Editor's note: A version of this article entitled "Detroit standing in way of own recovery" first ran in the Detroit News on Oct. 14, 2016.
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 with hopes of bringing Detroit back.
- In 1977, a group of seven interconnected skyscrapers called the “Renaissance Center” opened. It was supposed to lead to Detroit’s, well, “renaissance” (the mayor of Florence, Italy, the city of the first Renaissance, attended the unveiling). Partially funded by Ford Motor Company – 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 was supposed to pay for itself in just a few years and “spark residential and retail projects downtown.” Ridership numbers are low and it has long enjoyed a multimillion dollar annual subsidy.
- 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.” This was quoted in a Detroit News article entitled, “Detroit Comeback.” Detroit mayor Dennis Archer said Comerica Park “will help restore the excitement of urban living that has been missing far too long from downtown Detroit.” Then deputy executive for Wayne County, and now Detroit mayor, Mike Duggan said 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.”
- In 1999, plans were launched to build a headquarters for Compuware at Campus Martius. The Detroit Free Press reported that “officials hope the development project that borrows its name will be the rebirth of the city’s once bustling central business district."
- Fox Theater was touted in 2003. This performing arts center downtown was restored in 1988 and designated as a national landmark shortly after. A Detroit News article said it’s “rebirth ushered in [the] city’s renewal.”
- In 2007, Detroit’s three casinos – approved by voters a decade earlier – were being gushed about for their economic contribution. A spokeswoman for the Detroit Metro Convention & Visitors Bureaus said, “If you look at all the development in the last seven years, the downtown product is evolving. The casinos complete the package."
- 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 continued its long implosion – from 1.8 million in 1950 to 1.5 million in 1970 to 1 million in 1990 to 677,000 today.
The point here is not that these projects did nothing for the city or even necessarily that they were a bad idea. But it shows that economic recovery takes more than the buildings downtown.
Is it real this time? It’s too soon to tell. True, 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 city and state officials can do for the once-great city. Most notably, it is way too expensive to live there. Detroit has the highest income tax in Michigan. And Wayne County is by far the highest-taxed county, tacking on extras to fund the Detroit Zoo, county parks, the Detroit Institute of Arts, the community college, the jail, an intermediate school district and other local public authorities.
The city has the second-highest home and industrial property taxes in the nation while commercial property is taxed the highest of the nation’s 50 largest cities. And it is hard to argue that the public services citizens are getting are worth the cost.
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 almost no other city requires, like auctioneers, landscapers, batting cage operators, and more. Business licenses are even more obscene, with fees that are way 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 way more than flashy headlines and public entities partnering with local governments. If the city wants to improve, it has to do the little things right – like getting out of the way.
Permission to reprint this blog post in whole or in part is hereby granted, provided that the author (or authors) and the Mackinac Center for Public Policy are properly cited.
Permission to reprint any comments below is granted only for those comments written by Mackinac Center policy staff.