The future of the American city

Shortly after Barack Obama was inaugurated in January 2009, Rip Rapson, head of the Kresge Foundation, a Michigan-based family endowment, got a call from a senior White House official. The topic was the economically blighted city of Detroit. Many other foundations received a similar message. “We don’t want Detroit to turn into President Obama’s Katrina [the hurricane that wrecked New Orleans during George W. Bush’s presidency],” the official said to Rapson. “What can we do to help?” Based in Troy – one of the featureless suburbs encircling Detroit – the Kresge Foundation was already spending millions to help clean up the city’s toxic riverfront. By definition, any regeneration project in America’s most unfortunate city is a drop in the ocean. There are slums in Calcutta that offer more hope than parts of Detroit. But given the corruption that was then gripping City Hall, the White House dialled the right number. Four years later, downtown Detroit is in the midst of a mini-boom. “Most people probably haven’t registered it yet,” says Rapson. “But Detroit is beginning to look up.”

The story of downtown Detroit’s emergence from the ashes is still too confined to declare the city as a whole in revival. Just three months ago, Detroit’s city hall was placed under the control of an emergency manager. The city faces at least 18 months of deep stringency as it tries to dig itself out from a $15bn debt burden. Yet parts of Detroit were already functioning pretty well without much input from City Hall. A few days ago, Whole Foods, the organic supermarket chain, opened its first-ever store within Detroit’s city limits. The occasion was marked with street parties in its midtown neighbourhood. Others, including Detroit’s impoverished black majority, may feel less excitement about the arrival of an outlet some call “Whole Pay Check” because it is so expensive.

There may be greater enthusiasm in September when ground will be broken on Detroit’s first streetcar project since the 1950s. The M1, as the tram route will be known, will link downtown to midtown Detroit. There is poetic irony to the notion that Motown’s comeback might be powered by urban rail. Detroit used to have many tramlines: they were ripped out at the behest of the auto companies.

“Most people figured out that Detroit needs mass transit to revive,” says Dan Gilbert, founder and chairman of Quicken Loans, America’s third-largest mortgage originator. A native of the city, Gilbert took a bet in 2010 when he shifted his company’s headquarters from suburban Livonia to downtown Detroit. It now has 10,000 employees there. “I’m putting everything I have into the revival of Detroit,” says Gilbert. “There is no Plan B.”

Audacious as his gamble is, the odds may be turning in Gilbert’s favour. From the baking sunbelt to the rain-kissed northeast, an urban revival is spreading across America. The trend’s furthest inklings go back many years: New York has been clawing its way back from its seedy 1970s nadir for more than a generation. The trend is also uneven. Los Angeles and Chicago, America’s second and third-largest cities, are both still revitalising their downtowns. And it has also been slow. The most devastated post-industrial cities, such as Cleveland, Buffalo, Baltimore and Detroit, have only recently showed stirrings of life. Yet there is an energy – and ambition – to urban America that was missing a few years ago.

In 2011, for the first time in more than 90 years, America’s largest cities registered higher population growth than their combined suburbs, according to William Frey, a leading demographer. The signs are this will continue. While the cities are gentrifying, many of America’s suburbs are heading downmarket. It is the invisible side of the same coin. Frey writes: “This puts the brakes on a longstanding staple of American life – the pervasive suburbanisation of its population which began with widespread automobile use in the 1920s, to the present day, where more than half the US population lives in suburbs.”

Students of the “new urbanism”, such as Richard Florida, author of The Rise of the Creative Class, which argues that cities are the best Petri dishes for new ideas and innovation, say their revival is assisted by a generational shift in US culture as well as deeper economic trends. Florida, who now lives in Toronto, just 250 miles north of Detroit (but still a million miles in terms of its vibrancy), grew up in suburban New Jersey in a second-generation Italian-American family. Like so many other immigrants, his parents fled the claustrophobia of Newark for the freedom of the suburbs. “To them the city was a ghetto – it was stifling and crowded and dangerous,” says Florida. “But to my generation, the suburbs represent a kind of poverty of living and it is the cities, rather than the suburbs, where you can breathe freely.”

