Dan Gilbert, the Quicken Loans founder, has spent more than a decade putting billions into downtown Detroit. Now he\u2019s broadening his scope.<\/p>\n
The Gilbert Family Foundation and the Rocket Community Fund, the philanthropic arm of Quicken Loans\u2019 Rocket Mortgage company, announced on Thursday a $500 million investment in Metro Detroit, to be spent over the next 10 years. The first $15 million will be put toward paying off property tax debt of low-income homeowners who qualified for Detroit\u2019s Pay As You Stay initiative.<\/p>\n
Quicken Loans has been based in Detroit since 2010, and Mr. Gilbert and his real estate firm, Bedrock, have spent billions buying and redeveloping properties there. Those efforts have been praised for revitalizing a downtown area of roughly seven square miles, but also criticized by some who contend they did not do enough to help those who live in the rest of the city.<\/p>\n
\u201cWe feel like we\u2019ve made Detroit into a tech boomtown,\u201d said Mr. Gilbert. But he acknowledged that some may have felt left behind. \u201cThis can bridge that,\u201d he said.<\/p>\n
Mr. Gilbert added that his focus outside of Detroit\u2019s city center stems from his work on President Barack Obama\u2019s Blight Removal Task Force in 2014 as the city was emerging from bankruptcy. \u201cProperty taxes was the No. 1 issue that was causing the blight foreclosures,\u201d he said.<\/p>\n
Detroit\u2019s housing crisis dates to \u201cracial covenants\u201d in the 1920s. In the mid-2000s, the city became a center of risky lending that defined the financial crisis, with subprime lending accounting for three-fourths of the mortgages in the city. (Quicken Loans settled a lawsuit with the Justice Department for its own lending practices during that time, but admitted no wrongdoing.)<\/p>\n
The economic crisis that followed toppled a city already grappling with a dwindling population and shrinking revenue. Those who paid for the recovery were largely low-income housing owners \u2014 in many cases Black \u2014 whom the city was also accused of overtaxing. Poverty rates ascended and city services deteriorated as a result.<\/p>\n
The investment announced on Thursday is an effort to address the lingering effects of the crisis. Twenty thousand families qualify for the tax-relief program, said Mr. Gilbert\u2019s wife, Jennifer, who founded the Gilbert Family Foundation with her husband.<\/p>\n
\u201cBy preserving that wealth, we also preserve opportunities for intergenerational wealth transfer,\u201d she said. \u201cThe stability of the home allows for people to then focus on other economic opportunities that allow them to thrive.\u201d<\/p>\n
After the first $15 million of the initiative is spent paying back taxes of low-income homeowners, the remaining funds will be focused on, among other things, home repair and narrowing the digital divide.<\/p>\n
The community will be vital for input, including those who qualify for the initial tax relief. \u201cWe can learn a lot about where we want to invest next and how best we can positively impact them and their lives,\u201d Ms. Gilbert said.<\/p>\n