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.