Archive for the 'poverty' Category



The abandoned house of the week

07150802_16.jpg

Holidays in Detroit and the downside of home ownership

12280901_04.jpg

The winter months in Michigan can be, and usually are, rather dreary. During our annual holiday visit to metro Detroit, along with the usual lack of sunshine, we had experienced the joy of pouring rain on Christmas day. Fun. Of course many can get used to such weather, and some will even claim to like it. For some reason many Michiganders complain all winter about snow.  Some even claim to prefer cold, damp weather to dry, cold weather. Many say, “well, at least it’s not snow!”, whenever it rains. Because soaking wet and cold is apparently so much better. Besides, snow is the only thing that covers up the brown grass, bushes, trees, and all of the mud that we get to experience a good four, or more, months of the year. But, if someone claims to like it, who am I to judge. Whatever makes you happy…

On the plus side, we enjoyed the usual things during our visit to metro Detroit. We spent time with family for holiday brunches, lunches, and dinners, as well as at a memorial for my grandmother who had recently passed away at the age of 98. We ate and drank at some of our favorite metro area restaurants and bars, and caught up with Friends. We also got to enjoy a Red Wing’s game, as we watched Detroit beat the Colorado Avalanche.

02070803_05.jpg

In the weeks leading up to our trip back to Detroit, we scheduled some drywall work to be done prior to our arrival. Over the eight years we’ve owned the home we’ve gutted the bathroom and kitchen. And by gutting, I mean we ripped out absolutely everything. In the bathroom we had to stand on floor joists as we laid new sub-flooring. In the kitchen we spent days ripping out old underlayment covered with nasty, worn out linoleum made to look like bricks. In both rooms everything went. The bathroom got a new cast iron tub, all new plumbing, ceramic floors and tub surround, as well as new insulation and drywall. The kitchen received all new cabinets, appliances (other than the fridge), and new oak, hardwood flooring. We also replaced insulation and drywall in two bedrooms, refinished all of the old, existing hardwood floors, as well as the new kitchen flooring, after ripping out disgusting, rental house carpeting. We patched holes in the foundation leftover from the cement forms. All of this was done by us, with the rare helping hand of a professional plumber or electrician. The only thing we didn’t play a major role in installing was the new furnace and air conditioners.

frosty_freeze.jpg

We did as much as possible ourselves because we didn’t want to take out a loan on our house. We didn’t believe that borrowing to fix up our rather modest ranch house was a smart move. Instead invested a lot of sweet equity, saved money in envelopes, and always paid all bills in full. The only exception was the twelve months, same as cash, credit card Ikea gave us. We did take advantage of a free year long loan. Of course we paid this off in full before the deadline. We had also purchased a house we could afford, even on one income should one of us lose our jobs. And this happened shortly after buying the house. My wife’s company was purchased by good ole’ Barry Diller, and was promptly laid off. I quit my job a few years later to try my hand at self-employment. We never had to stretch to afford the house. We were never house poor. We even paid extra on the measly $666 dollar mortgage each month in a effort to pay down the principal.

brush_park_1.jpg

While we did see hardship coming to the metro Detroit area, we didn’t have the renovations finished soon enough to sell when we new we should. And while we saw the writing on the wall, we certainly didn’t know it would get as bad as it did. Upon arriving home we worked hard on finishing the basement on our house, not really knowing the extent of the value lost in the previous six months. Sure we new it had lost value, but all told, it’s probably down 40% or more from it’s peak value. We were told by our real estate agent that we really needed to finish the basement, and so we were intent on it…until we realized what kind of shape we were in. Instead of throwing good money after bad, we began to think in terms of damage control. We may as well burn a pile of money on the driveway. Or perhaps put a pile of money on the driveway. At least that would generate some interest in the place.

