Move Forward Strategy for Detroit

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    Phil Power_B4_Feb_22 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
    ppower@thecenterformichigan.net

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