U of M Study Says Detroit Suburbs on Upswing

Oakland, once considered one of the top five counties in the United States in terms of wealth, has seen a dramatic slide in the past few years. According to the recent study, the county lost about 60,000 jobs in 2009, more than the previous five years combined. However, according to Fulton and Grimes, Oakland will lose almost 10,000 jobs this year, but then will begin a climb out, adding 2,400 jobs in 2011 and nearly 8,000 jobs in 2012.

The Detroit Metropolitan area as a whole has suffered from the nation's highest unemployment rate, losing 150,000 jobs in 2009, according to the U.S. Department of Labor. That rate of job loss, about 7.8% of the region's jobs, is nearly double that of the nation, according to the government agency.

Many large projects Oakland have stalled, including the massive mixed-use Bloomfield Park in Pontiac and the redevelopment of the former Kmart headquarters in Troy. However, many local commercial real estate professionals agree with the study that Oakland, and the Detroit area, seems to have hit bottom.

"The automakers seem to be generally turning the corner," says Matthew Fenster with Paragon Corporate Realty Services. "And there's a lot of potential for growth in that industry. Both the auto companies and the suppliers have recalibrated, they were producing 15 million to 16 million units per year, and now they're putting out 10 million to 11 million units per year. If that just bumps up to 12 million units, we'll feel like it's the 1980s coming back again, there will be profits and hiring."

The region hopes to diversify, bringing in companies that can produce alternative fuels and energy products. The right people are here for this industry, Fenster says. "You have this amazing brain trust in Detroit, some of the finest engineers who have come here from all over the world, and they want to stay in the area."

However, to get development moving, he says, communities need to eliminate bureaucracy and become more project-friendly. Oakland cities such as Troy, the former office market jewel in the Detroit area, have to let the market decide where to insert development, instead of rigid control, he says. For example, redevelopment at the Kmart headquarters site in Troy failed in part because the city refused to alter its residential quota for the site, even though the housing market had tanked. "The communities need to welcome development now more than ever," Fenster says.