Is Detroit fixable? How would you fix it?

[Wonkish1]

Look lets first establish the fact that those that have pointed out that the problems lie in that Detroit's government is a corrupt group of people that care more about taking the money out of the city and giving it their friends in patronage jobs then trying to fix anything are spot on. As long as those corrupt people are in charge this is just an academic exercise because the things that would start to bring back the city are diametrically the opposite of what is ideal for a corrupt politician.

In other words, Detroit is a microcosm of any organized polity that has a government at its head. All governments are ruled by "a corrupt group of people that care more about taking the money out of [the polity they govern]". The point is to learn how to work within those confines to maximum effect, even if, nine times out of ten, doing so requires establishing institutions which run parallel with the official State.

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I absolutely agree with you here. One thing to take into consideration is that demolition projects cost money; you can't simply go in with a bulldozer and begin shellacking houses left and right, certainly not under the present regulatory regime. I'd have no problem with the city purchasing abandoned houses and selling them at far below market value.

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And this is where we depart. Instituting a law-and-order regime on the model of New Orleans is not only not going to salvage the local economy, it's going to depress the backbone of the community - which, like it or not, has got to be the local African-American community - even further. New Orleans did not 'boom' when Bratton was in office; quite the opposite, it underwent one of the longest periods of recession in Louisiana's history. And a lot of it had to do with the basic fact that public police corruption tends to undermine faith in local institutions.

It's not going to be what you want to hear, but it's going to be what you need to hear: Detroit's population has got to find their own salvation, so to speak. I cannot fathom for the life of me why we ought to oppose urban farming schemes, for instance, particularly if it means we can reduce Federal food subsidies that much further. Importing police chiefs who have a long and storied history of corruption in order to make the town 'feel' safer for outsiders is precisely the opposite of what needs to be done - decentralize, deregulate and desubsidize must be the order of the day.

For the most part, agreed. But some are worse than others with Detroit being maybe the worst in the entire country.


I'm pretty sure most of the property they are bulldozing is property the city has taken over because of people failing to pay property taxes on it(someone correct me if I'm wrong). They just need to sell it and price the tax assessed value down to what the sale price is(which might mean only a buck per year in property tax revenues).


I generally agree with the fact that you have to decentralize, deregulate, and desubsidize, but as long as there is rampant crime there is no way most businesses are going to touch much of Detroit with a 10 foot poll. Your opinions of Bratton aside(he did very good in NYC and LA the 2 safest big cities in the US following his departures) you have to get the crime under control. Crime can depress asset prices and an economy a lot faster than any draconian taxes or regulations. And the city doesn't need to just 'feel' safer it needs to be actually safer and by a huge degree.

[Wonkish1]

One of the models I've been looking at recently is the (old) Black Panther Party. They largely opposed the welfare State, to the point that they'd harass local blacks who made it known they were on the dole. They ran local food pantries, local daycares, local classes; their most famous programme was Free Breakfast For Children. Party-line conservatives would balk, because that's what they'd do, but I'd welcome a return to that militancy among the African-American community if it meant a revitalization of that old charitably towards the idea of self-sufficiency.

I don't see a problem with that at all.

[Stardust]

This is the only real issue on which we differ, then:

I generally agree with the fact that you have to decentralize, deregulate, and desubsidize, but as long as there is rampant crime there is no way most businesses are going to touch much of Detroit with a 10 foot poll. Your opinions of Bratton aside(he did very good in NYC and LA the 2 safest big cities in the US following his departures) you have to get the crime under control. Crime can depress asset prices and an economy a lot faster than any draconian taxes or regulations. And the city doesn't need to just 'feel' safer it needs to be actually safer and by a huge degree.

I don't think that simply attracting businesses to Detroit, which has always been the product of technocratic sloganeering, is going to do much to salvage the city. The problems are rooted in the structure of Detroit's society itself. And if business is going to play a part, I'd prefer those businesses, as much as possible, to spring up organically from the pre-existing stuff of Detroit's soil.

In order to attract businesses to a city, you have to have money to burn. They're going to want subsidies. They're going to want tax incentives. They're going to want to be catered to. And Detroit can't afford that. What it can afford is to support its local businesses as much as possible, by de-networking itself from the national economy to as great an extent as possible.

"Think globally, act locally" need not be a slogan purely of the liberals.

[Wonkish1]

This is the only real issue on which we differ, then:

I generally agree with the fact that you have to decentralize, deregulate, and desubsidize, but as long as there is rampant crime there is no way most businesses are going to touch much of Detroit with a 10 foot poll. Your opinions of Bratton aside(he did very good in NYC and LA the 2 safest big cities in the US following his departures) you have to get the crime under control. Crime can depress asset prices and an economy a lot faster than any draconian taxes or regulations. And the city doesn't need to just 'feel' safer it needs to be actually safer and by a huge degree.