Now I constantly read articles like:

Underwater Mortgages Hit 11.3 Million

Strategic Defaults

Debtor’s Dilemma: Pay the Mortgage or Walk Away

Strategic Non-Foreclosure Becomes Official Policy

Freddie Mac: “Potential Large Wave of Foreclosures”

brush_park_2.jpg

After learning that we were hopelessly under water, we dropped all tools and stopped work on the house. Strategic default, the new term for walking away even though you’re currently good on your payments, became a very appealing thought. We moved for work, and we can’t, and don’t want to, go back. Two years of paying the mortgage on even a cheap house (that we don’t live in) is a huge amount of money that is not saved for retirement (not that I ever expect to actually retire), or for the unthinkable potential need for a future debilitating illness, or for other future needs.  The money becomes locked away, in a sense, prevented from being used for more useful in the economy. Even though we bought way less than we could afford, never borrowed against it, and did all renovations ourselves, we are still faced with the possibility of owing $30,000, if we can even sell the house. This is perfectly plausible scenario even though we did everything “right”. And now the mortgage and banking industry wants me to think of my legal obligation as a moral obligation. The legal documents say it all. They state in the terms what we owe, what the collateral is, and what happens if we fail to pay. There’s no mention of heaven or hell, good or bad, right or wrong…only terms of agreement, and potential penalties should one side fail to uphold their end of the bargain.

brush_park_3.jpg

I don’t like the idea of walking away, and we’re doing what we can to avoid it. But at some point we need to, once again start saving the large sums of money needed for our future. The longer we hold off, the worse it becomes. Even the moral compass in my head is weak compared with pending problems of a future with too little saved. Which potential scenario is worse? The one were we walk away from a legal obligation with a bank? Or the moral obligation were we fail to take care of ourselves and our families, without relying on public handouts?

Who understands how Detroit needs to change?

01200602_09.jpg

After living and working for the past two years in D.C., and Denver, Colorado, coming back to the Detroit area is a real eye opener. What was once a maddening and frustrating place to live is now just plain depressing. With the real unemployment rate estimated to be near 20% for the state, and a ridiculously high 50% for the city of Detroit, still falling real estate values (down 40% in my area, and including our house), a crumbling infrastructure, financially strapped municipalities and school districts, and a apparent 50% commercial vacancy rate (just judging by what I can see..), the metro area seems to continually worsen. Each time I come back it seems that things couldn’t get worse (even though I don’t believe the area’s hit bottom yet), yet it always does.

Living in the area, one becomes accustomed to things residents in most other areas would never imagine. Roads that get complaints in other areas, metro Detroiters can only dream about. The public transit that others complain about being crowded or expensive, doesn’t even exist here. Same with the practically non-existent bike lanes. In Denver I ride my bike everywhere, only getting in the car to make longer distance trips. It’s something that I found to be unacceptably difficult here in southeastern Michigan. When I did make a trip by bicycle here, I was that strange person riding their bike on the road carrying grocery bags; presumably some poor sap who’d had his license taken away, or who didn’t have enough money for a car. In Denver, I’m just one of many using a bicycle for, believe it or not, transportation. Imagine that… Our neighbor here in metro Detroit would drive one block to buy cigarettes.

02050401_12.jpg

Driving around metro Detroit, it’s rare to see more than one or two people out getting exercise of any kind. In Denver it would be rare to see less than a dozen people exercising on my two mile ride to work. The weekly Wednesday night cruiser ride in Denver attracted up to 850 riders on a single night this past summer. Of course one has considering how many other options there are for socializing, entertainment, and outdoor activities. On any given week there will be rides, runs, creative Meetups, art openings, and just about anything else an active person under the age of 95 might enjoy. I know some of these things exist in metro Detroit, but the often long distance between them isn’t just inconvenient, but a huge waste of time, and dangerous when you consider all of the different highways one would have to travel to get from, say, Royal Oak to Ann Arbor on a weekday evening.

I have a point, beyond yet one more rant about the area. And the point is this: does anyone, who hasn’t left, or doesn’t want to leave, understand what needs to change about the metro area? Everyone knows that Michigan needs jobs. But I get the feeling that many who remain believe that those who left were weak, or quitters, or don’t like hard work. Those “quitters” who left the state, left because they had other opportunities…better opportunities, and most likely a chance at a better lifestyle. They didn’t leave because they weren’t up for a challenge. If an area offers jobs, and “opportunities” rooted in the past, and another area is embracing the future, why would I choose that challenge? If you can be on a better team, who wouldn’t choose it? Sure, some would rather be a big fish in a small pond, but this particular pond keeps getting smaller, and dirtier.

