Live-Work Programs Can Boost Economic Development

Midtown is Detroit’s fastest developing neighborhood. With stability from Wayne State, the Detroit Medical Center and Henry Ford Health System, the two-square-mile community has a daytime population exceeding 50,000, according to a 2010 report (so the number is likely much higher today).

MML Case Study: Live Midtown

Live Midtown

Midtown Detroit Inc. is on Woodward, next door to new business Great Lakes Coffee.

In 2011, these three institutions and nonprofit Midtown Detroit Inc. started a live-where-you-work incentive program. The initiative has helped catalyze local developments and boosted the area’s economic growth. MML’s recent case study, Live Midtowndetails the program, but basically, eligible WSU, DMC and HFHS employees relocating to the neighborhood can apply for a forgivable loan of $20,000 towards the purchase of their home and relocating renters can apply for up to a $2,500 allowance toward rent. The program also offers financial incentives to employees already living in the district to improve their home or renew their lease.

From when Live Midtown started in 2011 through the end of 2013, 913 employees have taken advantage of the incentive, including 71 new buyers and 466 new renters. In just a few years, Live Midtown has helped spark new developments and economic stability throughout the community. For example:

  • Since 2010, median residential sale prices in Midtown increased from about $140,000 to $195,000, while the city’s median sale price has remained at about $50,000.
  • Forty new businesses opened in Midtown since November 2012.
  • Since 2011, there have been more than 20 new construction or renovation housing and mixed-use developments in the pipeline.

Spending $3 million so far in direct subsidies, obviously the scope of Live Midtown is out of reach for many Michigan cities. However, there are great lessons even the smallest communities can learn if they want to encourage local employees to live where they work:

  • Focus live-work incentives in a carefully picked, small area
  • Collaborate with great partners
  • Listen to the public

Focus live-work incentives in a carefully picked, small area

la-feria

2012 Hatch Detroit winner La Feria is on Cass next-door to new business Tota: Thrift on the Ave.

Part of what made Live Midtown such a success is that there are already great placemaking activities happening in Midtown. For example, Hatch Detroit recently helped Elias Khalil open Spanish tapas restaurant La Feria and Green Garage’s Green Alley project helped improve Midtown’s walkability.

Focusing a live-work incentive program within a district that’s already getting some attention is a great way to maximize impacts and strengthen partnerships. A 2012 Environmental Protection Agency report showed that “compact, diverse, and walkable development,” like initiatives in Midtown, can increase property values, encourage residential and commercial development, and improve quality of life for residents. Combining efforts can strengthen and speed programs’ impacts.

Collaborate with great partners

Old Main - Live Midtown

Live Midtown partner Wayne State University’s Old Main building on Cass Avenue.

Midtown is lucky to have such large institutions as Wayne State, the DMC, and HFHS; they’re obvious collaborators for the incentive program. However, communities need to think creatively about who should be at the table. Do small business owners live in the community? Is there a community college nearby? Is there a growing art scene stakeholders can take advantage of?

An Atlantic article emphasizes the importance of public, private and nonprofit partnerships in economic development. If local businesses aren’t doing their part to invest in their community, local leaders can and should organize a collaboration.

Detroit has a strong history of creative, grassroots placemaking and a recent article the League wrote for a UK-based magazine highlights some of these creative partnerships. The key takeaway is that local governments don’t have to take the lead on these projects; a supportive role is sometimes more effective.

Listen to the public

Many Live Midtown participants are young professionals, who are known to be solely interested in renting. When the program started, organizers made sure to pick boundaries that would accommodate these interests.  The growing number of young people moving into Midtown has helped attract new rental and mixed-use developments.

Live Midtown organizers recently saw a growing interest for single-family purchases. Collaborators decided to expand the incentive’s boundaries north to Detroit’s Boston Edison neighborhood, full of historic, single-family homes. Although expanding program boundaries wasn’t part of the original plan, organizers acted on the interests of program participants.

On the more controversial side of engagement, that dirty G-Word comes into play … Gentrification. Recent discussions about displacing low-income residents in Detroit’s Midtown and Downtown communities are being brought into the forefront. Live Midtown organizers will likely have to initiate greater engagement strategies to determine the best course moving forward.

Live-work incentives are particularly top-down placemaking approaches, which can lead to implementation challenges and controversies. Communities should engage the public throughout program development and implementation to help reduce conflict, improve trust and lead a more impactful program.

LIve Midtown

The Auburn has loft-style apartments above retail and restaurants.

As a Midtown resident myself, I love watching every block grow and change. The abundance of new restaurants, shops, and community events help me stay in the city and improve my quality of life. Although I’m not directly benefited by Live Midtown’s incentives, I’m experiencing the program’s impact, which has been incredible positive to my community.


Interesting articles and reports mentioned in this post:

Looking for more great articles related to this topic? Feel free to contact me with a request and I can help you come up with some stats, talking points, or research to share with your community.

Sarah Craft is an Information & Policy Research Program Coordinator at the Michigan Municipal League. She can be reached at 734-669-6328 or scraft@mml.org.