Is Detroit fixable? How would you fix it?

[Wonkish1]

Wholeheartedly agree.  But the council has the ongoing view that anytime somebody outside of Detroit tries to step in and help, that they're trying to take control away from the black population and have some kind of white takeover.

This is very true actually! A very wealthy businessman approached Detroit and offered to donate 10s of millions of dollars of his own money to help set up Charter Schools in the city. He was turned down because he was threatening "the black power structure" of the city.

[Wonkish1]

I don't see why this is such a bad thing. I prefer, as a rule, local control to Federal control; but as a corollary to this I prefer local control to any other control. The same principle that argues against accepting Federal charity also suggests it's generally a bad thing for locales to become reliant on private charity. "Up by the bootstraps" ought to mean just that, as hard a road as that can be to walk sometimes.

Wow that isn't very bright response. Detroit spends about $30k per student which is among the absolute highest among the country and only about a 1/4 of the students graduate on time. A wealthy man offers to donate a bunch of money to create a few more schools(and not change the existing schools at all) so that there may be a little more competition and the city refuses it on the grounds that it would "disrupt black power"*(more like our friends are administrators and are pocketing all of the money) is a joke. And your agreement with that decision is a joke.

[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.


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).

But to be clear an oversupply of housing is not a bad thing when your experiencing a rebound. The reason being is that it will keep a substantial part of cost of living(housing) near rock bottom in the city for a long time. That is just the kind of financial calculation many people will make if Detroit turns around. Assuming things turned around buying a fixer upper for $10k is just the type thing that could put someone over the top in picking Detroit in lets say several years down the road.


From my perspective, you have to look at what depresses businesses from showing up to an area the most and that is first and foremost crime. When you get to a level of very high crime in certain areas it is like a dead weight on a local economy on a scale that incomparable to anything else. So my priority number 1 would be to pay any amount of money that would be enough to get Chief Bratton. I may not necessarily be the greatest believer in "broken window theory", but it doesn't matter the guy is a very effective police chief and the best police management is needed in Detroit.

I would transfer the entire school district into receivership with the state running it and slash the budget because there is no way the state would do worse than the city with even half of the per child budget they currently use(and it would still be double the national average). And I would literally gut the entire non police work force down to a tiny, tiny fraction of what it is now.

With a balanced budget from the savings and a huge extra amount left over I would drive all of the extra money into the police and law enforcement technology, and literally break the back of the Detroit criminal underworld. For those that say legalize certain drugs in the city, fine. But for every law that stays on the books you literally just crush the criminal world.

Once the area becomes safer and given the rock bottom commercial real estate prices and a large population that is unemployed the first businesses will move in seeing a low cost business opportunity(will be able to pay them low wages given the amount of unemployment and property costs will be next to zero), and these are the same businesses that wont touch a neighborhood where rampant drug dealing and an occasional murder is happening.

[Wonkish1]

My suggestion would simply be to eliminate that spending on education and be done with it, not try to plug the holes in funding for education with private donations that do nothing to fix the crux of the problem. Throwing money at the problem, no matter where the revenue comes from, does nothing to repair the absolutely broken public education system.

And I have no problem with 'black power', so long as that power isn't reliant on a State subsidy.

Good answer! Again I don't think you or I exactly know the terms of the deal to begin with. Just pointing out that allowing for an alternative system to compete that doesn't have corrupt administrators siphoning off all of the money is probably a good thing.

[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.

[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.

[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.

[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.

[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.

[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.

[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.

[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.

 ^^^^^^^^^^^^^
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.

No they wouldn't have seized on it when there primary goal is to engage in corruption not benefit the people of the city.

[Wonkish1]

Detroit doesn't have a housing stock; it has a collection of ruins in which people (regrettably) live. The city, as defined by its official boundaries, is dead and can't be saved. The old planning jargon for such places was 'obsolescence', and it captures the problem pretty well. Of course that was a term that was only ever applied to specific districts, whereas with Detroit...

