The latest rush to buy up impoverished Detroit is proving to be stranger than fiction — and not all bad.
For our parents, the idea that Chinese investors might one day be buying up all of Detroit would seem absolutely bizarre – almost as absurd as the dystopian nightmare vision of the Motor City portrayed in the “Robocop” films. Yet in this crazy, interconnected, globalized world of ours, you might yet see a cyborg super cop patrolling the streets of old Detroit, because the Chinese are indeed plunking down cold, hard cash for vast stretches of Detroit’s ruined cityscape.
According to reports by local real estate brokers, their phones are ringing off the hook with wild-eyed speculators from mainland China eager to buy up as much property as they can before Detroit’s economic malaise – the joke’s on them – comes to an end. Speculators, reports one broker, are calling up saying they want to buy “100 to 200 properties,” sight unseen. “I don’t have to see them,” said one customer over the phone, “Just pick the good ones.”
Since the announcement of Detroit’s bankruptcy this past June, stories about the city have been making the rounds on Chinese discussion boards, who apparently find in the bankruptcy an exciting opportunity. For the Chinese, who face an expensive, corrupt housing market ruled by predatory local governments and unscrupulous developers, news that properties could be snapped up for the prices of a pair of shoes has spread like wildfire. As one Chinese netizen recently quipped online, “Seven-hundred thousand people, quiet, clean, no air pollution, democracy – what are you waiting for?”
“I’d buy that for a dollar!”
What, indeed. For Chinese buyers used to a treacherous housing market where property rights are respected as far as the next developer’s bribe to a local official, Detroit’s drawbacks must seem quaint. Even Detroit’s fearsome crime rate is not a deterrent. Given that hundreds of thousands of Chinese citizens routinely travel to some of the worst places in the world to work on construction projects for Chinese companies, the idea that many are now proud owners of housing stock right in the middle of Detroit’s shooting gallery may even seem charming.
Or at least it does until they actually see what Detroit has on offer. Michigan brokers who have actually met with the few Chinese who have shown up at the city airport eager to see Detroit’s ramshackle remains say they get out of Dodge – or at least Detroit – as quick as they can. “Once they see the scary area,” says one broker, “they give up.”
Tragicomic as this story is – after all, if not even the Chinese, who readily work and invest in Congo or Angola, are upbeat about Detroit, what hope does the city have? – it is nonetheless a telling reminder that foreigners often see the “worst” places in America as places of opportunity long after most Americans have abandoned them. It is also a reminder that globalization is a two-way street that often provides benefits to the United States in addition to costs.
True, globalization has savaged old-line industrial sectors in the U.S., reduced the power of organized labor, depressed U.S. wages, contributed to growing economic inequality and enthroned transnational finance in the seats of power all around the world, but it has also brought benefits, too. Foreign investors like these Chinese speculators, for instance, sink their wealth into American assets – even decrepit houses lining Detroit’s 8 Mile Road – because U.S. institutions like the democracy and the rule of law the Chinese blogger above pointed out are valuable things attractive to those seeking to park their money in a safe place.
A vote of confidence
This confidence in U.S. financial and economic institutions makes our collective borrowing costs lower and, in theory, helps spur economic growth as consumers, businesses, and governments borrow and spend on everything from cars and computers to clothes and carriers. Sometimes this ease in borrowing leads to profligacy and waste – see the housing bubble and wars fought on a credit card – but it also makes it much easier for entrepreneurs to start a business or for the local school board to issue a bond note in order to construct a new school.
Likewise, even though social mobility in the United State has fallen behind that of Europe, it is still much higher than in many other societies where barriers of gender, race, ethnicity, religion, and class still remain important obstacles to success. That this is the case can be seen in the waves of immigrants that still come to the United States even in the darkest of economic times.
Guatemalans. Indians. Laotians. Nigerians. Egyptians. They come by the tens of thousands and in so doing enrich receiving communities with their hard work, money, culture and children – the last being the most important vote of confidence one could possibly make in another society. While the impact immigrants have is obvious in places like New York City, Chicago, Houston or Los Angeles, it is actually in America’s struggling small towns and rural areas – where skepticism to the benefits of globalization run deepest – where their impact often does the most good.
In Iowa, for instance, immigrants to small towns stabilize aging, shrinking populations that have been losing young people to urban areas for generations. The influx of newcomers enlivens the local retail sector, supports community banks, expands employment and, in the opinion of most local experts and decision-makers, “rescues” their small towns from financial and demographic extinction. What is true in Iowa is true elsewhere in America, and despite complaints by know-nothing nativists, even the lowliest immigrants — let alone the sea of engineers, scientists, and doctors that come to our shores — contribute mightily to America’s overall wellbeing.
Who’s exploiting who?
Indeed, our current president is a product of this mixing and mashing of cultures caused by globalization. While this may be an uncomfortable fact to those frightened of change, President Obama’s unique heritage and background nonetheless give him, and us, a greater insight into the complicated, complex world our country exists in. Having such a cosmopolitan president, despite his faults, is clearly superior to having one steeped in a parochial ignorance that hides from the world instead of embracing it.
So take cheer. America may be stuck in a deep economic rut and be fighting complex, endless wars in the Middle East, but things can’t be all that bad if gullible, money-mad speculators from abroad think buying up collapsing houses in Detroit is their ticket to easy street. There are things here that people from other lands find valuable and they risk a lot to come here to get it. Who knows, maybe next some enterprising American will entice the Chinese with beachfront property in Arizona or part-ownership in the Brooklyn Bridge. It could happen – so long as no one looks too closely at the details.