John Gallagher

Detroit Free Press

One of the most important players in Detroit’s war on blighted properties is also among the least known.

A small three-person Detroit firm called Dynamo Metrics has provided much of the intellectual underpinning that allows Detroit and other Rust Belt cities to use tens of millions of dollars, much of it federal money, to pay for demolition of eyesore houses.

Dynamo, founded by partners Nigel Griswold and Ben Calnin, two Michigan State University graduates, operates in the arcane field of “spatial econometrics” — the marriage of vast amounts of public data with geographic mapping programs to analyze what works in urban redevelopment.

Last October, their 36-page report dense with statistics and formulas found that Detroit homes as a group increased in value more than $200 million thanks to the demolition of eyesore properties nearby. That translated into an increase in home valuations of at least $4 for every $1 invested by the federal government in demolition activities in Detroit.

The report marked an important milestone in Detroit’s anti-blight effort. Businessman Dan Gilbert, whose Rock Ventures helped pay for the study, hailed the result as “the financial proof demonstrating blight elimination is an investment in the community that has a direct and immediate financial return.”

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Similar studies by Dynamo in Cleveland helped support the expenditure of federal money on blight removal there, too. And the firm is currently working in both Gary, Ind., and with the state of Ohio on similar work.

Beyond the immediate contribution to the anti-blight effort, Dynamo Metrics represents a potential answer to the question of where Detroit will find its future economy. Small, smart, data-savvy tech firms like Dynamo Metrics are springing up all over the place, bolstered by cheap computer power and a growing mass of government data available to the public.

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“It’s fun,” Griswold said in his small office in the Penobscot Building in downtown Detroit, a suite mostly bare for but desks and computers. “We’re having a good time. It’s such a neat thing to have the work that fires you up and makes you excited, become your own company, do positive things. It’s pretty neat that it’s working out.”

The work that Dynamo Metrics performs is often called “decision support” or "actionable analytics," providing data and analysis to political leaders as they try to choose among complex policy options. Examples: Where to spend money first on new streetlights, filling potholes, or demolishing eyesore houses? Studies by Dynamo Metrics helps eliminate the guesswork by demonstrating which options provide the biggest and fastest benefit.

“How do you do research that’s timely enough, fast enough, relevant enough in that policy space to help in that decision-making process?” Calnin said.

The third member of the Dynamo Metrics team, Ed Herman, a Cleveland-based attorney, said the firm’s work is made possible by the large amount of data collected by governments that is open to the public. That data can include everything from assessed valuations and deed transfers to crime statistics, fire department reports, home sales, and much more.

“Local governments collect data, a lot of it, and local governments use that information to collect property taxes, but they don’t use it for much else,” he said. “It’s sitting there and quite often they don’t even realize what they have. There’s a growing awareness that we have a resource here that we’re not using.”

Any computer program is only as good as the data that researchers put in at the front end. For their Detroit study the partners looked at thousands of deed transfers to cull the legitimate market sales from the dross — foreclosure sales, $1 transfers among family members, and other anomalies that would skew their results. “You identify those willing buyer, willing seller sales because that’s the real market,” Griswold said.

Eventually they came up with 8,386 market-rate sales in Detroit to examine in their study. The large number of sales and the vast computer power allowed them to tease out many different relationships beyond the impact of demolitions on nearby home prices. For example, they found that, all else being equal, a brick home fares better over time than a wood-frame structure.

Once their study was released last fall, it entered the political arena where both advocates and critics of the city’s demolition program could use it as they please.

“At the end of the day, if it’s objective science and it’s being used in a positive way, we’re okay with that," Griswold said. "There’s a point at which you have to release control."

Demand for such studies is growing as civic leaders grasp the power of the concepts.

“Let’s say we have $10 million in street paving” funds, Herman said. “Where is that $10 million going to best affect property values? Population stability? Other qualify of life measurements? The decision maker can have three or four courses of contact and pick one.”

Contact John Gallagher: 313-222-5173 or gallagher@freepress.com. Follow him on Twitter @jgallagherfreep.