Detroit Mayor Dave Bing should be commended for attempting to harness scarce city resources for maximum benefit. Forward-looking proposals in this city don’t surface too often. However, his dream to reshape the city into a 21st Century model is not just futuristic, it is unrealistic. He should identify and execute a few doable initiatives that promise a long-term climate for growth and prosperity.
The Detroit Works Project clearance proposal is bold and intriguing. The mayor wants to create as many as nine “desirable” neighborhoods to relocate residents from under-populated communities. Establishing zones in selected geographic areas that concentrate the delivery of essential services would save time and money and make it easier to package vacated sites for new residents and businesses.
Regrettably, the stated benefits of such zones are greatly overstated. Among the perverse incentives is the possibility that residents experiencing blight might be encouraged to not maintain their homes in anticipation of being bought out. If banks and financial institutions refuse to provide home repair loans or mortgages, more physical deterioration and accelerated blight is inevitable.
The Bing administration steadfastly maintains that residents will not be forced out of their homes. A state law sanctions the use of public condemnation to eliminate blight. Since it has been upheld by the courts, I wouldn’t rule it out.
The zone idea is not new. In the late 1980s, then-Mayor Coleman Young commissioned the blue-ribbon 21st Century Committee to map a new course for the city. Business leaders from the former Detroit Renaissance recommended the creation of a large urban village, (town within a city). Conceptually, an area of the city would be cleared, cordoned off and repopulated with new market-rate housing, a separate police and fire department and independent schools. Young rejected that recommendation, and in doing so may have missed a golden opportunity to put the zone approach to the ultimate test.
The city actually established zones in the 1990s – unsuccessfully I might add. The Renaissance Zones under former Gov. John Engler and federal Empowerment Zones under former President Bill Clinton were designed to be safe havens from taxes in select economically depressed sections of Detroit. However, few, if any, new taxes are currently being generated in the impoverished areas that received zone designation. And the people and companies struggling in distressed neighborhoods without subsidies received no benefit at all.
The Detroit Regional Chamber is currently looking at ways to make the entire city a “tax free zone.” In theory, this would free existing and new businesses and residents from the highest combined tax rate in Michigan. What makes this impractical is that the city would still need revenue sources to pay for services.
Even under the most optimistic circumstances, zones would be a costly way to create “islands of hope” for a limited number of people. If Detroit is to move successfully into the future, city leaders must complement any tax-free status with the simultaneous elimination of red tape and bureaucratic hassles to stimulate growth and business retention. New ways to provide services at lower costs also must be found.
Targeted tax breaks and subsidies can’t overcome the detrimental effects of crime and violence. Considering the extent of the crime problem, the Bing administration might marshal support from all residents by placing at the top of a short list of priorities the creation of citywide “crime-free zones.”