The notion that Detroit doesn't have an overabundance of nondilapidated housing stock as well is absurd. They have an abundance of both. So in the future if Detroit ever halts its decline and starts growing again there will be cheap options in both well maintained property as well as a large quantity of even way cheaper fixer upper property. And if a lot of places get torn down to be replaced with apartment complexes, condos, or new homes that's fine too.

Edit left out the non!

[Wonkish1]

I do find the incredible faith here in half-baked piecemeal boilerplate (whether partisan or the classic American delusion of 'good government' as a solution to anything) solutions to be quite sweet. Even if there is the crazy logic of a Khrushchev-era Soviet planner lurking (to your surprise, not doubt, as well as mine) lurking, surreally, in the background.

The notion that Detroit doesn't have an overabundance of dilapidated housing stock as well is absurd. They have an abundance of both. So in the future if Detroit ever halts its decline and starts growing again there will be cheap options in both well maintained property as well as a large quantity of even way cheaper fixer upper property. And if a lot of places get torn down to be replaced with apartment complexes, condos, or new homes that's fine too.

Detroit certainly has houses. It's just that no one in their right mind would ever want to live in one.

What is wrong with you? First your post about good governance and Khrushchev make no sense relative to my post.

Further more to make a blanket statement like the entire metro of Detroit doesn't have any homes worth living in just shows that your a very ignorant person living on the other side of the pond.

[Wonkish1]

I do find the incredible faith here in half-baked piecemeal boilerplate (whether partisan or the classic American delusion of 'good government' as a solution to anything) solutions to be quite sweet. Even if there is the crazy logic of a Khrushchev-era Soviet planner lurking (to your surprise, not doubt, as well as mine) lurking, surreally, in the background.

The notion that Detroit doesn't have an overabundance of dilapidated housing stock as well is absurd. They have an abundance of both. So in the future if Detroit ever halts its decline and starts growing again there will be cheap options in both well maintained property as well as a large quantity of even way cheaper fixer upper property. And if a lot of places get torn down to be replaced with apartment complexes, condos, or new homes that's fine too.

Detroit certainly has houses. It's just that no one in their right mind would ever want to live in one.

What is wrong with you? First your post about good governance and Khrushchev make no sense relative to my post.

Further more to make a blanket statement like the entire metro of Detroit doesn't have any homes worth living in just shows that your a very ignorant person living on the other side of the pond.

I'm not sure what he was going for with the Kruschchev part but I don't think he said (or meant) in the entire metro Detroit area. But, I doubt you'd find very many of the vacant homes in Detroit worth living in at the moment. You would need to invest a considerable amount of money to make them so.

Most of the land in the inner-cities is already very, very cheap. For example, in 2008, the median house sale price in East Cleveland was a whopping $20,000. In 2008 we had over 1,400 houses sold for less than $1000 in Cleveland and East Cleveland and 133 sold for $1.

There certainly are some houses worth saving—and people buy them and save them. But, the problem is not that the city is buying and demolishing too many houses. The city can’t keep up with the need to demolish them. If you have a desire to buy a cheap house and do something with it, go right ahead. You’ll find there aren’t many people in line.

What's the point of demolishing them? Because they are an eye sour? That isn't a good enough reason to spend money demolishing property.

I bet the reason why you're seeing a lot of property not being able to sell is because the city is probably refusing to lower to the tax assessed value down to the sale price(its real value). So if I buy a house for $100 and its tax assessed value is $20k then the property taxes on the investment are the problem not the initial purchase price.

[Wonkish1]

What's the point of demolishing them? Because they are an eye sour? That isn't a good enough reason to spend money demolishing property.

That's a fantastic reason to spend money demolishing property, but more importantly, these properties are uninhabitable.

By all means, invest in these properties if you think it will pay dividends, but be prepared to plant crops.

An eye sour is a reason to spend money to demolish them? Detroit has bigger problems than eye sours. That instead would be a luxury of a city that had a lot of things going right for them.

Even if their uninhabitable it still doesn't mean that you should use tax payer dollars to demolish them.

If an investor wants to pay the money to demolish them let them do it.