In despair over City Hall’s standard revival package – often little more than tax breaks for new sports stadiums and Vegas casinos – the new urbanists believe the only worthwhile goal is to attract talent. Good jobs will follow. As Michael Bloomberg, mayor of New York, told the FT last year: “Talent attracts capital, not the other way round.”

Downtown Detroit: ‘There are slums in Calcutta that offer more hope than parts of Detroit’ – but the city is in the midst of a mini-boom

As New York has shown in the past 20 years, when a metropolis wants to bring in more educated people it needs to make itself both safe and entertaining. In a city like Detroit, which had as many murders in 2012 as New York City, in spite of having an eleventh of the population, that is a tall order. Yet self-proclaimed “early adopters”, such as Dan Gilbert, who in the past three years has invested $1bn in downtown Detroit’s property, in addition to his Quicken Loans outlay, think Detroit already has the assets. They just need refurbishing. In spite of Detroit’s prolonged dilapidation, it is home to one of America’s finest symphonies, opera houses and institutes of art. Detroit’s often half-empty, and graffitied, high-rise office blocks around Campus Martius, the downtown plaza, also have some of America’s best examples of art deco architecture. In its Eastern Market, which opened in 1891, Detroit has the longest-running farmers’ market in the US. Like an oasis, Eastern Market is coming back to life amid the urban “food desert” that covers most of the city.

It is little surprise that many globally renowned retailers view downtown Detroit as an experiment worth joining. “Everything we are trying to do is fun and cool,” one of Gilbert’s employees repeats to me several times on a tour of the downtown’s sprouting coffee shops, open air restaurants, sculpture gardens and boutiques. Much like Quicken Loan’s own offices, Gilbert is repainting Detroit’s drab centre in the primary colours of Silicon Valley. More than 100 architects have entered a competition to design a new retail landmark on the site of the legendary Hudson store, which in the 1920s played host to the busiest intersection in the US. Today, it is an empty lot. Tomorrow, it could be iconic again.

To judge by the numbers, the strategy appears to be working. For the first time in a century, Chrysler, one of Motown’s Big Three, has opened an office in Detroit. Other big hirers include Blue Cross Blue Shield, the health insurer, which now employs 4,000 people in downtown Detroit. Like Gilbert’s mostly out-of-town workforce, most are young graduates. According to a survey of those who have recently moved to downtown Detroit, which has near-full residential occupancy ratios, more than half were between the ages of 20 and 29. And they were far likelier to have a degree than the US average.

Detroit Eastern Market: The longest-running farmers’ market in the US is coming back to life amid the urban ‘food desert’ of most of the city

In Detroit as a whole, less than a quarter of students even finish high school. Meth and other hard drugs are rife. Yet its Zinfandel-sipping, downtown crowd better resemble their counterparts in well-heeled Austin or Seattle. “Who would have thought in downtown Detroit that our problem would be a shortage of residential space?” says Gilbert. The rest of the city has almost 80,000 abandoned homes, including some choice former mansions. But most of its thinly policed neighbourhoods are too edgy for even the hardiest of newcomers. For all the affinity between the two, you may as well separate the two Detroits with a medieval moat. Yet a few years ago there was not much of a castle to protect. “Detroit’s revival has to start somewhere,” says Gilbert.

Some academics argue that the recent vibrancy of many US cities is a temporary byproduct of the big housing crash of 2007, which forced young graduates to postpone their move to the suburbs and put off starting families. But the demographic changes behind the US urban revival long predate the Great Recession. If it were not for high levels of immigration, mostly from Mexico, the US birth rate would have fallen even more rapidly than it has in the past decade. The shift towards smaller families – and also voluntary childlessness – goes back a long way. In the 1940s and 1950s when the US flight to the suburbs was in full flow, half of all US households had children, according to the US census. That is projected to fall to below a quarter by the end of this decade.

