Most of the sound and fury enveloping Detroit these past few
weeks has all been about the near-bankrupt city’s sheer financial
survival, whether via a consent agreement between the city and the
state or, failing that, an emergency manager.
Nobody doubts that Detroit is in terrible financial shape.
Reported annual operating deficit near $270 million. More than $10
billion in total debt and unfunded liabilities. Sometime this month,
or May at the latest, the city will run completely out of cash.
Naturally, then most of the attention is being paid to how tosalvage
the city’s finances without having to go 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 this state 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 lies 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 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 that. 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 waving a piece of paper. It was title to
the 40 acres south of town he worked, and 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?
· 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 Colombia, after
the People’s Republic of China took control of Hong Kong in 1997,
terrifying much of the local business community. Vancouver offered
them exactly that deal, and the result was a gigantic movement of
capital to Canada – and the foundation for Vancouver’s present day
prosperity.
Now, the changes of Washington adopting a sensible immigration
policy, especially during an election year, may be zero. But it turns
out there is a 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 mostly rural 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 till 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 and
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 a
reconsideration of the “metro government” movement that has so
successfully been applied to Indianapolis, Nashville and other places.
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. In the case of Detroit, it’s hard to see how the
city – with an excess of vacant land, deteriorating infrastructure and
a history of gigantic out-migration – can ever again manage to 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
survive.
***
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 chairman of The Center for Michigan, a
nonprofit, bipartisan centrist think-and-do tank, designed to cure
Michigan’s dysfunctional political culture. He is also on the board of
the Center’s Business L
eaders for Early Education.
The opinions expressed here are Power’s own and do not represent the
official views of The Center. He welcomes your comments at
[email protected]
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