I don't think that simply attracting businesses to Detroit, which has always been the product of technocratic sloganeering, is going to do much to salvage the city. The problems are rooted in the structure of Detroit's society itself. And if business is going to play a part, I'd prefer those businesses, as much as possible, to spring up organically from the pre-existing stuff of Detroit's soil.

In order to attract businesses to a city, you have to have money to burn. They're going to want subsidies. They're going to want tax incentives. They're going to want to be catered to. And Detroit can't afford that. What it can afford is to support its local businesses as much as possible, by de-networking itself from the national economy to as great an extent as possible.

"Think globally, act locally" need not be a slogan purely of the liberals.

Well you end up attracting business growth organically as well. The fact that crime adds such a risk factor to enterprise that even if someone were able to build a viable business in Detroit in the current climate they would be smart to actually make any expansions somewhere else not there or even just outright move all of their operations when they could.

Also not all businesses demand subsidies and tax benefits to move to an area. That may be true of many large companies, but medium sized businesses don't demand that. Also, who's to say that a company that looks at some tax breaks and subsidies offered by another city vs. a very cheap and abundant labor force in Detroit wont still pick Detroit if the lower cost of doing business there is better than the subsidy offered somewhere else. Right now in order to invest in Detroit they have to deal with high taxes, high regulation, and a crime level that would make not even an adequately talented person willing to relocate, their theft liability insurance is probably through the roof, and the local economy is going to probably deteriorate more due to high crime causing their supply of a law abiding work force to dry up.

When crime is at insane levels you have smash it in order for business to thrive otherwise the only economic activity that will continue to thrive is illegal activities.

[Wonkish1]

I mean look at how Pittsburgh is turning around right now. That was a rust belt city that was assumed to be the next Detroit and just decay and die. But eventually the cost of doing business falls so much in an area that it begins to be an ideal place to set up shop. The low amount of high paying jobs allows you to set up and pay a bargain for wages relative to the rest of the country. Your property is super cheap and you basically have your pick of whatever you want relative to many parts of the country. The contractors that you bring in to fix up the property, bring in any machinery, etc. are all really cheap. To the extent that any of your suppliers are local they may end up being pretty damn cheap as well.

But to the extent that high taxes, regulations, and high crime are players in said city then the cheap labor, property, suppliers, etc. will not be enough to make up for the high added cost of doing business and risk that comes with high taxes, regulations, and high crime rates. And if that is the case then they'll pass and look elsewhere until either the wages, property, etc. drop so low to make up for the other factors or the city just dies.

[Okay, maybe Mike Johnson is a competent parliamentarian.]

Let's just say that looking back, perhaps Speramus meliora; resurget cineribus wasn't the best motto for this city after all.

[opebo]

It's... probably too late now.

Most definitely!  And there's an argument to be made that it is too late for the entire country.

[muon2]

I mean look at how Pittsburgh is turning around right now. That was a rust belt city that was assumed to be the next Detroit and just decay and die. But eventually the cost of doing business falls so much in an area that it begins to be an ideal place to set up shop. The low amount of high paying jobs allows you to set up and pay a bargain for wages relative to the rest of the country. Your property is super cheap and you basically have your pick of whatever you want relative to many parts of the country. The contractors that you bring in to fix up the property, bring in any machinery, etc. are all really cheap. To the extent that any of your suppliers are local they may end up being pretty damn cheap as well.

As much as Pittsburgh is a great model for reinvention, there are some significant differences. One is the role of major universities, and Carnegie Mellon and U Pitt have been major drivers for transition from heavy industry to health care and high tech. I don't see U Detroit and Wayne State in the same role.

[Brittain33]

Also, Pittsburgh has continued to decline in population, albeit not as dramatically as Detroit.

[Wonkish1]

Also, Pittsburgh has continued to decline in population, albeit not as dramatically as Detroit.

That may not be true for long!

[Wonkish1]

I mean look at how Pittsburgh is turning around right now. That was a rust belt city that was assumed to be the next Detroit and just decay and die. But eventually the cost of doing business falls so much in an area that it begins to be an ideal place to set up shop. The low amount of high paying jobs allows you to set up and pay a bargain for wages relative to the rest of the country. Your property is super cheap and you basically have your pick of whatever you want relative to many parts of the country. The contractors that you bring in to fix up the property, bring in any machinery, etc. are all really cheap. To the extent that any of your suppliers are local they may end up being pretty damn cheap as well.

As much as Pittsburgh is a great model for reinvention, there are some significant differences. One is the role of major universities, and Carnegie Mellon and U Pitt have been major drivers for transition from heavy industry to health care and high tech. I don't see U Detroit and Wayne State in the same role.

