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Original article URL: http://bridgemi.com/2012/04/time-to-discuss-radical-options-for-detroit/

Phil's column

Phil Power is founder and chairman
of the Center for Michigan.

Time to discuss radical options for Detroit

Most of the sound and fury enveloping Detroit these past few weeks has been about the near-bankrupt city’s immediate financial survival, whether via a consent agreement between the city and the state or, failing that, an emergency manager.

No one doubts Detroit is in terrible financial shape. The reported annual operating deficit is near $270 million. There’s more than $10 billion in total debt and unfunded liabilities. Sometime this month — or May at the latest — the city will run out of cash.

Naturally, then, most of the attention is being paid to how to salvage the city’s finances without it sliding into bankruptcy.

But suppose the city does manage to barely get through this financial crisis. Then what?

A dead city walking is hardly a recipe for prosperity. Cities, like people, need to grow — or die.

So the question we should be asking throughout Michigan is: What’s a practical strategy for Detroit’s future growth?

Here are three suggestions, designed to get folks thinking. You may find them radical — but things are clearly radically wrong in Michigan’s largest city. First aid is no longer enough when the patient is mortally ill:

* First, attack the enormous amount of vacant land in Detroit.

Most experts say something like 40 square miles of vacant land lie within the 139 square miles within the city limits. That’s enough vacant space to contain all of Paris, with a bit left over. These vast tracts are unproductive, and very little of the land generates any tax revenue. That’s not surprising. By some estimates, the owners of only 40 percent of real estate parcels in the city are paying real estate taxes on time.

But what should Detroit do with its vacant land? Lots of smart people are thinking about it. Some advocate large-scale urban farming. Others ask about the possibility of erecting great fields of solar panels.

American history may offer one guide: Urban homesteading, which could be a powerful lure indeed.

The original Homestead Act was passed in 1862. Basically, it offered title to any person who occupied and worked a parcel of land for a suitable period of time.

Homesteading drove the westward expansion of our country for a long, long time. While I was sports editor in Fairbanks, Alaska, in 1962, a guy ran into the newsroom one day waving a piece of paper. It was title to the 40 acres he worked south of town. He couldn’t have been more thrilled. 

Right now, something like half of the vacant land in Detroit is owned by the city, county or state through tax foreclosures. Why not offer up parcels of this land to urban homesteaders, people who could be the new urban pioneers?

* Make Detroit attractive to immigrants.

The city could attract immigrants by offering a route to citizenship to anybody who comes to America with, say, $500,000 in liquid assets, moves there, starts a business and employs Detroiters.

That is precisely what worked for Vancouver, British Columbia, after the People’s Republic of China took control of Hong Kong in 1997, terrifying much of the local business community. Vancouver offered Hong Kong residents exactly that deal — and the result was a gigantic movement of capital to Canada, which became the foundation for Vancouver’s present-day prosperity.

As luck would have it, there is a federal visa category already on the books, EB-5, which establishes just such requirements. Though the program will need to be renewed this fall, there are currently lots of unfilled slots that could be taken by entrepreneurs heading for Detroit.

* Finally, we should recognize that big core cities are a relic of history.

Most of our big cities — Detroit, Grand Rapids, Flint, Saginaw, Kalamazoo — got started long ago as smaller towns surrounded by farmland organized into townships. As time went on and these areas grew, the towns pushed against surrounding communities, resulting in turf wars between central city and suburbs.

We’ve seen this problem time after time here in Michigan — especially in the Detroit area. Up until now, we’ve never been able to do anything much about it, in large part because of racial politics.

But the days when we were rigorously separated by race are going fast, as anybody who drives through Southfield, Dearborn or West Bloomfield can easily see. Before our eyes, the suburbs have become more diverse, especially as former residents of core cities decide to move elsewhere to lead a better life.

In the case of at least two Michigan central cities — Detroit and Grand Rapids– conditions are deteriorating fast enough to force reconsideration of the “metro government” movement that has so successfully been applied in Indianapolis, Nashville, Tenn., and elsewhere.

There, the central cities have been merged with the surrounding suburbs, and the results have been outstanding.

In the case of Grand Rapids, such a movement — “One Kent” — was talked about last year. Sadly, the idea turned out to be politically premature and was soon pushed to the back burner. But the Motor City is much further gone. It’s hard to see how Detroit — with an excess of vacant land, deteriorating infrastructure and a history of gigantic out-migration — can ever again mount a tax base adequate to sustain a proper city.