The point is often made that the area needs to bring back manufacturing jobs. I wouldn’t argue that manufacturing jobs…heck any jobs, would be good for the area. But maybe what the area really needs is to face reality. Metro Detroiters need to adapt to changing times. An education may be a good place for many to start. The claim is often made that metro Detroiters are scrappy, gritty, and hard working survivors. What mid-west city doesn’t believe that? The question is, what do survivors do when there old way of doing things doesn’t work anymore? They change their way of doing things. What did metro Detroit do when it was obvious the ways of the past were going to end soon? Nothing. Detroit made pretty much all of the same mistakes Pittsburgh has made, but unfortunately, unlike Pittsburgh, Detroit’s had very little of the fortuitous investments in other industries.

The question that should be asked, that often isn’t, is why have our young and highly educated citizens been leaving for decades? If the question was asked of every one of them, that has left the state, one would get a variety of answers from jobs to lifestyle. If you were to ask what it would take to get them to come back to metro Detroit, the answers would be equally varied, but I doubt many want to come back for traditional manufacturing jobs. Nor did many of them leave because of a lack of traditional manufacturing jobs. As a friend said the other night, “the state is a storefront. Why would anyone want to come in?”

01200602_03.jpg

When time Magazine offered advertising space for a campaign designed to draw this very demographic to southeastern Michigan, they asked five large agencies to answer the question, “If I’m young, talented and creative, and open to all kinds of opportunities, why Detroit?” Take a look at the ads… My personal opinion is that these ads do a better job of answering, “if I’m young, talented and creative, and open to all kinds of opportunities, why leave Detroit?” The ads do a great job of pointing out the disconnect that exists between those who have lived here a long time, and made lots of money here, and those of a younger more mobile generation. Outside of the suburbs of Detroit, who cares about Kid Rock? It really makes me wonder, if these people even understand what types of music the target demographic listens to? I can tell you, it’s not Kid Rock. Not a single one touched on any compelling reason for someone from outside of the area, to relocated here. Why are we even asking the old guard how to attract a new generation of creative, enthusiastic, and highly motivated entrepreneurs and creatives? L. Brooks Patterson still wants to stake metro Detroit’s future on the widening of I-75 from 8 Mile to M-59. MDOT and SEMCOG still seem to believe all transportation should be done in an automobile. No bikes, no trains, no walking…again that’s for the Third World poor, such as those in New York, Chicago, Atlanta, San Francisco, Portland, Denver, London, Brussels, and Toronto.

The morning after I arrived back in metro Detroit, we watched part of a round-table discussion on a local news show. The topic was, of course, about the area’s future. It appeared that not one of the participants was under the age of 60. Not that those over 60 have nothing to contribute. But asking only those who lived through a very different time period how we should proceed into the future misses the point entirely. We are in this situation because we (they) thought that what worked in the past would surely work in the future. If it was good enough then, it’s good enough now. Needless to say, watching did not make me feel very encouraged about the future of metro Detroit. Does anybody here, in any leadership position, with any power, or with money, get it yet? Do they understand the real issues? Do they know what it’s going to take to bring people back, or to make them stay?

Updated Map of Abandonment


View Detroit Photos in a larger map

Prayer Mission Baptist Church

06150202_07.jpg

When the wall to your church collapses onto the sidewalk and street, there’s no need to stop holding services. With a pile of bricks and an i-beam laying across the sidewalk and into the street, the name of the church, the pastor, and the service schedule was simply painted on a once interior wall. As singing and sounds of “praise God…” blared from speakers of a church across the street, pedestrians walking along the sidewalk either climbed over the pile or walked into the street without so much as a pause to consider the somewhat strange  situation. It is a testament to what can be considered “normal” in the city of Detroit.