For the single-occupancy types who can afford it, the city is a far less lonely place to live. In the light of the freeway-dominated culture of the suburbs, America’s recent mania for urban bike sharing is understandable. So too is the millennial generation’s apparent disdain for cars. Far from being more dangerous, density can be reassuring. “In suburbia no one can hear you scream,” says a character in The Unwinding, a new book by George Packer that explores America’s changing undercurrents. As another of Packer’s characters says about Tampa, one of the most suburban, multi-lane cities in the US: “No encounters ever happen by accident in Tampa. Or if they do, they’re traumatic.”

Decrepit mansions in Brush Park, Detroit

America’s growing love affair with a more European-style city is also boosted by the retirement of the US baby boom generation, many of whom are as bored of the suburbs as their children. Like their offspring, many also wrestle with their inner Kurt Cobains. If you combine the steady rise in urbane “empty nesters” with the growing acceptance of gay culture and the mushrooming of independent charter schools that give families the option of staying on when their children reach school age, shifting US demography is a friend to the reviving downtown.

Technology is also an ally. The big out-of-town retail centres once spelt the death knell of Main Street. But the rapid shift to online retailing is now rendering many of them obsolete. According to the International Council of Shopping Centers, at least a tenth of America’s remaining 1,000 enclosed malls will shut in the next seven years, mostly because of the internet. That is why people like Gilbert put so much emphasis on “place making” – creating a spectacle out of the street life that only cities can offer. It means good food, open-air events and renovated parks. Out go the discarded needles. In come the open-air chess boards. “American cities are becoming more and more European in their sensibility,” says Florida. “It is all about lifestyle.” As the new urbanists put it (somewhat annoyingly), the US urban revival is driven by the “3Ts” – technology, tolerance and talent.

Cities like Detroit owe much of their improved prospects to the efforts of a battle-hardened generation of social entrepreneurs, such as Sue Mosey, the unofficial “mayor of Detroit midtown”. Linked to the city’s downtown by the brutal eight-lane Woodward Avenue, Detroit’s midtown is a separate revival story altogether. A native of Detroit, Mosey started out as a community organiser, much like Barack Obama. She too followed the methods of Saul Alinsky, the Chicago 1960s radical, who counselled resistance to the corporate-controlled city machines, which in Detroit meant companies like Ford and General Motors.

Sue Mosey. The unofficial mayor of Detroit midtown is a ‘one-person regeneration machine’

Nowadays, says Mosey, the game is turned on its head. It is about collaborating with the private sector. Her largest local employer is the Ford Medical Center. For all intents and purposes, local government has vanished. Mosey’s small office on Woodward Avenue is the main conduit for private and federal money to midtown Detroit. Her group keeps the streets clean, renovates the buildings and funnels a myriad of grants and subsidies to local projects. She helped lure Whole Foods to the area. Next door is the celebrated Great Lakes Coffee Shop, which also sells grapefruit Pellegrino. Wherever you look there seems to be a yoga centre.

“I was protesting against Roger Smith [the former chief executive of GM] long before Michael Moore made his movie [Roger & Me, 1989],” says Mosey, whose casual ponytail and faded jeans belie a missionary beneath. “But we’re not living in the age of confrontation any more. I’ll take support from where it is available. If you know where to look, there is a lot of capital out there.” For a former radical, Mosey has an extraordinary number of multimillion-dollar foundations on her speed dial. In contrast, one gets the sense that the politicians in City Hall call her more often than she calls them.

There are many linchpin figures like Mosey in US cities, reflecting both America’s entrepreneurialism and the political bankruptcy of so many of its local governments. In many cases revival is happening in spite of politics. “Sue Mosey is a one-person regeneration machine,” says Bruce Katz from the Brookings Institution, whose new book, co-authored with Jennifer Bradley, The Metropolitan Revolution, argues that only cities can rejuvenate US competitiveness. “Mosey is a dealmaker and a catalyst for what local governments can’t do: she literally remakes neighbourhoods and makes people want to live there.”

The US is a complex country. From the Jeffersonian farmstead to the small town and the suburb, America’s sense of exceptionalism has often excluded the city altogether. Its self-imagination rarely acknowledges the hidden but always central role of race in its great demographic odysseys. Jefferson's rural arcadia was run by slaves. The suburbs and small towns are mostly white. Meanwhile, until recently many of America’s urban downtowns were seen as no-go areas run by ethnic gangs. In Detroit, which is 83 per cent African-American, most of its whites, including Dan Gilbert’s parents, and Sue Mosey’s, fled to the suburbs after the 1967 riots that killed dozens of people and burnt thousands of properties. The same was true of Washington DC, Chicago, Boston and elsewhere. It was called the White Flight.

