Case in point: Detroit.
Smith points out the significant level of investment Gilbert has made in downtown Detroit since 2010: The founder of Quicken Loans has purchased nearly 60 structures and moved more than 12,000 employees into the city's core.
Then, Smith continues, there are Detroit's other billionaires.
By contrast, much of southwest Detroit is owned by Matty Moroun, best known for being the only person to own a major American border crossing, and most of downtown north of Adams Street is owned by Mike Ilitch. Ilitch, who made his fortune founding the Little Caesars Pizza chain, operates in a manner that is more old-fashioned slumlord. Ilitch buys property, often secretly, and lets it decay, so that it brings down the value of the property around it. Then he buys the neighboring property, and lets it run down too, so that he can buy even more property, until he’s amassed enough blighted property to go for the end stage.
The end stage is persuading the city to put up enough funding so that he can raze the entire area and put in the kind of flagship property — most recently, a new Red Wings stadium surrounded by market-rate housing and retail — that shakes down the big redevelopment dollars. When I arrive, the 45 blocks that have been cleared for the new project, called District Detroit, is an impossibly long stretch of rubble, with a billboard hovering over it. “Imagine,” the billboard says, “a place.”
That, Smith writes, is why Detroit loves what Gilbert has done. But, while Gilbert might have invested heavily in Detroit (with the potential to make enormous profits), his company and other banks in the area haven't. More from Smith:
I talked to one Detroit resident who had loaned $20,000 to a friend who had bought a house, but couldn’t carry out the renovations the house needed. Now the friend was moving, and he was trying to buy the house he’d helped rehab — but he had just been turned down for a loan to do so by Quicken. Building a house on farmland at the edge of the suburbs is still considered a safer bet than building or rehabbing a building within Detroit’s borders.
Smith transitions by noting the recent dialogue shift in recent years on the growing income inequality in the United States; "the wealthiest 1 percent of Americans receive 20 percent of the income earned across the country," she says.
What does this mean for cities like Detroit?
The impact of that shift has ushered in a wave of philanthropic-minded individuals who, Smith says, "can shift policy winds in any realm that interest them with the sheer force of their jingling moneybags." Consider Detroit's so-called "grand bargain" and the (mostly) privately-funded M-1 Rail system, and re-read that line.
Smith concludes that Detroit "deserves more than to lie in wait like some kind of fairytale princess for a real estate tycoon to come along and spruce her up." However, she continues, "until someone other than a Dan Gilbert can afford to buy and fix up buildings that are down on their luck, that seems to be the way the game is played."