So why not merge the tax base of Detroit with that of the surrounding suburbs? Newt Gingrich’s presidential campaign may not be going anywhere, but why not adopt his idea of making Detroit a tax-free zone?

Clearly, none of these ideas guarantee success. But, at the very least, they can all kick-start the very necessary process of beginning to think how to give Detroit a future that includes growth, rather than just emergency measures to help the current wretched model linger on.

Editor’s note: Former newspaper publisher and University of Michigan Regent Phil Power is a longtime observer of Michigan politics and economics. He is also the founder and chairman of the Center for Michigan, a nonprofit, bipartisan centrist think–and–do tank, designed to cure Michigan’s dysfunctional political culture; the Center also publishes Bridge Magazine. The opinions expressed here are Power’s own and do not represent the official views of the Center. He welcomes your comments via email.

 

 

 

10 comments from Bridge readers.Add mine!

  1. Frank Kalinski

    There will be no merging of suburbs with Detroit. Detroit is a SUBURB of suburbs. This is new. A true paradigm shift that we’ve not been able to see yet. But we are well down the other fork in road!

    Regardless, a city is its people. A large percent of the population of Detroit either work for the gov’t, collect pensions from the govt, disability from the gov’t, collect welfare, or some sort of assistance. The Racial disparities magnify and distort the core problem which is a dependency/enabler relationship as bad as any alcoholic and the family and friends that make it possible for the addict to continue in his self-destructive
    ways.

    All we’ve heard is from the politicians is where is the money? They don’t know where money comes from. This is an accurate reflection of a significant portion of the population.

    I know that as I wind down my working years if we in had to merge with Detroit my wife and I would leave this area.

    1. Matt

      Ditto for Grand Rapids. Even with the existing small area of combined government and shared services between the suburbs and the City of Grand Rapid, the suburbs get out voted and the short end of the stick! The real aim of the One Kent crowd is the push GR’s underfunded pension and heath care on to the county residents/taxpayers. Don’t even think about it!

  2. Dave Friedrichs

    A great time for great ideas capable of bringing real change! Thanks, Phil, for giving voice to ideas that a majority of Michiganders could surely get behind in the interests for a revitalized and redeveloped metro area. Among those listed, how about prioritizing on the basis of near term and long-term economic impact? Implementation can then be one-by-one until the new “Metro Detroit” emerges, returned to financial stability. Rather than catastrophe as a cause for change, state’level approval of appropriate CARROTS would be the positive and proactive approach. As one reader’s prioritizes, number one for impact would be defining a new “Metro Detroit” as a sales tax free area — with jurisdictions that combine-merge (Indianapolis-style) into the new Metro government similarly absolved from collecting state sales tax. Certainly, this tangible economic advantage (even if phased back in future decades according to benchmarks of economic strength) would both reinvigorate and redefine a new Metro Detroit. Homesteading and marketing the new Metro Detroit to the world (a la Vancouver, as Phil outlines) would complement and accelerate the SE Michigan’s redevelopment as the HUB and inland port of the north american heartland for intermodal distribution and logistics. The light switch is on – let’s roll!

  3. Jay Hoekstra

    http://willdoo-storage.com/Plans/D6/District_06_Appendix_C_Charrette_Report.pdf

    Please see page 9 of this charrette report which shows rebuilding strategies for a neighborhood in New Orleans which is similar to parts of Detroit in that there are only a few scattered houses left in a neighborhood

  4. Matt

    Why not cut chunks out of the old Detroit and set up brand new self governing separate communities, villages or townships? Then you could do any or all of the rest of your suggestions. What is the downside? Would be a fascinating experiment at the very least.

    1. Jeffrey Poling

      Matt, I believe you have a terrific idea which I would like to expand. The April 1, 2012 Free Press article defines and identifies large areas of vacant city owned land. If one such area, Elgin/ Gilbo near City Airport for example, could be “given” tax free, to a developer or group of developers on the following conditions: 1) A self contained community with its own school system K-12. 2) Shopping district with grocery, pharmacy, hardware, dept. store 3) Entertainment district with movie complex, community center, restaurants 4) All districts built around a landscaped city square or park similar to Plymouth, MI. The community would have its own police and fire depts and its own government.
      This is certainly a pie in the sky utopia but I am naive enough to believe it could work. Detroit’s politicians would no doubt fight it unless they were given some taxation or political control. But if it succeeds it would be a model for further developments.

