**Note: This blog post will make several references to Detroit’s master plan neighborhoods. If you would like to view a reference map of these neighborhoods to help orient yourself, please click here.
What is the Neighborhood Dynamics Index?
The attractiveness of a neighborhood for investment is a function of an enormously complex range of attributes. Households and policymakers seeking to invest may consider a neighborhood’s accessibility to jobs, shopping, and public services as well as the cost of these services in terms of the tax burden. They may also consider the number of other residents living in a neighborhood, seeking to invest in areas with high levels of density and/or vitality (or areas with larger lots and quieter streets).
In an effort to capture at least some of the complexity of the investment decision, D3 has created a Neighborhood Dynamics Index that seeks to identify areas where potential investments will have a high impact and also appear more attractive.
Though the index can include a variety of factors, depending on the purpose for which it is calculated, this version of the Dynamics Index contains three equally weighted factors, each of which has already been the subject of a previous City of Change blog post:
- Average Condition of Residential Structures
- Density of Occupied Residential Structures
- Density of Mortgage Deeds
[You can find definitions for these factors at the bottom of this post]
Once individual scores are calculated for each indicator, the three scores are averaged to create the Dynamics Index score. As in previous installments in this series, the data have been assembled and the index has been calculated for 840 Census block groups in the city of Detroit.
Neighborhood Dynamics Index Scores in 2009
Figure 1 presents the distribution of Dynamics Index scores in 2009, divided into four equally populated ranges. The areas in the top category (representing the highest relative impact potential), which generally have above-average scores on all three measures, are found primarily in Northwest Detroit, the Cody Rouge community and the far East Side. In much of the central portion of Detroit, only five block groups are in the top range: two in Southwest Detroit, one north of Hamtramck and two on the near West Side. The highest-category block groups are often adjacent to areas in the second-highest range. The result is a gradual transition in many areas, rather than an abrupt transition from higher to lower scores.
Neighborhood Dynamics Index Scores in 2014
The Dynamics Index scores for 2014 are fairly similar to the 2009 results (Figure 2). The number of block groups in the top category is just 10 fewer than five years earlier. However, the number of areas in the top category that are located west of M-39 (except the area north of Seven Mile) and east of Alter Road has noticeably decreased. In addition, traditionally stronger but lower-density neighborhoods such as Indian Village and Palmer Park have a much greater presence in the top two categories in 2014, compared to 2009. This change indicates a shifting balance away from Detroit’s denser, middle-income areas and toward the less-dense, but higher-income and still relatively stable communities. The area along Tireman, just north of Dearborn, also has more block groups in the top category. The number of block groups in the bottom range (the areas with the least relative impact potential) also decreased during this period, with corresponding increases in the middle two categories.
Changes in Neighborhood Dynamics Index Scores, 2009-2014
As indicated in Figure 3, increases in the Dynamics Index scores between 2009 and 2014 were widespread across the city. Many of the block groups with increases are located in areas that had low scores in 2009 – the near West Side, the Midtown area and much of the East Side – and, despite these absolute gains, many of these neighborhoods continue to be in the lower half of the relative distribution. However, portions of Woodbridge and Midtown have surged into the top half of block groups, likely as a result of the highly organized redevelopment efforts taking place in those communities. Scores also improved in traditionally stable areas such as Palmer Park, Rosedale, and Indian Village.
Much of the decline in Dynamics Index Scores was concentrated in the still relatively stable neighborhoods of Cody and Rouge, near Dearborn, and Finney and Denby, on the far East Side. While these areas generally remained within the top two ranges of block groups, the decline in Dynamics Index scores relative to other portions of the city is concerning, and indicates that these neighborhoods may be in danger of tipping into a spiral of more consistent decline.
The Neighborhood Dynamics Index is by no means intended as the sole tool to be used when making investment decisions. However, the in-depth analysis that it represents allows D3 to drill deeper into the data than would be possible by looking at each indicator in isolation. In addition, the Dynamics Index doesn’t only identify areas of high investment potential, it also allows us to track how Detroit’s neighborhoods have changed relative to each other, and, through its individual components, helps identify why these specific changes may have taken place.
Overall, the Dynamics Index results are somewhat more encouraging than the results for its individual components. Because the three components of the Dynamics Index change in different ways in different areas, there has been little change in the relative distribution of the block groups. The tendency has been for block groups to move closer toward the middle (fewer in either the highest or lowest ranges) rather than experience the general downward shift that can be seen in the scores for each of the individual factors.
Factors We Used in the Neighborhood Dynamics Index
Average Condition of Residential Structures. The physical condition of the residential structures in an area reflects how well the homes and apartment buildings have been maintained, regardless of the age of the housing stock. The presence of blight in a neighborhood is a sign of disinvestment, while well-maintained older homes reflect continued interest of residents in the neighborhood.
In recent years, two separate assessments have been made of the condition of housing in Detroit. In the 2009 Detroit Residential Parcel Survey, D3 rated the structural condition of all one- to four-unit residential properties on a four-point scale. The Motor City Mapping initiative undertook a similar survey of all residential (and commercial) structures in 2014.
Density of Occupied Residential Structures. Neighborhoods in which most of the residential structures have at least one unit occupied reflect continued market interest in that area. These areas also represent Detroit’s remaining areas of relatively dense population, where new investments and interventions have a stronger chance of affecting a large number of people.
The 2009 and 2014 structural condition surveys also provide information on the occupancy status of each structure. The measure created by D3 for incorporation into the Neighborhood Dynamics Index is the number of occupied structures per square mile.
Density of Mortgage Deeds. The number of mortgage deeds recorded in a specific neighborhood reflects positive regard by financial institutions. Though there are a number of different reasons why mortgage lending activity in a neighborhood might be low, the areas that enjoy higher levels of interest and support from financial institutions are often more attractive for investment.
The measure of mortgage density included in the Neighborhood Dynamics Index represents the number of mortgage deeds recorded per square mile. Each value is based on two years of data, for 2008-09 and 2012-13. The absolute number of mortgage recordings is very low across much of the city in each period. Areas with relatively high levels of mortgage activity are thus particularly noteworthy.