Updated Map of Abandonment


View Detroit Photos in a larger map

The Abandoned House of the Week

07200903_17.jpg

The entire area in which this house is located has been abandoned. Cement barricades block several of the streets, and large weeds, bushes, and even trees are growing through cracks in the pavement. Over the years I’ve visited this area many times, and have been chased by a pack of stray dogs, and had to drive around 20 foot high piles of toilets, and sinks. This time the overgrowth, mainly the tree of heaven (aka. ghetto palm), was almost completely obscuring several of the houses, and the grass was chest high.

Only a short distance away cars rushing from the suburbs to the city, and back again, pass by continuously. From the sunken Lodge Freeway, it’s almost easy to ignore the devestation, as often only the burned out rooftops are visible from the driver’s vantage point. This section of the city borders Highland Park, and has been particularly hard hit by population loss, unemployment, and abandonment.

Health care can’t save Michigan, or I told you so part 3…Michigan’s future, and some photos

lowry.jpg

In May of 2008, I read an article regarding the expansion of the area’s hospitals, and the growth of the health care industry in general.  At the same time, I also wrote about how I had viewed this as a potential problem for a long time. The idea, at the time, seemed to be that Michigan’s, and in particular, metro Detroit’s, economy could be saved by health care. And, so the growth of the local hospitals could put more people to work. Former automotive employees could be retrained to work in the health care industry. Best of all, the health care industry was largely immune to the ups and downs of the economy. People always need health care! And with our aging population, we’d have an ever increasing supply of patients.

What wasn’t often mentioned was that Michigan, and again, metro Detroit in particular, was losing population at the same time that the hospitals were expanding. The problem with the health care as savior plan, was no different than the belief that the housing market, or the commercial real estate markets would keep growing despite a declining population. From my conversations with industry “experts” and from reading and watching the local news, it was obvious that many people, whom I had generally assumed knew more than me, couldn’t imagine a Michigan any different from the one they were living in in 2005 or so. The real estate markets were booming, the health care industry was booming, and the Big Three seemed to be doing not to terribly bad (other than maybe Ford). If one only looked at the surface, things may have looked so-so in Michigan, but if you were to have looked a little deeper, things looked like they were going to become downright horrible. The population had been stagnant or declining for a while. Michigan was one of the few states in recent history with this distinction. We were far too heavily dependent on an ailing industry with a broken business model, whose employee’s pay rate was not based off of market forces in any way, and whose management teams couldn’t seem to see past the ends of their noses, or a least past the next quarterly profit report. And we kept on building, and moving further from Detroit, using used tax payer money to help build infrastructure for new developments, while our old infrastructure crumbled. It angered at least a few of us, that no one seemed to be able to (or at least didn’t want to) see that a declining population whose economy was based on one broken and declining industry, and whose current investments were being made on new, and largely unneeded infrastructure, was doomed to failure, and soon.

In my business, when I asked questions about the, seemingly huge, number of new housing developments being built in the middle of nowhere, I was constantly told things like,  “our projections show that we can build like this indefinitely”, and “as fast as we build them, people buy them”. Were are these people coming from, I would ask. The answer was usually something like, “a lot come from Detroit, or from older suburbs”. Apparently, no one thought to follow this logic to the end of the line. If Detroit has been losing population for 40 years, and people move from Detroit to Dexter, who is buying the house in Detroit so that the purchase in Dexter can be made? People were buying houses in Detroit at the time, but obviously less than were leaving Detroit. The problem was simple. You can not expand the number of houses if the number of people is going down, with out driving prices down. But what was such an obvious sign of trouble at the time, is that prices were rising, and people were sure they would keep rising.

502154824_44405dc3cd_o.jpg

So Michigan had a declining population, dependent on a downsizing industry with a broken business model, that had already been laying off large numbers of employees for years, an over saturated residential and commercial real estate market, and of course a largely under educated work force. But, we need not fear because the health care industry was going to save us. We’d all become doctors, nurses, assistants, or administrators, and we could just all be at the hospital all the time, either taking care of someone, or being taken care of by someone else. It’s the logic that seemed to be used by the Big Three for a while. For quite some time, almost all television advertising was directed toward their own employees. Who advertises to themselves? I’ll pay you, and you can then give it back to me in exchange for the thing you just made, that I paid you for. Maybe if we just make a chain letter, and send it to all of our friends, we can all get rich!

