Detroit sues Census Bureau, alleging its housing counts underestimate city's population
JOHN GALLAGHER

Detroit can't cherry-pick statistics, ignore inconvenient facts

John Gallagher
Detroit Free Press

Being a business journalist, I find raw data a fascinating thing to mine for insights — especially when the data tell a tale about Detroit.

Digging into data about Detroit, taking a "just-the-facts" approach, can help us separate reality from hype. It can help us measure which programs are working and which are wasting tax dollars.

Basing our judgments on data is a discipline that keeps us focused on the best solutions to urban ills. As Detroit Mayor Mike Duggan told the CityLab conference in Detroit last year, "I’ve never found a way to drive change without data." Or as former New York Mayor Mike Bloomberg used to tell his aides, "In God we trust. All others bring data.”

Looking at Detroit's recovery, we see that many statistics tell a somewhat positive story of the city's recent rebound. Population loss has slowed (if not yet actually reversed); business activity is up; projects like the new Jeep plant on the east side will create thousands of new jobs.

That's all good. But the problem with those upbeat statistics is that the deeper we dive into the data, the less sure we are of what story  data tell us.

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Fiat Chrysler Automobiles is updating the Jefferson North Assembly Plant and converting the Mack Engine factory into an assembly plant on the Eastside of Detroit, photographed on Tuesday, Aug. 13, 2019.

It's not just that data cannot capture ephemeral concepts like hope, resilience and racial justice. It's also that it's too easy to cherry-pick statistics that make one's case while ignoring inconvenient facts.

But the statistics remain a good place, indeed perhaps the only place, to measure  Detroit's recovery from a half-century of Rust Belt ruin.

Today, let's look at two examples of what data  tell us about Detroit's recovery.

Employment gains concentrated downtown

The city’s unemployment rate has fallen to 9.3% in June from a peak of almost 25% during the Great Recession. That marks a major improvement.

And the new Jeep plant will help even more. The City of Detroit held a series of Jeep plant job fairs this summer, formally registering more than 10,000 city residents to apply for the 4,950 jobs Fiat Chrysler Automobiles said would be available. Under the city's agreement with FCA, Detroit residents will get first dibs on the jobs after laid-off UAW members who, under their contract, are at the head of the line.

Those employment stats create reason to hope. But there's a catch. For one thing, the city’s jobless rate, while better, still remains more than twice the level as the national rate of 3.7% in June and Michigan’s June rate of 4.2%.

Deba Harper of Detroit Land Bank assists Detroit residents hoping to secure autoworker jobs at Second Ebenezer Church in Detroit, Mich., Thursday, Aug 8, 2019.

So that means that even after the longest economic expansion in the nation's modern history, the best the city can do is post a jobless rate at least twice that of the state and nation. That hints at how underlying problems of poverty and poor educational attainment continue to hold back Detroit.

Moreover, it looks like almost all the gains in the city’s new jobs have come in the greater downtown area, not in the city as a whole.

Total employment in the city increased to an annual average of 226,473 in 2018, up from 208,289 in 2010. That’s a gain of about 18,000 jobs. But that could be almost entirely explained by the growth of jobs in the greater downtown, where Quicken Loans by itself now employs some 17,000 workers who weren’t here before 2010.

In Midtown, both the John D. Dingell VA Medical Center and Henry Ford Health System added jobs in recent years. Wayne State University's headcount dipped slightly, but overall employment at these major institutions is up.

Then, too, the number of Detroiters reporting themselves as “unemployed” — jobless but actively looking for work — has dropped dramatically since 2010. That's very good. But some of the drop can be explained by older workers leaving the workforce for retirement and by the city’s population continuing to decline, although at a slower rate.

Detroit residents apply for jobs at Second Ebenezer Church in Detroit, Mich., Thursday, Aug 8, 2019.

Indeed, government stats show that the total workforce in Detroit has actually shrunk since 2010. That helps explain why the jobless rate fell. More people are working, yes, but also fewer people are looking for jobs.

So how to net out a conclusion from all these numbers? It's perhaps best to say that the dramatically lower jobless rate for the city since 2010 mirrors the rest of Detroit’s recovery. It’s good news for the city, but the gains are concentrated in the greater downtown. The rest of the city's neighborhoods have a long way to go to catch up.

Housing in Detroit improved, but from where?

The housing market in Detroit tells a similar story.

Back in the grim years of the Great Recession, the average selling price for a house in Detroit was an anemic $16,430. That was only about 15% of the average statewide sale price of $106,731 in 2010.

It’s improved a lot since then. The average sale price for a Detroit house last year was $60,315, up to about a third of the statewide average of $184,447. That marks a real gain and it's a sign of better days.

And in another sign of improvement, the number of foreclosed properties auctioned each year by the Wayne County Treasurer’s Office has dropped dramatically. The most recent estimate is that 3,960 properties in the county, including 1,083 occupied structures in Detroit, will be auctioned.

That’s certainly better than the nearly 30,000 foreclosed properties at the peak of the foreclosure crisis in 2015.  

In addition, developers have been building thousands of new residential units, mostly rental apartments, in Detroit in recent years, after decades when little if any new housing came on line.

But look deeper and some worries emerge. The rising average sale price still leaves the Detroit housing market undervalued compared with the state as a whole. And while fewer foreclosures are good, there are still too many for anyone’s comfort.

And of course the vast majority of those new residential units being built are found in and around the downtown core, not in Detroit’s distressed neighborhoods. 

Detroit's mortgage market also looks weak despite recent improvements. As the Free Press has reported, traditional mortgage loans remain hard to come by in most parts of the city.

City Modern residential development is under construction in the historic Brush Park neighborhood in Detroit, photographed on Tuesday, June 25, 2019.

Data reported under the federal Home Mortgage Disclosure Act show that while the number of mortgage loans now total more than 1,000 per year in the city, up from just a couple of hundred several years ago, those loans are concentrated in a few of the more upscale districts, including Palmer Woods, the east riverfront and a few others.

In most parts of Detroit, few, if any, mortgage loans are made year in and year out. Indeed, mortgage experts estimate that perhaps 75% of all the house sales in Detroit are still made for cash or on land contracts — ways fraught with risks for buyers and that lack the protections a traditional mortgage carries.

And in a further sign of distress, census figures show that a little over half of Detroit’s households now rent rather than own. That’s a discouraging trend in a city that once boasted among the highest homeownership rates in the nation.

Income, poverty and school test scores

We could go on to other parts of Detroit's recovery, but the story remains the same. Household incomes are up but remain only about half the statewide average. Poverty rates have gone down but Detroit remains among the poorest cities in the nation. And school tests in Detroit remain distressingly low. As the Free Press has reported, the percentage of Detroit kids scoring at "proficient" math and reading levels recently stood at well under 10%, far below nationwide averages.

So, yes, we can point to upbeat stats like the better jobless rate and the rise in home prices. But dig a little deeper and we see that Detroit's recovery is robust in a few districts, modest in others, and nonexistent in the rest.

Or, in other words, we have a lot more work to do.

Contact John Gallagher:313-222-5173 or gallagher@freepress.com.Follow him on Twitter@jgallagherfreep. Read more on business and sign up for our business newsletter.