Detroit standing in way of own recovery

Jarrett Skorup

Detroit emerged from bankruptcy in 2014 and it didn’t take long for the hype to begin.

A quick search produces a multitude of state and local governments and news sites promoting “Detroit’s Comeback.” But this is nothing new: For decades, city and state officials and local leaders have projected revitalization in Motown.

In 1961, Time magazine ran an article about blight, a lack of economic growth, and other problems in the city. It quoted then-mayor Jerry Cavanagh trying to attract new industries while also instituting the city’s first income tax in an effort to bring Detroit back.

Then there was the opening of seven interconnected skyscrapers called the “Renaissance Center” in 1977. Partially funded by Ford Motor Co. — though today headquartering General Motors — Henry Ford II said, “Detroit has reached the bottom and is on the way back up.”

In 1985, it was the People Mover (Detroit’s rail system) that proponents said would “spark residential and retail projects downtown.”

When that was not enough, a two-stadium deal to move the Detroit Lions back downtown from the suburbs and give the Tigers a new home was announced in 1996. William Clay Ford, the owner of the football team, said, “It will mean a rebirth for the Lions and the city.”

Mayor Dennis Archer said Comerica Park “will help restore the excitement [of] downtown Detroit.” Today’s mayor, Mike Duggan, said then about Ford Field, “Twenty years from now when people come downtown, they will look back at this day as the turning point in Detroit’s comeback.”

The promises of resurgence continued into 1999, when plans were launched to build a headquarters for Compuware at Campus Martius. The Detroit Free-Press reported that, “officials hope the development project ... will be the rebirth of the city’s once bustling central business district.”

And then it was the Fox Theater, which was credited in 2003 as contributing to Detroit’s revival. This performing arts center downtown was restored in 1988 and designated as a national landmark shortly after. An article in these pages reported it’s “rebirth ushered in (the) city’s renewal.”

Even in 2013, shortly before the city filed for bankruptcy, an arena deal for the Detroit Red Wings combined with other development was announced. Michigan Gov. Rick Snyder said, “This is a project that will help revitalize Detroit.”

Despite these pronouncements, Michigan’s largest city has continued to decline. As these flashy projects were being touted, Detroit’s population drop was unrelenting — from 1.8 million in 1950 to 1.5 million in 1970 to 1 million in 1990 to 677,000 today.

It’s too soon to tell if the turnaround today is real. There is hype about the city seeing some substantial private investment — but job growth is lagging behind the rest of the state, with Detroit fourth from last among the 81 Michigan municipalities with more than 25,000 people.

There is a lot that can be done for the once-great city.

Most notably, the government charges too much to live there. Detroit has the highest income tax in Michigan and one of the highest property taxes for homes and businesses in the nation. Wayne County is by far the highest-taxed, tacking on extras to fund the zoo, the Detroit Institute of Arts, the community college, the jail, an intermediate school district, and other local public authorities.

This is combined with a business and regulatory environment that is the worst in Michigan (and perhaps the nation). The city requires occupational licenses for dozens of jobs that are required nowhere else, like auctioneers, landscapers, batting cage operators, and more. Business licenses are more obscene, with fees that are far above and beyond most cities — for things like a $400 “awning tax” and $1,800 valet license. It is four-and-a-half times more expensive to start a food business in Detroit than New York City.

Now that the bankruptcy has restructured Detroit’s finances, it is time to overhaul the rest of city government. Real economic growth is more than flashy headlines and public-private partnerships. If the city wants to improve, it has to get out of the way.

Jarrett Skorup is a policy analyst at the Mackinac Center for Public Policy.