Unfortunately, a market based economy requires more than one or two industries to work. And so, it was always obvious, that unless something fundamental changed in Michigan, that we couldn’t depend on the health care industry to save us. As it turns out, the health care industry isn’t immune to downturns in the economy after all. It should have been obvious all along. If you are out of a job, or have no insurance, do you put off medical care and procedures? Of course. And if there are less people in the state, are there less potential patients? Of course. Michigan, like any other state, can’t depend on any one industry to keep the economic engine running. It takes a progressive, and diversified economy to be successful. No one knows for sure what the next big industry will be. Who predicted Google? At the time, most people thought search engines couldn’t possibly make money, and yet online advertising, has been a growth industry for years. Trying to create a plan for the future, based on the past, is unlikely to work. Sure the past holds lessons to learn from, but the future remains unknown. What Michigan needs to do is to put a priority on education, entrepreneurship, and quality of life. Of course Michigan’s broke, so it’ll be very difficult for the government to do what is needed, but the real change needs to come from the citizens who live there. If Michigan becomes a holdout of stodgy, grumpy, and angry citizens, that resists any change at all costs, then the downhill slide will continue for decades more. But if the cheap living can attract a new younger and more progressive generation, then Michigan may have a chance.

A lesson in free speech, blah, blah, something, something, and some photos of Detroit

07160903_15.jpg

After a week of listening to crazy political, economic, and social theories, beliefs, and comments, I felt the need to vent. Unfortunately I wrote way too much, so I’ll only post a little bit at a time. I hope not to come off as preaching from a soap box, but rather presenting information that seems to be too often misunderstood.

Having a discussion about politics is similar to a discussion about religion. It takes the right combination of individuals to have a civil discussion (as evidenced by our recent national political screaming matches…err, I mean discussions). Unfortunately, bringing reason and facts to a political discussion is about as welcome and useful as it is in most religious ones. That is to say, facts and reasoned arguments are not very welcome at all. It’s too bad, as a debate of political, economic, and social theory is a good thing. Yet it seems to be almost impossible to have. If you are going to disagree, at least get your facts and statistics straight. As Mark Twain said, “Facts, or what a man believes to be facts, are always delightful - Get your facts first, and then you can distort ‘em as much as you please.” That way if you want to make stuff up, at least you’ll be less likely to come off as part of the lunatic fringe.

The first topic in which it was obvious many of the participants of the “discussions” didn’t have much of an understanding is:

Free speech, and the protection of it under the First Amendment of the Constitution

From the Constitution: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”

Note, you do not have a protection from corporations, private businesses, or individuals. Therefore if someone in the press criticizes what you have said, or suggests you shouldn’t have said it, your right to free speech has not been violated. If an online forum deletes your idiotic (or thoughtful) comment, your right to free speech has not been violated. If someone tells you to “shut up,” your right to free speech has not been violated. Furthermore, there is a whole host of instances in which, the amendment has been interpreted to allow for the restriction of the individuals right to free speech by the federal government (judicial activism has a long history, knows no political boundaries). Of course this is a very limited presentation on your first amendment protections. It is only meant to explain your right, or lack thereof, as it pertains to the, apparently, very common misconception that you are granted the right to free speech in every domain.

09150401_17.jpg

And here’s the blah, blah, something, something part:

There’s been a claim that the the federal government can’t do anything right (no pun intended). That they’ll obviously bungle anything they do, other than, depending on your point of view, highways, defense, social security, sewers, water, and electricity. In direct opposition of the first statement is a second one. The second statement often used in conjunction with the first says, that the federal government shouldn’t be involved in health care because they’ll drive the private businesses out of business due to a lower operating cost. Well, which is it? It can’t be both. Is the government more efficient…or less?

Don Tapscott provides a good argument in favor of my long held desire to clean house at the Big Three, in a “Crisis of leadership.”

At least we’re not Texas. Does anyone other than a Texan like Texas?

This poor woman decides to leave Detroit after 60 years, and get berated by idiots in the comments. What the hell? Can’t people can’t just say, “good luck.” Or how about, don’t say anything? Really, we’d all appreciate it.