Today, people such as the author Alan Ehrenhalt talk of a “Great Inversion”, in which the educated (of all colours) are moving to the city and pricing the (often white) poor out to the suburbs. Some call it gentrification, or even “Brooklynisation”, after the revival of the New York borough. Others, such as Elizabeth Kneebone and Alan Berube, also at Brookings, talk of the suburbanisation of poverty.

Ken Sawa. Sawa’s Catholic Charities group offers a safety net to people in the LA suburb of San Bernardino

If Sue Mosey is the unofficial mayor of midtown Detroit, Ken Sawa is one of San Bernardino's saving graces. Head of the Catholic Charities group for the area, Sawa's group offers a safety net for tens of thousands of people across this sprawling outgrowth of Los Angeles. Home to 4.1m people, the neighbouring counties of San Bernardino and Riverside, which some call the “Inland Empire”, offer a seemingly endless, low-rise vista from the city limits of LA to the deserts of Nevada. Much of what is arguably America’s largest bedroom community has no distinct character at all. Yet in parts it has a murder rate to rival that of Detroit. Pointing down one of the main drags in the bankrupt city of San Bernardino, I tell Sawa that the street looks safe enough to me. It has the usual fast-food diners, pawnbrokers, cheque-cashing outlets and metal-bashing shops of so many poor or near-poor suburban subdivisions in the US. But there are no pedestrians. The sight evokes neither fear nor hope, I say. My instinct is wrong. “I would be careful walking down this street alone day or night,” says Sawa.

Just as LA’s Inland Empire has no real landmarks, it lacks a social pulse. That may be because even its poorest residents are forced to spend so much of their time in their cars. Much like Packer’s Tampa, chance meetings are something to be feared. Some of San Bernardino's residents can barely afford vehicles, and live in as much trepidation of missing their next auto-loan payment as homeowners do for their mortgages. According to a survey of Penn Hills, a suburb of Philadelphia, its residents spent 32 per cent of their income on housing and 27 per cent on transport. It costs almost as much to fill their petrol tanks as it does to pay the rent. Given the enormous distances, the story is even worse in San Bernardino. Another survey shows that only a quarter of the jobs in Los Angeles are within a 90-minute commute of San Bernardino. Yet the City of Angels is where the good jobs are. According to Kneebone and Berube, those living near or below the poverty line in the US pay on average 40 per cent more for car insurance than wealthier Americans.

“If I lose my car, I lose my livelihood – period,” says David Hawkins, 42, a former mortgage broker, who lost his job in 2009 and now works at a homeless shelter. “All I do is drive my children to school and my wife to work and then myself to work – each leg is 30 minutes. I do the same again in the evening. If you can’t drive in the Inland Empire you’re finished.”

San Bernardino, part of LA’s ‘Inland Empire’

In the first decade of this century, the number of suburban poor Americans – defined as $23,000 a year for a family – rose twice as fast as in the cities. In 2010, for the first time in US history, the number of poor living in the suburbs exceeded those living in the cities. The same is even truer for America’s “near poor” – those defined as living at twice the poverty level. And yet, they are largely invisible to the main sources of money – public and private – the lion’s share of which continues to go to the cities. One recent study found that the flow of public and private benefits was a seven to one ratio for Chicago versus its suburbs and five to one in Los Angeles even though each had more poor in their suburbs. “If you’re a philanthropist and want to do something about poverty you never think of the suburbs,” says Sawa, whose charity assists Catholics and non-Catholics alike (roughly 40 per cent of the two counties is Hispanic). “People’s image of poverty in the US is way behind the reality.”