Fair point, but at some point Detroit just needs to gain some competitive advantage, anything. It doesn't have to be education driven like Pittsburgh and instead can be something like its bottom dollar for property, but it has to be something and it has to be significant enough that certain kinds of businesses can thrive there more than anywhere else.

[muon2]

I mean look at how Pittsburgh is turning around right now. That was a rust belt city that was assumed to be the next Detroit and just decay and die. But eventually the cost of doing business falls so much in an area that it begins to be an ideal place to set up shop. The low amount of high paying jobs allows you to set up and pay a bargain for wages relative to the rest of the country. Your property is super cheap and you basically have your pick of whatever you want relative to many parts of the country. The contractors that you bring in to fix up the property, bring in any machinery, etc. are all really cheap. To the extent that any of your suppliers are local they may end up being pretty damn cheap as well.

As much as Pittsburgh is a great model for reinvention, there are some significant differences. One is the role of major universities, and Carnegie Mellon and U Pitt have been major drivers for transition from heavy industry to health care and high tech. I don't see U Detroit and Wayne State in the same role.

Fair point, but at some point Detroit just needs to gain some competitive advantage, anything. It doesn't have to be education driven like Pittsburgh and instead can be something like its bottom dollar for property, but it has to be something and it has to be significant enough that certain kinds of businesses can thrive there more than anywhere else.

The problem is that cheap property can be found in lots of areas of the country. Since the recession struck commercial real estate that has been more true than ever. In order to compete there needs to be something more than the land to offer.

[TJ in Oregon]

That said those that are pointing out that the unused housing stock should bulldozed to the ground are not recommending anything that is good for the city. All of it should be sold and if that means that it is going to be sold for $1k each so be it because at least you'll have some people will have personal responsibility for that housing(and if they deem that the property is more valuable bulldozed they'll do it themselves).

I absolutely agree with you here. One thing to take into consideration is that demolition projects cost money; you can't simply go in with a bulldozer and begin shellacking houses left and right, certainly not under the present regulatory regime. I'd have no problem with the city purchasing abandoned houses and selling them at far below market value.

But this is part of the problem too: the only market for most of these buildings is absentee landlords or political cronies looking for a kickback. If you tried to sell them all, it would be difficult to find a buyer for any price. People aren't going to be lining up to purchase falling down houses stripped of copper wiring and plumbing in the middle of a crime-ridden neighborhood in inner-city Detroit. The land isn't worth the cost of tearing the houses down. Much of the unused housing stock, at least in Cleveland, already is for sale. Now, if you could circumvent some regulations and start tearing them down left and right, you could get something done. But a free market solution doesn't work if there are no buyers.

[Grumpier Than Uncle Joe]

How would I fix it:

[opebo]

How would I fix it:

Won't do any good, Gramps, if you leave capitalism in place.

[Wonkish1]

The problem is that cheap property can be found in lots of areas of the country. Since the recession struck commercial real estate that has been more true than ever. In order to compete there needs to be something more than the land to offer.

I realize that.

And keep in mind you can't find cheap property like you can in Detroit. Homes for the single Ks is a pretty hard to find to commodity.

[Wonkish1]

But this is part of the problem too: the only market for most of these buildings is absentee landlords or political cronies looking for a kickback. If you tried to sell them all, it would be difficult to find a buyer for any price. People aren't going to be lining up to purchase falling down houses stripped of copper wiring and plumbing in the middle of a crime-ridden neighborhood in inner-city Detroit. The land isn't worth the cost of tearing the houses down. Much of the unused housing stock, at least in Cleveland, already is for sale. Now, if you could circumvent some regulations and start tearing them down left and right, you could get something done. But a free market solution doesn't work if there are no buyers.

There is always a price a buyer will pay. Even if it drops down to $50 bucks a home. And spending precious city money on bulldozing isn't the answer. It accomplishes nothing.

What if someone realizes that that they may be able to buy a up large section of decent agriculture land for cheaper they can get anywhere else even including bulldozing. They could buy up 40 homes right next to each other bulldoze them all and actually have a reasonable sized chunks of land to put farms on. Or what if they determined they were going to tear it all down to put up a large storage facility up? Or what if they bought up a bunch of homes on the belief that if Detroit ever did turn around they would fix up the homes for a huge profit.

But bulldozing the property and keeping it as city property is the worst idea because bulldozing costs money and the property becomes useless in city hands.

And Cleveland needs to get real about what that property is worth(which is almost nothing) and sell it off accordingly.

[opebo]

...a free market solution doesn't work if there are no buyers.

There is always a price a buyer will pay.

