At its height, the city of Detroit was a manufacturing giant known mostly for automobile production. However, most Americans today will likely associate the metropolis with its abandoned buildings and financial woes, especially after a bankruptcy court approved a restructuring of the city’s $18 billion in accumulated debt in November. But despite these negative connotations, Chinese investors are reportedly taking advantage of low property prices and planning to give the Motor City the revival it desperately needs.
With home properties regularly selling for an average price of $10,000, Detroit has quickly become the fourth most popular city for housing investments in the U.S., following more traditional destinations like New York, Los Angeles and Philadelphia. The trend reportedly started after a Chinese TV report claimed that homes in Detroit cost as much as a pair of shoes. Interest in the area surged almost immediately, with potential investors expressing interest in the American education system, clean air and, of course, low prices. Many iconic buildings have already been purchased, but other investors have also taken interest in a number of abandoned factories, commercial properties and more.
Not surprisingly, city officials are treating this interest as Detroit’s potential saving grace: on Wednesday, November 19, Michigan state governor Rick Snyder embarked on a week-long trip to China to speak to potential investors, his fourth such trip since 2011. Speaking in Shanghai, Beijing and several other populous cities, Snyder stated that the city is steadily emerging from its bankruptcy and spoke at length about the business opportunities Detroit offers: for one, China is Michigan’s third-largest export market.
Snyder’s efforts could pay off. Studies show that half of China’s millionaires plan to move abroad, and the stabilizing economy in the U.S. makes Detroit an attractive option. Moreover, during a recent visit to China, President Barack Obama announced that new 10-year visas would be available specifically for Chinese immigrants, making the United States a legitimate option for those looking to move or invest outside of China. For this reason, Snyder is lobbying for an additional 50,000 special federal immigration visas to draw even more investors.
However, despite these options, it will likely take some time for these potential immigrants to organize their affairs and begin their investment plans. But even this could help the city of Detroit, since the investors will likely choose to hire property management firms, which help property owners run residential and commercial buildings. These companies have proven themselves useful to a number of ventures in the past, with some experienced property managers even able to reduce energy bills by 50% through simple, low cost upgrades. By hiring property management companies, the new investors will immediately begin creating jobs and opportunities in Detroit, possibly kick-starting a revival before the new residents themselves even arrive. With changes like these seemingly in motion, will Detroit rise again? Only time will tell.