Every now and then Sawa hosts a “poverty simulation” day in which participants – people in the police, judiciary, city government and other professions – are invited to try to live on a poverty line budget in San Bernardino. They discover their water or electricity gets shut off without warning and that it costs $200 to reconnect. They lose their two-weekly payslip when they turn up late. A tenth of their pay gets sliced off by the cheque cashier (without a credit score it is very hard to get a bank account). And for even the simplest job, they need to be credit checked, drug tested and fingerprinted. “My teenage daughter is a hostess in a restaurant,” says Sawa. “Even for that she was fingerprinted.” One bad rap, one devastating “credit event”, and you could lose your car or your home.

In San Bernardino alone, there are officially 22,000 homeless schoolchildren, most of whose parents live in “extended stay” motels. It is a similar tale in Prince George’s County, Maryland, or Nassau County, New York. Most of the good jobs are too far away or too expensive to reach. But this is where you can afford to live. In LA they call it “cheap dirt”. “You don’t realise that you’re middle-class until you stop being middle-class,” says Kayava Lenoir, a 36-year-old African-American college graduate who lost her corporate sales job in 2009 and can now only find menial work in San Bernardino. She long ago defaulted on her home. “When I was earning a good salary, I took vacations in Jamaica,” she added. “Now I date men who’ve never been on a plane.”

Even on the sunnier side of the Inland Empire, on the outskirts of Riverside city with its enchanting Spanish revival buildings, things are less comfortable than they look. The suburb of Orangecrest – so named for the actual orange grove that was removed to make way for it – looks nearly as plush as the cul-de-sacs in Desperate Housewives. One of its denizens, Imelda Santana, 51, a Mexican-born American, lost a very well-paid job at Citibank in 2009. As is often the case when financial calamity strikes, her marriage disintegrated. Now she lives in a large house with her three daughters. She has not made mortgage payments for two years. Several times she has been fined by the neighbourhood association for failing to mow her lawns or repaint the exterior of her house. Her creditors pursue her day and night. Yet she seems almost serene about her dramatically straitened circumstances. “I’ll short sell this house before the bank repossesses me,” she says, waving her hands casuially. “God will make sure I’m OK.”

Imelda Santana. The resident of LA suburb Orangecrest once held a well-paid job at Citibank. Now she is hounded by creditors and has not made a mortgage payment in two years

Until recently, Santana worried that she and her daughters stood out in Orangecrest. Then one afternoon she noticed how many of her neighbours had been disconnected by the Edison electricity company: the utility leaves a tell-tale red disconnection tag on every door. “People try to remove those tags as quick as they can,” she says. “It’s like a public shaming.” As Santana speaks, she fiddles with a glass pendant around her neck, like she would a rosary. Inside are the birthstones of each of her daughters. “If God was not on my side, I would have fallen into depression or drugs,” she says. “I’ve seen that happen often. But I know I will come back stronger.”

Among US urban scholars there is disagreement about whether the impoverishment of so many US suburbs and the return of urban downtowns is a blip or a long-term trend. Some believe that after a bad few years American suburbia is poised to resume its role as the main engine of US economic growth. They do not anticipate a new urban golden age. For every sparkling new Pittsburgh or Denver, there is a still devastated Flint, Michigan or Gary, Indiana. As the US housing market starts to revive, even in “sandy state” foreclosure zones such as San Bernardino, their scepticism will be tested in the next two or three years. For now, most of the evidence is against them. During the subprime boom that ended in 2007, the advice for mortgage-seekers was to “drive until you qualify”. Almost anyone could eventually. The more America’s cities come back to life, and the more condominiums they build and the more organic stores they open, the further the poor will have to drive. It is a geographic inversion of the American Dream. “The suburbs were created to house the new middle-class in the 20th century,” says Katz of Brookings. “But the economy they were built around is vanishing. In the 21st century most of the good jobs are in the cities.” Nowadays the dream is as likely to involve an apartment close to the action in Manhattan or Haight-Ashbury as a picket fence McMansion in the suburbs. Owning a car is optional. But among suburbia’s current and former “boomburgs”, many people can no longer afford to dream. They are too busy plying the freeways. As Sawa jokes, “You can’t risk falling asleep at the wheel.”

Edward Luce is the FT’s chief US commentator. To comment on this article, please email

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