[Wonkish1]

The point of tearing them down isn’t just to remove an eyesore. Abandoned houses breed crime by providing an ideal location for squatters, junkies, drug deals, etc. There have been studies that have shown crime rates are affected by the presence of broken down houses. Have you ever heard of Broken Windows Theory?

The property tax re-assessments might in theory be a good idea, and perhaps it could be done in Detroit, although it would not work in Cleveland because the public story line would immediately become that someone connected to public officials doing the purchasing (we’ve had plenty of scandals along these lines in recent years—our county government is a mess). The city has offered tax abatements in the past to those building houses in the city and there are a few pockets where this has been successful, but it has failed to reinvigorate most of the neighborhoods.

I posted broken window theory on this thread about 2 pages prior. I tend to think that a dilapidated house can only breed crime to the extent that there is a lack of police. And I also point out that without enough police even an area with a lot of bulldozed property can have high crime as well. The people will just squat in the few homes that weren't bulldozed.

The problem lies with the lack of law enforcement capable of patrolling and making arrests and equally important whether or not they make arrests of people like crack heads, meth heads, etc. who police officers normally avoid because they don't know what to do with them given that they are a financial loser to the city and aren't dealers themselves.

[Wonkish1]

The point of tearing them down isn’t just to remove an eyesore. Abandoned houses breed crime by providing an ideal location for squatters, junkies, drug deals, etc. There have been studies that have shown crime rates are affected by the presence of broken down houses. Have you ever heard of Broken Windows Theory?

It's not just that, too; keeping people spread out means you have to waste a lot of money on police/fire protection, buses, streetlights (oh wait, those are being privatized), etc. that you wouldn't if people were actually at a reasonable density for an inner city.

What does tearing down homes have to do with density?

[Wonkish1]

The point of tearing them down isn’t just to remove an eyesore. Abandoned houses breed crime by providing an ideal location for squatters, junkies, drug deals, etc. There have been studies that have shown crime rates are affected by the presence of broken down houses. Have you ever heard of Broken Windows Theory?

It's not just that, too; keeping people spread out means you have to waste a lot of money on police/fire protection, buses, streetlights (oh wait, those are being privatized), etc. that you wouldn't if people were actually at a reasonable density for an inner city.

What does tearing down homes have to do with density?

Because you can convert the land that the abandoned homes are sitting on to something that requires less patrolling and less fire protection;
____
not to mention there are always the one or two holdouts on each street who insist on staying (probably because they can't find anything better, given that Detroit is, well, Detroit) and therefore need all those services.

That has nothing to do with density.

Exactly and you can't force them off their property. That is why bulldozing property isn't going to affect density. It only knocks out a few homes in each neighborhood. The ones that have a non falling apart home aren't moving.

[Wonkish1]

How would I fix it:

Again.  When I've actually spoken to people that have lived in Detriot regardless of race they like the place.  Granted those people were all highly educated so I don't know what the poors think.  I would be much more intrested in people explaining to me why so many people like the place vs just repeating an uninformed stereotype.

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.

Houses have been selling for $100 a pop in Detriot for years.  The market resembles the pink sheets.  Plenty of low price trades but no real bargains.

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.

That's the real problem. 

Maybe I should just plan on snatching up a body guard and go up there for some research then. They better have lowered the tax assessed value to the floor the actual value is these days. Because if the tax assessed value is still over $10k I'm passing on these. To much time to bleed property taxes on an investment that may only sell way down the road for a respectable price.

[Wonkish1]

It does, because if you have many occupied homes, you have high density.  If you have many abandoned homes and few occupied homes, you have low density.  If you have no homes, you have no density.  You might as well get rid of the problem areas until you're ready to put new things there.

Density is the quantity of people within a particular space. So for example density is the number of people in 1 square mile.

If you bulldoze the homes that are unoccupied and the city has taken over because of failure to pay property taxes it doesn't affect the people living in the other homes in the neighborhood. All you get is large spaces between occupied homes.

The government can't take over owned property to bulldoze it and not do anything with it. So bulldozing this lot or that lot or that lot isn't going to affect density at all.