Beyond that, there are some neighborhoods that should be avoided as many people will not want to buy a home in said areas due to less than optimal location, crime or because the services in the area are lacking to none. Yet another risk would be the city not being willing or able to provide the proper support services such as issuance of permits, sending of inspectors and other very important tasks that only the local government can provide. It will have to be assumed in advance that a certain amount of lead time will be necessary to get things done with the local government so perhaps scheduling things in advance will be warranted as opposed to waiting for everything to be done. Meetings can be pushed back at the first sign of problems that will lead to the house not being ready for inspection.

More long-term risks is that the market will continue to look dim and this could lead to people either staying put or skipping town rather than investing in an improved house. Beyond that, the amount of people that would be ready and able to buy a house from an income or work location standpoint may be compromised and this could further shrink the pool of available buyers. This in turn would lead to long turnaround times between the purchase from sellers and sale of the homes to new buyers and this could hold true regardless of how quickly the home is turned around. Of course, the amount of money spent on mortgage payments and so forth would rise with each day and week that the home is not sold. As such, perhaps a cash-only purchase system and only for houses where profit is at least close to a sure thing would be the way to go so that homes can be queued up and ready for sale but not in a way that requires ongoing costs other than taxes and other fees that are not avoidable.

One major limitation to this program and plan is that it is not entirely known if the auto industry is going to continue to recover and the late spate of recalls that General Motors is enduring, and Ford as well to a much lesser extent, is proof positive of that. Furthermore, the other Detroit auto giant, that being Chrysler, is majority-owned by foreign bodies and the likelihood of that changing in the near future is not all that good. However, this is quite true of many carmakers in that they operate in the United States extensively but yet do not have their "roots" in the country. Examples of this would include Toyota, Hyundai, Kia and Nissan. There does not seem to be any indication that Ford and GM are next to meet Chrysler's fate but things can change on a dime if recalls continue or sales otherwise falter. Another limitation to this project and plan is that interest rates and/or financial regulations pertaining to the house flipping are subject to change quite quickly at the local, state and federal levels.

The data behind Detroit shows that the southwestern areas tend to be older in the 47 to 62-year range but most of the rest of Detroit is 40-47 or younger, often much younger. The younger buyers dominate the west side and the north east while the extreme northwest and southeast is mostly older buyers. The overall 2000 median age was 30.9 years old but it shifted to 34.8 years old in the ten years after that. As noted before, the general trend is a major shift out of the city rather than into it. The overall population loss is 25% from 2000 to 2010 but some areas were hit harder than others. While there was growth just west of Interstate 75 on the south side of Detroit and along the southern edge to the east corner, the vast majority of the areas show loss. Other than a few areas on the edges, there is no growth at all on the entire west side or the northeast side. The areas immediately south and east of the Hamtramck area are losing people in droves and the core of the west side, basically everything but the edges, has lost at least twenty percent over the least ten years (Data Driven Detroit, 2014).

The data for houses with families is also telling, The center of Detroit, especially due south of Highland Park and the Hamtramck area, are basically devoid of family-driven households with most dense areas of family-centered homes being on… [END OF PREVIEW]

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