Detroit’s Community Benefits Ordinance could be ...

Detroit’s Community Benefits Ordinance could be strengthened. Do the changes give residents enough power?

“We need to let this process be fully led by the community.”

michigan central station development plan rendering aerial

Rendering from Ford Motor Company’s development plan for Michigan Central Station, subject to the Detroit Community Benefits Ordinance.

When it went into effect in 2017, Detroit’s Community Benefits Ordinance was considered a landmark piece of municipal legislation. With it, Detroit became the first city in the country to mandate community involvement on all large-scale projects within its borders. 

It was an acknowledgement that developments affect neighborhoods in ways that often harm residents, like contributing to increases in rental rates or negatively impacting the environment, and that provisions like affordable housing and air quality monitoring need to be put in place to counteract them. 

But before a single Community Benefits Agreement was signed, some felt the ordinance was insufficient — it was actually one of two community benefits proposals Detroiters voted on in the 2016 election, and the weaker one, to grassroots activists’ frustration. They have been trying to amend the ordinance ever since. Well, those revisions are now in the works. 

The current ordinance is triggered if a project is at least $75 million in value, receives at least $1 million in property tax abatements or receives at least $1 million in value of city land sale. The city’s Planning and Development Department then begins the community benefits process by forming a nine-member Neighborhood Advisory Council (NAC) to negotiate with developers after a series of public presentations and meetings over a two- to three-month period. The city’s Civil Rights, Inclusion and Opportunity Department (CRIO) is tasked with enforcing the agreement signed between the developers and council. 

So far, 11 projects have fallen under the Community Benefits Ordinance, including Michigan Central Station, the Fiat Chrysler Plant, Piston’s Performance Center and the new Hudson’s building. 

Representatives for the city have argued that the current ordinance is making a difference, allowing strong enforcement of CBAs, capturing millions from developers for programs like the Workforce Training Fund and ensuring Detroit does “development more equitably than any other city in the country,” as CRIO Director Charity Dean told Curbed last year

But critics cite a number of issues. They say the monetary threshold for projects is too high, the NAC isn’t a true representation of residents (only two members are elected; the rest are nominated by the city) and that the agreements are non-binding, among other criticisms. 

Equitable development advocacy groups put together a list of 62 recommended changes. These were reviewed by the city’s Legislative Policy Division, who submitted a list of 17 potential revisions to Detroit City Council in October. 

Some of those include lowering the monetary threshold to $50 million, creating a second tier for projects that get at least $300,000 in subsidies or land, having three members (instead of two) voted to the NAC by the public and including a clawback mechanism for the city to retrieve city-provided incentives in case the developer doesn’t meet its obligations. 

Each councilmember is currently reviewing the changes. The council could vote on it in the next five months. 

One member who supports the revision effort is City Councilwoman Raquel Castañeda-López, who represents District 6. We spoke with her to get her thoughts on the effort so far and what she’d like to see in the final proposal.

This interview has been edited and condensed for clarity.

The Dig: How successful do you think the Community Benefits Ordinance has been?

Raquel Castañeda-López: District 6 has had the most projects triggered by the Community Benefits Ordinance. Each one in a way takes on its own life. There have been some similarities and trends, as well as problems for each community. 

In theory, it’s good. But it’s quite cumbersome in execution. To organize a new Neighborhood Advisory Committee every single time, when there’s not enough support or training for the folks who are elected, is a problem. 

What kinds of revisions do you support?

Training is a crucial component. The members of the NAC really should be offered training in development and civic engagement. Because even if you’re knowledgeable about these topics, you’re thrown into the process within days of getting elected, reviewing documents and negotiating. It puts you at a disadvantage. Currently the burden is placed on residents to do research, get caught up as quickly as possible, and they’re not given enough time or support to really leverage what the NAC was intended to be. 

Raquel Castañeda-López
Detroit City Councilwoman Raquel Castañeda-López

Another piece is the NAC itself — I firmly believe that it should be composed 100% of people in the immediate impact area. Right now only a chunk are. The Planning Department, to their credit, usually picks people from the area, but even so they’re chosen by the city. If this process is really going to be driven by the people, then they should be able to select themselves. Unfortunately that revision wasn’t adopted in this proposal, which says [only three of nine NAC members] should be selected from the impact area.

In addition, the process is really rushed. At least from the projects we’ve worked on, this puts the community at a disadvantage. Expecting folks who have full-time jobs or other commitments to process all the documentation, attend meetings, build rapport and relationships with the other members, do outreach — all of that takes time. Then you have to take your ideas from the community to the developers and negotiate. Three months has been the longest process I’ve seen but it’s usually closer to six to eight weeks. 

How would you respond to developers who argue that extending the CBA timeline will make their work more challenging, after getting all their financing lined up and then having to hit pause and go into sometimes costly negotiations?

I think that argument is used to scare folks. Look, there needs to be a balance. It’s unfair to bring developers into the conversation and connect them so late in the process after they’ve already secured their financing. It’s a disservice to them to say now you have to talk to more people and negotiate. 

Instead, so the developer knows up front, it should be stated from day one: this is our process, these are your expectations, this is what you need to comply with. There’s often pushback from developers and then the city acts out of fear. That’s when we hear: if we don’t do this, if we don’t rezone these parcels, we’re going to lose this project and the 300 jobs will go to the suburbs. There’s such fear around job creation and job loss. I understand. I grew up in poverty in Detroit and get that economic fear. 

But job creation in and of itself without fostering anything else is dangerous. We can prevent that by connecting developers with the community sooner rather than later. 

What else about the ordinance do you think needs to change?

The largest issue is that there hasn’t been a legally binding agreement between community and developers. And the process is very chaperoned by the mayor’s office. For several projects we worked on, the developer told us the mayor’s office doesn’t want us talking to the community or you or anyone else. That’s patronizing and controlling. There should be an opportunity for them to interact and talk. We need to let this process be fully led by the community and culminate in a fully binding agreement. And we can help this process by fully supporting and resourcing the committees. 

What kind of support did you have in mind?

Beyond training residents, we have a pretty good idea of what folks want: jobs, recreation, affordable housing, to name a few. I feel like we have enough data. But how are we using it to inform policies as a city and to institutionalize them so residents no longer have to negotiate on every single item. For example, we could have a developer checklist that they have to comply with on day one. That way we’re not forcing residents to negotiate for everything and there’s a minimum expectation for what developers have to abide by. There’s lots of room for improvement on the administrative side to standardize best practices.

Is there a kind of benefits remorse? Have residents told you that if they’d been better trained and supported, they would have asked for more from developers?

Across the board. The strongest agreement that’s been done so far was for Michigan Central Station and Ford. It’s to their credit. But the quality of the agreement shouldn’t depend on how good a corporate partner you are — all communities should be equally protected. 

There’s always been some level of division within the NACs; there hasn’t been one that’s said unanimously this is what we want. Ford was a great partner and worked well within the limitations of the community benefits process, but the NAC wishes they had more time, done more research, had more resources to do more outreach and then gotten more, like additional affordable housing, investments in public transit and home repairs within the footprint of the station to truly protect people’s public health. 

Some argue that if you give residents everything, they’d ask for everything. But that’s not true. People ask for the same things that are tied to health and quality of life, and which are reasonable and we can anticipate.

Aaron Mondry is the editor of The Dig and a reporter who covers development, housing, architecture, real estate and land use in Detroit. He was previously the editor of Curbed Detroit.