Ok here is the center of your total misunderstanding of economics, Wonk.  You just go on this blind faith.  Obviously no one will buy something or even accept it for free if it doesn't make them money.   The dearth of demand is the glaring and eternal failure of the capitalist system.

[minionofmidas]

...a free market solution doesn't work if there are no buyers.

There is always a price a buyer will pay.

Ok here is the center of your total misunderstanding of economics, Wonk.  You just go on this blind faith.  Obviously no one will buy something or even accept it for free if it doesn't make them money.   The dearth of demand is the glaring and eternal failure of the capitalist system.

I'm sure there are people who'd take a house in Detroit... people currently renting in Detroit and not looking to leave the city. Provided the costs down the line - municipal taxes, minimum repairs to keep the house from falling down - don't exceed their rent.
As, in Detroit, they probably will.

[Wonkish1]

...a free market solution doesn't work if there are no buyers.

There is always a price a buyer will pay.

Ok here is the center of your total misunderstanding of economics, Wonk.  You just go on this blind faith.  Obviously no one will buy something or even accept it for free if it doesn't make them money.   The dearth of demand is the glaring and eternal failure of the capitalist system.

I'm sure there are people who'd take a house in Detroit... people currently renting in Detroit and not looking to leave the city. Provided the costs down the line - municipal taxes, minimum repairs to keep the house from falling down - don't exceed their rent.
As, in Detroit, they probably will.

Tax assessed value should drop to the purchase price when you sell otherwise you'll never sell it.

Hell if there were large sell offs of property at around $100 a piece I would be looking at buying quite a bit. The future intrinsic value of this land is worth much more than that and if it takes 20 years to realize a 80+ multiple on my investment then so be it. The return would be worth the wait.

[Torie]

Pittsburgh is inapposite largely, because it never had the degree of crime Detroit did and does, did not get its infrastructure gutted in riots driving out most businesses (Detroit has zero appliance stores in the city) and actually has many picturesque hilly neighborhoods that folks actually want to live in. It is also substantially white. The issue going forward, is will Cleveland end up more like Detroit or Pittsburgh.

Muon2, housing in Detroit is literally close to free. I don't think many places can make that claim.  The trick is to make the place, or larger swaths of it, livable for those not destitute (who are just trapped) or criminals. 

[Wonkish1]

Pittsburgh is inapposite largely, because it never had the degree of crime Detroit did and does, did not get its infrastructure gutted in riots driving out most businesses (Detroit has zero appliance stores in the city) and actually has many picturesque hilly neighborhoods that folks actually want to live in. It is also substantially white. The issue going forward, is will Cleveland end up more like Detroit or Pittsburgh.

Muon2, housing in Detroit is literally close to free. I don't think many places can make that claim.  The trick is to make the place, or larger swaths of it, livable for those not destitute (who are just trapped) or criminals. 

Bingo!

And it starts with two things. A balanced budget and significantly bringing down crime. If areas aren't safe then no one will want to engage in any legal economic activity there.

[Filuwaúrdjan]

Muon2, housing in Detroit is literally close to free. I don't think many places can make that claim.  The trick is to make the place, or larger swaths of it, livable for those not destitute (who are just trapped) or criminals. 

Making it livable would actually involve making the housing cost substantially more than present because one reason for the almost free housing is the fact that most of it is not fit for human habitation.

[memphis]

Muon2, housing in Detroit is literally close to free. I don't think many places can make that claim.  The trick is to make the place, or larger swaths of it, livable for those not destitute (who are just trapped) or criminals. 

Making it livable would actually involve making the housing cost substantially more than present because one reason for the almost free housing is the fact that most of it is not fit for human habitation.

  ^^^^^^^^^^^^^
All that free housing has long since had all the wiring ripped out for scrap, roofs caved in, inoperable plumbing. And it's impressive how quickly things decay in a humid environment with several freeze/thaw cycles each year. If there were a magic bullet, the people in charge woud have seized upon it. If not in Detroit, then in one of this nation's many urban slums. If I had too go with one thing though, it's probably crime and perception of it. Maybe the folks at City Hall could get together with the Police Department and the folks at the PR at a major company. It'd be an enormous uphill climb, obviously.

[Wonkish1]

Muon2, housing in Detroit is literally close to free. I don't think many places can make that claim.  The trick is to make the place, or larger swaths of it, livable for those not destitute (who are just trapped) or criminals. 

Making it livable would actually involve making the housing cost substantially more than present because one reason for the almost free housing is the fact that most of it is not fit for human habitation.

Yeah, but still the ability to either buy a property that is fit or buying one that isn't and throwing a good chunk of money in it will keep Detroit's housing stock extremely cheap for a very, very long time.