Dan Gilbert will invest $ 500 million to help revitalize Detroit.
Dan Gilbert, the founder of Quicken Loans, has spent more than a decade investing billions in downtown Detroit. Now it is expanding its scope.
The Gilbert Family Foundation and the Rocket Community Fund, the philanthropic arm of Quicken Loans’ Rocket Mortgage company, on Thursday announced a $ 500 million investment in Metro Detroit, to be spent over the next 10 years. The first $ 15 million will go towards paying down the property tax debt of low-income homeowners who have qualified for Detroit’s Pay As You Stay initiative.
Quicken Loans has been based in Detroit since 2010, and Mr. Gilbert and his real estate company, Bedrock, have spent billions there buying and redeveloping properties. These efforts have been lauded for revitalizing a downtown area of around seven square miles, but also criticized by some who argue they haven’t done enough to help those living in the rest of the city.
“We feel like we’ve made Detroit a booming technology city,” Gilbert said. But he acknowledged that some may have felt left behind. “It can make up for that,” he said.
Mr. Gilbert added that his focus outside of downtown Detroit stems from his work on President Barack Obama’s Burn Removal Task Force in 2014 as the city emerged from bankruptcy. “Property taxes were the # 1 problem causing scourge foreclosures,” he said.
The housing crisis in Detroit dates back to the “racial pacts” of the 1920s. By the mid-2000s, the city became a subprime lending center that defined the financial crisis, with subprime loans accounting for three-quarters of mortgages. from the city.
The ensuing economic crisis toppled a city already struggling with a shrinking population and declining income. Those who paid for the repossession were largely low-income homeowners – in many cases blacks – which the city has also been accused of overtaxing. Poverty rates have increased and municipal services have deteriorated as a result.
In 2019, Quicken Loans settled a lawsuit with the Justice Department, which accused the company of misrepresenting loans to qualify for Federal Housing Administration insurance. Quicken did not admit any wrongdoing in the settlement.
The investment announced Thursday is an effort to deal with the lingering effects of the crisis. Twenty thousand families are eligible for the tax relief program, said Mr. Gilbert’s wife, Jennifer, who founded the Gilbert Family Foundation with her husband.
“By preserving this wealth, we also preserve the opportunities for intergenerational wealth transfer,” she said. “The stability of the home allows people to then focus on other economic opportunities that allow them to prosper.”
Once the initiative’s first $ 15 million is spent on paying back taxes for low-income homeowners, the remaining funds will go towards, among other things, repairing homes and bridging the digital divide.
The community will be vital for the contribution, including those who qualify for the initial tax break. “We can learn a lot about the next investments we want to invest in and how best to have a positive impact on them and their lives,” said Ms. Gilbert.