Start-Up Detroit: How the Tech Revitalization Deepens Inequalities

Silicon Valley and tech start-ups across the country like to portray themselves as savvy social entrepreneurs – whiz kids who use simple, data-based technologies to fix deeply entrenched social problems. They are partnering with local governments to make our cities “smart” and “open”, promoting efficiency in energy management, water use, or transportation, and putting city data online. But in the rush to modernize, the new generation of tech enthusiasts often neglect the complexities of urban communities, the tangled histories of racial discrimination and deep-seated socioeconomic divides. This May, Hbs Fellow Shilpa Jindia traveled to Detroit, America’s poster child for urban decay and public mismanagement, where a fledgling company called Loveland Technologies set its sights on alleviating the city’s foreclosure crisis with open data. Through discussions with local residents, activists, and experts, she explored how Loveland’s digital map of available foreclosure properties inadvertently advertised bargain-priced real estate to speculators eager to redevelop the city’s residential neighborhoods. Instead of providing a quick fix for the city’s ills, the company’s apolitical approach, like that of so many other well-intentioned tech initiatives, has reinforced decades of racial and socioeconomic discrimination. 

Loveland’s Promise

By early 2013, Detroit seemed beyond repair. The 2008 financial crisis had dealt the city a critical blow, with the controversial bailout of its once titanic automotive industry and the declaration of the largest municipal bankruptcy in US history. The unemployment rate sat at 22 percent and fewer than 20,000 people still even worked in manufacturing, in what was once America’s industrial heartland. The city’s population had dwindled to 700,000, from a peak of two million, over 80% of them African-American. Decades of neglect and deindustrialization had scarred the sprawling city with crumbling, abandoned buildings, from houses to factories and train stations, in one of the most striking examples of white flight and de facto segregation in the country.

Detroit’s shrunken city population lived clustered in neighborhoods surrounded by and threaded with this eroding infrastructure. Paralyzed by the financial crisis, the chronically dysfunctional city government struggled to attend to the city’s blight, let alone to provide basic public services. For longtime Detroiters, such neglect was nothing new. A long history of ambitious urban renewal plans had failed to dent Detroit’s continuous decline. Among the many civil society groups and entrepreneurial initiatives that sprang up to fill in the city’s service gaps, Loveland Technologies quickly became a major player. 

Detroit has become known for pictures of abandoned buildings and other urban blight.
Loveland founder and Silicon-Valley transplant Jerry Paffendorf believed that “underlying every other crisis in the city was an information crisis.” In response, Loveland began digitally mapping properties sold through Wayne County’s tax foreclosure auction in 2011, in an effort to make property ownership data publicly accessible (Detroit is the largest city in Wayne County). The company announced that its “community missions include arming people with information to battle a plague of tax foreclosures and running an ongoing survey of property conditions to help fight blight.” While Loveland’s business aim was to put “America online parcel by parcel,” its mission implied that the company cared about keeping homeowners in their homes and mitigating the effects of Detroit’s housing crisis.

The company’s website, “Why Don’t We Own This?”, quickly gained national attention. By 2013, the year of Detroit’s bankruptcy, Loveland was tapped by the Blight Removal Task Force, a White House initiative, to send a team of surveyors that included fellow tech group Data Driven Detroit to map all 380,000 parcels in the city—a project that became known as Motor City Mapping. Loveland created an app for team members to “blext” (blight + text) property conditions, allowing them to collect data far more quickly and efficiently than the city could. The app was later made public, with the goal of sharing data with “government agencies, neighborhood organizations, contractors, and more who seek to address issues such as blight and illegal dumping, as well as to help people in difficult situations, identify community assets, and investment opportunities.”

Loveland’s unprecedented data visualization tool provided a comprehensive picture of Detroit’s blight crisis that had previously eluded its scattered residents. It allowed isolated neighborhoods and communities to feel connected to each other and gave city officials agile, real-time access to local information. The company’s data-focused approach also attracted enormous local and national media coverage, with rare, positive coverage for the “failed” city. Boston’s WBUR admired the app’s agile ability to give Detroit’s city government “‘x-ray’ glasses on its troubled properties,” and experts across the country heralded its potential to jumpstart the city’s tech revival. Fast Company named Loveland one of the world’s top 10 local companies in 2014, only two spots below the top contender, Yelp. Building on its success, Loveland soon expanded operations to other cities. 

A healthy dose of data,  it seemed, was the simple cure Detroit had been waiting for. Yet for many of Detroit’s longtime residents, the result was a far cry from Loveland’s rosy image and pink-heart logo.

Putting Detroit Up for Sale

Instead of empowering hard-hit Detroiters to buy back local property, the company’s online data of available foreclosure properties inadvertently put a glossy for-sale sign over an already poor, struggling city.