  5. Themotivator

    The city should work with the Arbor Day Foundation and the schools having fund raisers selling trees to support the schools. The city could suggest the types of trees and where to plant them.
    Why try to attarcked more immigrants? We have enough people not working
    Give the people tools to work with so they can start a business and hire people to work
    The health care providers should work with the health insurance companies and come up with a health plan that would eliminate out of pocket expenses, deductibles, lowewr premiums, and health care providers accept what the insurance companies pays them and not bill the patient further.. This idea alone would attract people and businesses to the state

  6. T.W.Donnelly

    Urban freeways sliced up the city into little pockets which fell into neglect and despair.So, much of the old time idea of community got lost to the roadways. Suburban malls pulled shopping business out to the suburbs, leaving city businesses to dwindle.So, both resdiential and commercial interests need attention.
    I like the idea of solar farms producing energy which could be sold to DTE, reducing their need to build large nuclear reactors or coal/oil fired energy generation.In the short run, jobs would be created building the solar farms and then operating them. Having ready power woud attract manufacturing, light or heavy.I would put solar panels on every vacant lot in the city in some coordinated way. As land is needed for other uses, decommission the solar farms.Abundant, clean energy that comes from the sun is a gift from the heavens.
    What we don’t need is more casinos, which suck the financial spending power out of the poor and middle class people who are fooled into buying the pipe dream of instant wealth by some big win at the tables.
    We have to do something about corrupt officvials who prey on the resources of the city for their own craven purposes.We need to prosecute them and put them in a Detroit based prison as a constant reminder that stealing the people’s money gwts you put in jail.
    I wish I could find a good short term solution to detroit’s needs. Detroiters are wonderful people who deserve a good life in a vibrant city Detroit has a long and rich history that needs to be honored and preserved.. We need to beef up income tax collections from those who are in arrears by adding staff for greater enforcement. This is a money-maker.
    I commend you,Mr Powers, for your zeal in solving these issues with good brainstorming of ideas.

  7. William C. Plumpe

    Hhhhmmmmm. I had an “urban homesteading” idea at one point. I don’t know if it would work—it might be too late. There is a surplus of fixable housing in the City. At one point in time there were thousands of refugees from Hurricane Katrina in and around Houston and New Orleans. With the recent tornadoes and Mississippi River floods I’m sure there are a lot more homeless people. Move them to Detroit, give them a fixable house and try to find them a job—maybe urban farming or working on the solar farms. It would give people a place to live and some degree of hope. And it would solve the problem of refugees in Texas, Louisiana and the Mississippi River states. I’m sure there would be some type of emergency Federal funding to relocate people. Just an idea.

  8. Duane

    By describing only thre possible questions, Mr. power has given us the answers and see not reason to look any further.

    I would offer that the questions should start with are are the functions of the cities, move to what functions the central cities can provide, and are the functions they provide of benefit to the people of the surrounding communities.

    Simply wanting to save ‘Detroit’ or any central city is about being about being locked into the past and not looking to the future.and serving the citizens.

    I would even offer a couple of other questions, what is the consequence, not just the wringing of hands and emotional wailing about all the problems it will create. List those problems and be specific, because unless you no what they are yuo can be sure that they are happening no matter what is done, or they will continue and risk cause the ‘saving’ to fail making things worse, or that you may find better solution to them with the ‘city’ bankrcpy. For the reality is the ‘city’ is failing and taking many down with it.

    Right now, no one has given a reason to save the ‘city’, any failing central city in Michigan other than it has been there for so many years and had a great history.

    Some of the ideas Mr. Power offers are very interesting, but what are they solving and why?

    Do we need more farm land? Wouldn’t be more efficient to plow the smaller town under for farm land and move those residence to the central cities?

    why do we need more immagrants, especially wealthy one? Won;t they only become the targets of those central city and DC polciticians to be blamed for the poor not having enough?

    Why do we need bigger cities, county wide cities? Does than simply mean that the old ‘central cities’ get to inflict what they have been doing in the past on the surburbanites?

    First explain the value ‘central cities’ will provide in the future, not the past, second describe how that will benefit each and every citizen not just the ones in the ‘central cities’ (different/better than what they have now), third establish perfromance metrics such that if they aren’t met within a set number of years then the ‘central city’ is allowed to fail. Why should we think that the ‘central cities’ will change to save themselves, the wrangling in Detroit surely doesn’t suggest that.

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