Uncovering JAPA

Who Benefits From Detroit's Development Boom, and How?

In the last decade, private developers have invested more than $5 billion in downtown Detroit, taking advantage of public subsidies and low land values. How have these projects benefited community members, particularly those who have suffered the consequences of systemic disinvestment in public infrastructure?

Detroit's CBO: Lessons in Development Equity

In "Early Lessons from Detroit's Community Benefits Ordinance," Journal of the American Planning Association (Vol. 87, No. 2), Lisa Berglund assesses the impacts of the first-ever community benefits ordinance (CBO), approved by Detroit voters in 2016. The case study, informed by stakeholder interviews with neighborhood advisory council (NAC) members, activists, planners, and developers, sheds light on the strengths and weaknesses of mandating public benefits through legislation.

Although Detroit's ordinance was the first of its kind, community benefits agreements are a widespread practice. In a succinct literature review, Berglund explores how developers take on the costs of providing benefits in exchange for local support for a project. Benefits won through these agreements vary widely and include outcomes such as "local hiring, affordable housing, promises to regulate environmental impacts, or the provision of assets like community centers, daycare, and public spaces." By requiring negotiations instead of resorting to ad-hoc community benefits agreements, Detroit's CBO represents an evolution of this process.

The initial ordinance, drafted by Detroit residents, was rejected by the mayor's office and city council members for being hostile to potential development. After a contentious campaign, a revised ordinance was approved by voters. This CBO applies to projects that are valued at $75 million or more and receive over $1 million in tax abatements or city-held land. Negotiations, arranged by the Planning and Development Department, take place between the developer and a nine-member NAC made up of neighborhood residents. Once an agreement is reached, enforcement of the benefits is carried out by the city's Civil Rights, Inclusion, and Opportunity office.

What are the results of formalizing the process of community benefits negotiations? Berglund's interviews with NAC members and city staff showed that Detroiters regard the CBO process as an opportunity to have their voices heard. Developers also support the process, noting in interviews that "NAC involvement genuinely provides insights that...make their developments more productive and useful amenities in the neighborhood." The CBO has generated meaningful results: as of publication, 10 negotiation processes had been completed and 168 unique benefits had been secured by NACs for their communities. Table 1 categorizes and quantifies these benefits:

Key Benefit Type Benefits Number of Benefits
Parks and public space improvements Park landscaping
New parks
Streetscape improvements
Community gathering places
Dog parks
Sports facilities
Jobs and workforce development Priority hiring for Detroiters
Funding for city employment programs
Vocational scholarships
Sponsorship for hiring fairs
Youth career mentorship
Construction Management Protective fencing
Pest control
Work hours
Board up vacant structures
Construction signage
Public engagement Consultation for future projects
Development updates
Alignment with existing neighborhood plans
Community events
Parking and public transportation Permitting systems
Additional parking
Collaboration with MDOT
Pedestrian/cycling infrastructure
Traffic control plans
Affordable housing 20% affordable to 80% AMI
More liberal affordability than city ordinance

Detroit's CBO: Challenges and Potential Improvements

However, the ordinance is not without its challenges and limitations. For one thing, neighborhood advisory councils that had members who were involved with community groups or equitable development nonprofits were more effective in their negotiations. NAC members who lacked policy knowledge felt they needed more support from the Planning and Development Department. Another factor is that the ordinance only requires one meeting between the NAC and the developer, requiring that negotiations occur on a very short timeline. Finally, at least 20 percent of benefits were redundant with existing policies, suggesting that NAC members wasted time by negotiating for items that would be in place regardless.

As the title makes clear, the Detroit CBO is still in its infancy and it is too soon to measure the long-term impacts of the policy. However, Berglund's review evaluates the initial success and challenges of the program and suggests improvements that could increase its efficacy. Berglund highlights the need for CBO negotiations to be more thoughtfully integrated with other parts of the development timeline. She also proposes that planners should provide additional training and support for NAC members. Finally, while it is too early to determine how well benefits are implemented, Berglund hypothesizes that by providing a codified process for reporting on benefits, the CBO is a better system for enforcing agreements.

While outside the scope of Berglund's review, the question remains: are Detroiters benefiting from the development boom? Is the Community Benefits Ordinance building a more inclusive and equitable Detroit, or do its developer-friendly practices maintain the status quo? These questions should be top of mind for cities considering similar policies. While Detroit's CBO takes a step towards ensuring that residents aren't left behind, it is not without room for improvement.

Top image: wyliepoon/flickr.com (CC BY-NC-ND 2.0)

About the author
Gemma Holt is a Master in Urban Planning and Master in Public Policy candidate at Harvard University.

October 7, 2021

By Gemma Holt