Under the current foreclosure system, Wayne County auctions off properties after three years of unpaid taxes. Properties not sold in the first round are auctioned a second time for a mere $500 plus the last six months of owed tax. Owner-occupants (anyone who lives in the house he or she owns) are barred from buying back their own home. Josh Akers, an assistant professor at the University of Michigan-Dearborn who has studied Detroit’s housing crisis, told me that while the auction system was perhaps intended as a “triage response” to the housing crisis, it instead fostered speculative real estate. Wealthy and notorious property barons in the city used the system to strategically buy swaths of properties in areas they intended to develop commercially. Through commercial loopholes, some of these property barons used the foreclosure system as a form of “tax-washing”, buying back properties on which they had failed to pay taxes for bargain rates.

As Akers and fellow academic John Patrick Leary reported, “only 24 buyers accounted for one-third of all property purchases…and half of all the property sold over the decade went to 84 people, each buying 20 or more properties.” Akers’ recently launched mapping project, Property Praxis, maps not just property data but power, revealing that 20 percent of the city’s property is now owned by speculators.

On its website, Property Praxis shows the concentration of speculator-owned properties in Detroit’s neighborhoods

While Loveland is indisputably one of the most innovative companies in its use of maps and data visualization, it failed to recognize who would most benefit from the new data. Instead of local homeowners, neighborhood organizations, or city government, it was the private sector with the means and opportunity to “own this.” 

Open Data Isn’t Necessarily Equal, or Transparent

In the eyes of Loveland and other tech-enamored observers, technology promised to be a panacea for Detroit’s longstanding challenges. But like so many other tech start-ups, often made up of predominantly young, white, well-educated and well-off employees, Loveland failed to engage with the political dimensions of its work.

Disconnected from Detroit’s complex racial and economic history, Paffendorf sought only to make public information easily accessible – to correct an “information crisis.” Like many tech enthusiasts, he and his team assumed that open data would automatically contribute to solving the housing crisis, while also fostering greater transparency, accountability, and citizen empowerment. In this, Loveland is part of a national movement seeking to improve government by putting more and more data online. 48 US cities and counties, encouraged by the Obama administration’s Open Government Initiative, have launched open data platforms to streamline information and digitalize municipal services. Yet few have considered what open access means in communities that are deeply divided along racial and socioeconomic lines.

Most open data platforms use cumbersome formatting (think unwieldy excel spreadsheets) that require a certain threshold of knowledge and data analysis. As Diana Nucera, Director of the Detroit Community Technology Project at the Allied Media Project, pointed out, “if Detroiters don’t know how to use it, what’s the point of creating all these tools?” She told me that open data proponents often “have no connections to [local] communities to actually support them in using [open data] for their benefit.”

Housing, in particular, is a deep wound in Detroit. Ever since the city became a destination for African-Americans moving north and west during the Great Migration, the issue has been a fault line for racial politics. As Akers explained to me, “the frustration with these mapping projects, [and with] this apolitical tech approach is that it is simply an exercise in which technology will improve the city.” But in a city in which online access is a luxury good and property is a lightning-rod issue, simply making information available—without also teaching the skills to read and leverage that data for community use—does little to enhance transparency or solve community challenges. At best, such poorly designed open data platforms are disempowering. At worst, they open the door to the further exploitation of disadvantaged communities – just as Loveland did.

Making producers, not consumers, of tech

Loveland isn’t the only player eager to tackle Detroit’s challenges with data and technology. The Allied Media Project (AMP), which supports art, media and technology projects working to achieve social change, suggests a completely different framework for how technology can help solve the city’s challenges.

In 2010, AMP was awarded $1.8 million in federal stimulus funds to support broadband adoption and fund the Detroit Future project. With four in 10 of its nearly 700,000 residents lacking broadband, Detroit has “the worst rate of internet access in the country”. But AMP understood that its mission went beyond providing internet access. In communities that had suffered from the systematic neglect of basic services, underfunded schools, and a failing labor market, AMP developed an alternative model of technological empowerment designed to create producers, not consumers, of tech.

AMP’s three-year project was split into three parts: Detroit Future Media, to build digital media skills with community leaders; Detroit Future Schools, to build digital media skills among students; and Detroit Future Youth, to build digital media skills in youth organizations.

AMP works with community members to set up wireless access

The Detroit Future Media project focused on providing tech training for community leaders: organizers, teachers, students, small business entrepreneurs, all part of an existing civil society network. Where Loveland saw an information crisis and responded with data, AMP saw a community in crisis and responded by equipping its residents with the tools and skills that made sense for them. By tapping key individuals already engaged in community outreach and facilitation, AMP’s trainings could be quickly disseminated throughout local neighborhoods. According to Nucera, the project follows the same model as the citizenship schools that sprang up across the South during the civil rights movement to help African-Americans pass segregationist literacy tests and register to vote. “Tech education needs to be through popular education,” she explained. “You get folks from the community to teach folks, you teach teachers how to teach, and you focus the curriculum on what people need.”

