IN IMAGES – It has gone bankrupt and decrepit, but the capital of the American car is in full recovery. And now attracts investors, big and small, attracted by very low prices. A winning bet?
It was the city of the pioneers of the automobile, the one where Henry Ford launched and industrialized his famous Ford T but for years Detroit is best known for its setbacks. A descent into hell long before the upheavals that the automotive industry is experiencing. From 1.8 million inhabitants in the 1950s to 680,000, the city suffered mainly from segregation problems and a haemorrhage of its population towards the suburbs. According to official statistics, the city's population today is 82% black and 8% Hispanic.
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Symbol of the ghost town with its dilapidated infrastructure and its thousands of abandoned houses, the city had fallen to the lowest in 2013, with the resounding bankruptcy of the municipality showing a liability of 18 billion dollars. But since then, the wind has turned. Notably with the arrival of a new mayor, Mike Duggan, who has rolled up his sleeves to allow his city to do the maximum with the minimum means. On the program: road repairs, the return of public lighting and, above all, a titanic demolition program of 40,000 buildings of which 14,000 have already been completed.
The family with 100 buildings
The city has a real urban planning department headed by a respected professional, Maurice Cox, and quickly increased from 6 to 36 people (architects, landscape architects, historians) to redraw the contours of the city. A new dynamic accompanied by a decrease in crime, which had become one of the strongest in the country, and a return of the white population who is interested again in the city and settles there.
For their part, large private investors were quick to sniff the bargains. This is how two families share most of the buildings in the two central districts of the city. The businessman Dan Gilbert, owns 70% of Downtown (a hundred buildings) and has invested over $ 2 billion and plans to inject the same amount. Meanwhile, the pizza-rich Ilitch family has set their sights on Midtown, where they own buildings, clubs and sports facilities (hockey, baseball). And Ford has just announced the purchase of the monumental station of the city to work up to 5000 people after four years of work.
But Detroit does not attract that billionaires. Beyond the center where prices have already gone, there is a lot to do in this city 3.5 times larger than Paris to better accommodate the middle class. This is why an active market is developing to build but above all restore and rent houses bought at low prices. "The whole purpose of our policy is to attract new residents without losing the current ones," said Mayor Mike Duggan. And since the city has few means, it focuses on infrastructure, leaving real estate developers and investors.
Houses at $ 50,000
Enticing prospects for high yields and rounded profits that appeal to France. Thus was launched Detroit Immo, a company created by two French Antoine Demoussaud and Rudy Noulé. Together, relying on local relays, they have already bought and renovated 300 homes sold to French investors at average rates of $ 50,000 and rented by a francophone real estate agent. "This is the right moment to bet the recovery of Detroit," said Antoine Demoussaud. Purchases made sometimes to the unit but also sometimes in batches of 3 or 4 houses even several tens. "For multi-buyers who do not know the city, we really advise them to come and discover it on the spot," says Antoine Demoussaud.
Even if the transaction is accompanied by a legal service, a rental management and puts forward net returns that can exceed 10%, there are many points to watch. To everyone to make sure of the quality of the good he buys, his environment and the dynamics of the city. "The regulation vis-à-vis tenants can be very different from one state to another, warns François Gagnon, president Era Europe and Era France which is shared between France and the United States. Michigan (the state of Detroit) is a state of workers where the eviction of a bad paying tenant is more difficult than in some other state. And we must ensure that local taxes do not skyrocket or the new housing regulations, which would significantly increase the bill. "With all these elements in mind, good deals remain possible taking advantage of this period where prices remain lower than those of a "normal" market.