(WJBK) - Detroit's economic climate is changing for the better, and one area we're keeping our eyes on to hopefully see more growth, too, is the neighborhoods.
What if everyday people could own equity in their neighborhood's resurgence? With this new business model, a development company is trying to share the wealth.
David Alade and his cofounder Andrew Colom both used to live in New York City, where they saw neighborhoods gentrify, leaving some residents behind. Detroit, they realized, could be different. During the housing crisis, when it was possible to buy a house for $1,000, many people saved neighboring homes or old family houses at foreclosure sales. Now, as real estate slowly picks up in the area again, some developers offer cash for those houses. Century Partners realized they could also offer equity.
It works like this: If someone bought the house across the street five years ago, they can now sell it to the developers, who will give them cash and a stake in a fund that owns all of the developers' properties in that neighborhood. The fund sends out quarterly payments to everyone with equity. As rents rise, investors earn more.
Watch Alade and Colom's interview in the video player above to learn more about their business model.
For more information, visit www.centurypartners.org.