Editorial: Detroit shouldn’t stunt economic growth
For a city that just emerged from bankruptcy, Detroit’s City Council has a numb sense of how best to regrow its economic base.
The council has been deliberating which version of a community benefits measure to approve for the November ballot that would require developers with major investments in Detroit, or those seeking certain tax subsidies in the city, to enter into legally binding contracts with the community to provide job opportunities and affordable housing as part of their projects.
Detroiters should be involved in the city’s resurgence, and it’s ideal if they can fill most or many of the jobs in the city. But if prospective developers are mandated to hire certain people — with no assurance those people will contain the skill sets that developer needs — they’re far less likely to dedicate to projects in Detroit, resulting in less economic activity for the city, and fewer jobs altogether.
The petitions have been community-driven, but Councilwoman Brenda Jones and others have also been involved in developing them. Several versions have been debated over the past few weeks; one targets developments that are at as little as $15 million, and an enhanced version from the council targets developments that are at least $75 million.
Community benefits agreements have been used effectively in past public and private projects throughout the city — but they’ve been entered into without force from city government. Responsible developers who wish to see their projects succeed likely know community feedback, local participation and input is critical.
For example, construction of the Little Caesars Arena and surrounding developments includes a community benefits agreement.
Major U.S. cities such as New York, San Francisco and Chicago have solicited community engagement effectively without mandates from their city governments.
In fact, Detroit would be the first major city to require developers to enter into such contracts.
But this isn’t an area in which Detroit needs to be a pioneer, particularly as its main focus right now should be attracting all the job growth and economic activity it possibly can as the city rebuilds.
With such requirements on developers and construction projects, it’s concerning that bribes, kickbacks and other forms of corruption could easily become the norm, as was part of the old Detroit.
Further, doing business in Detroit has become somewhat easier over the past several years, but still remains burdensome, unclear and therefore unattractive for many prospective developers. Adding yet another layer of bureaucracy will only further dissuade investment in the city.
Detroit has begun to rebound because individuals have been committed to the city in creative and forward-thinking ways. Their businesses — large and small — have voluntarily created new jobs for Detroiters.
Consequently the unemployment rate in the city has dropped significantly from almost 30 percent in 2010 to 9.8 percent in May 2016. That’s the first time in nearly 15 years that Detroit’s unemployment rate has been below 10 percent, according to the Bureau of Labor Statistics.
Now is not the time to turn back that kind of progress. It’s important new developments are inclusive of the communities they’ll affect, but the health of the city and its residents depend on reliable economic growth, not stagnation.