Though the Detroit Future project formally came to an end in 2013, it lives on through AMP’s “DiscoTechs”(short for Discovering Technology). These community workshops teach advanced skills like data visualization and how to submit a Freedom of Information request. AMP’s focus on sophisticated media skills is a refreshing take on the standard approach to digital literacy. AMP trainers believe that teaching basic computer skills like typing or surfing the web reinforces a rudimentary view of how low-income residents use digital tools, especially as internet use shifts from computers to tablets and smart phones. In contrast, AMP’s approach puts the community up front and then engages with technology in ways that respond to the community’s needs and interests. As Nucera explains, using media and storytelling allows people to “navigate the tech through something that’s relevant to them. The thing we’ve learned the most through this work is to see tech as an ecosystem”—not an end in itself.

AMP staff acknowledge the challenges of their undertaking. With Detroit’s public schools in crisis, teaching digital skills has taken a backseat. Despite the project’s hands-on approach, students still struggle with basic concepts of mapping, let alone more complex digital skills. Alex Hill, who runs the mapping and geography blog Detroitography and worked with Josh Akers on Property Praxis, also assists with the DiscoTechs. He noted that not all students who finish the course are able to go out and find their own data or make their own map, but “they at least know the questions to ask if someone is going to come into your community and say, ‘Hey, we have this platform or we have this data – or we want your data – they have the basics to ask questions about privacy and other issues.”

Many other community-based tech initiatives are emerging alongside AMP, all with the shared purpose of making tech a relevant, everyday tool for Detroiters. In one of Detroit’s historic neighborhoods, the Music Box helps train local residents in tech production. Hosted on a community wireless network, the Music Box is a digital radio show that captures the redevelopment of the bohemian Cass Corridor. Now rebranded as Midtown, Cass Corridor once provided a vibrant intellectual and artistic space, home to some of Detroit’s most famous performers, including Lily Tomlin and the White Stripes, and the site of many of their early acts. Today, the neighborhood is the target of a major redevelopment project. The Music Box allows residents to record and upload their stories to create an oral history of Cass Corridor. It provides residents with a way to preserve the neighborhood’s history and engage with the contentious politics of gentrification, while also embracing the change. With developers across the city increasingly resistant to community input, projects like Music Box empower local residents to voice concerns and be part of the city’s redevelopment debate. 

What projects like AMP and Music Box do so well--and what sets them apart from tech startups like Loveland--is that they make digital tools intelligible. Under Nucera’s guidance, AMP has recently begun conducting surveys to explore how citizens interpret the language of open data policies, and how this language shapes the culture of use around open data. The group has also begun experimenting with so-called “scenario” teaching, an approach that gives residents different real-life scenarios of open data and how it could be used to either help or harm their communities. The initial teaching scenarios have focused, appropriately, on property. They guide participants in exploring how data about blight conditions can either help residents lobby the city government for more services and foreclosure relief or facilitate redlining by insurance companies and justify demolitions and the divestment of city services. As in the case of Loveland, open data on available land parcels can help residents identify affordable homes, or it can lead to widespread speculation. Using these real-life teaching strategies, AMP hopes to identify how open data platforms and policies can be designed to bring the values of transparency, accountability and civic participation to life.

A New Path Toward Civic Tech

This community-first approach is known by tech activists as “civic tech.” Laurenellen McCann, Director of New America DC and a self-described social theorist, educator, and organizer, describes civic tech in terms of “building with, not for”: “building real civic technology, the kind that doesn’t just ‘solve problems,’ but actually allows people to enhance their quality of life and (re)define their relationship with their governments, media, and each other, requires a perspective that prioritizes people above production.” Instead of focusing on the product (i.e., Loveland’s “Parcel Map”), civic tech initiatives focus on people, like Detroit’s struggling homeowners, and engage with the complex political forces that shape local communities. As McCann explains, civic tech works directly with “the real people and real communities we claim to serve when we set out to create tools for public good.”

National initiatives are increasingly embracing such approaches. In March of this year, the Obama administration announced The Opportunity Project, which seeks to reverse the current hammer approach of open data portals that “[start] with data and [look] for problems to solve.” Eight cities will participate in the program, Detroit among them, building data tools according to the issues that need to be solved.

It’s an admission that data alone can’t solve systemic inequity or fix municipal mismanagement and poor social policy. And it’s one that tech companies should take to heart. To truly “[arm] people with information,” to empower them to buy their own homes and confront existing disparities, means seeing more than an information crisis or a digital gap. In Detroit, it will require grappling with local history, engaging meaningfully with local residents, and understanding the decades of discriminatory housing policies that have produced the city’s current map. And with AMP and other community-based project leading the charge, Detroiters themselves are beginning to lead that conversation. For a world rapidly changing through technological and digital culture, Detroit may once again lead another revolution–this time, from below.

Editor's note: Loveland did not respond to questions