Detroit Foundations Subsidize Business Employees’ Move Downtown

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July 23, 2011; Source: Detroit News | Last week, NPQ covered some of the controversy concerning Detroit foundations, specifically the Wall Street Journal's coverage of the dynamic between the City government and the Kresge Foundation. How much can foundations really do to turn around a troubled city like Detroit?

This article mentions a program designed to attract corporate employees who work in downtown Detroit to move into downtown and surrounding neighborhoods. The program is called Live Midtown, which makes financial incentives available to the 30,000 or so employees of the Detroit Medical Center, the Henry Ford Health System, and Wayne State University to buy or rent in the New Center, Midtown, Virginia Park, and Woodbridge neighborhoods. The $1.2 program is capitalized by $200,000 from each of the three employers matched by $200,000 apiece from the Kresge, the Hudson-Webber Foundation, and the Michigan State Housing Development Authority. Since January, 165 people have receive rental assistance and 15 have receive homeownership help from Live Midtown.

This week, a new program modeled on Live Midtown–called Live Downtown–will target downtown Detroit employees of Quicken Loans (1,700 employees downtown), Compuware Corp. (1,800 downtown employees), Blue Cross Blue Shield of Michigan (6,000 Detroit employees by next spring), Strategic Staffing Solutions, and DTE Energy to get them to buy or rent in the downtown, Corktown, Eastern Market, Lafayette Park, Midtown and Woodbridge neighborhoods. Homebuyers get a $20,000 forgivable loan for the purchase of a primary resident, renters get $2,500 toward the rental of an apartment in year one and $1,000 in year two (existing employee homeowners and renters get some assistance to stay in the neighborhoods). Although the Detroit News article doesn't say, presumably the foundations will also be involved in subsidizing Live Downtown for the corporate employees.

Do these programs work? They aren't on their own going to turn around a troubled city like Detroit. As of June, the Live Midtown program has approved homeownership and rental assistance for 72 Henry Ford, 50 DMC and 28 Wayne State employees, but only 15 are looking to purchase. During the same six month period, home and condominium sales in Detroit are down 10.3 percent compared to the same period in 2010. This is part of the foundation challenge. Foundation dollars, as critical as they are, are microdollars addressing macroproblems.—Rick Cohen