News that the city of Detroit intends to apply for one of the Obama administration’s new “Promise Zones” has expectations running high. Wishful thinkers are chomping at the bit to see how they might take advantage of the president’s proposed urban revitalization package of technical support and preferred treatment in the awarding of new federal grants.
Mr. Obama should be commended for offering to help distressed cities focus on those things that bring out the best in neighborhoods. His proposed Promise Zones are intended to be a catalyst for launching profitable opportunities in neighborhoods that have been all but written off. Conceivably, they fill a niche by unleashing pent-up talents and potential of people.
As a practical matter, the concept is an illusion; a whimsical attempt by the federal government to do for economically bankrupt cities what they can’t – or won’t do — for themselves.
Conceptually, these zones, like other revitalization efforts, are supposed to liberate the entrepreneurial spirit. But they are neither new nor successful.
Under the 1960s Model Cities program, for example, untold federal grants and regulatory directives were doled out. The same is true for the now defunct Urban Development Action Grant programs, meant to stimulate private development projects.
President George H. W. Bush made Enterprise Zones a key part of his urban agenda. President Bill Clinton funded Empowerment Zones. In 1996, then-Gov. John Engler introduced tax-free areas called Renaissance Zones to Michigan. In various ways, Detroit was the beneficiary of all of them, albeit without any obvious long-term benefit.
What resulted from the billions poured into Detroit were a few isolated monuments and a lot of payments to the politically connected. So while the goal of helping communities create jobs and jump start businesses is laudable, the city’s landscape remains littered with the corpses of failed redevelopment initiatives.
These kinds of zones might work in an area that merely needed a boost in developing a strong, local business community. New small businesses, after all, are the most innovative and responsive in creating new jobs. Some sort of zone designation might be a useful tool if accompanied by seed capital. Risk capital would improve cash flow, give employers more freedom to expand and employ marginal workers.
Detroit doesn’t meet those criteria. The city, after all, has an acute case of high unemployment and housing abandonment blues that can only be addressed through an organic pro-business master plan that untangles the web of bureaucracy and overregulation. The few entrepreneurs that try to make a start in Detroit these days routinely complain that planning, environmental, and building and safety procedures are a nightmarish obstacle course. Additionally, federal zones only hold out the hope of a significant stimulus if paired with comprehensive efforts to deal effectively with rising crime and education decline.
That’s why it’s difficult to understand the excitement over “zones” amidst so little recognition that the city lacks the resolve to provide a wholesome business environment on its own. They too are an expensive way to achieve very uncertain benefits for a limited number of people. The fact that Detroit even wants to compete for one of them suggests the city is doing something wrong.
Mayor Mike Duggan and the City Council must come to terms with the reality that federal government intervention is not by itself a means to an end. Detroit has the power to dispense powerful incentives to encourage risk-takers to put their energy, ideas and venture capital to work. It lacks the will.
More than a fantasy, the most dangerous aspect of Obama’s Promise Zone aid is that it encourages politicians to remain wedded to government-created dependency. That means as long as Washington keeps churning out urban programs that subsidize failure, Detroit will never see the light – or the necessity to move past the graffiti to the Promise Land.