It seems that even municipal insolvency needs a marketing campaign these days. At a press conference following last week’s bankruptcy announcement, Detroit and Michigan officials stood in front of banners with a sunny image of the city skyline and a slogan: REINVENTING DETROIT.
It’s not overwhelmingly original, but it is accurate. Even after Detroit works out its current obligations to pensioners and bondholders in the courts, the city will need to seriously rethink the way it functions to have any hope of long-term prosperity.
There’s been no shortage of commentators who have pounced on this idea, saying Detroit should reinvent itself as a model city for urban farming or “right-size” to become ultra-dense and walkable by abandoning outer neighborhoods. Some have even proposed giving Detroit to Canada, assuming Canada would want to take it.
But today’s news of a new study on economic mobility from researchers at Harvard and Berkeley shows that effective solutions could be far simpler.
The study, which found Detroit to be below average in the likelihood of its citizens experiencing upward mobility, establishes several commonalities for governments that do it well. Mixed-income neighborhoods, strong civic engagement, and good schools and public transportation are all elements of environments that allow poor people to become middle- and upper-middle class.
So while right-sizing and urban farming are both interesting proposals, it’s clear there are several far more practical solutions Detroit could seek to get itself back on its feet post-bankruptcy. Here are four relatively quick fixes:
1. Implement “tax choice”
It goes without saying that Detroit is a city with a governance problem.
But the issues run deeper than graft or partisanship. The fundamental social contract between city and citizen doesn’t really exist in Detroit anymore.
A Detroit News investigation in February found that for 47 percent of the taxable properties in the city, the owners simply had not paid the tax they owed in 2011, apparently aware that the city didn’t have the resources to force them.
And who can blame them for not wanting to pay up? Former mayor Kwame Kilpatrick hosted lavish parties at the executive mansion, awarded city contracts to friends and family, and fired a deputy police chief who tried to investigate his actions. Even under the new mayor, record-keeping in some city departments is virtually nonexistent. Last month, the city council president simply stopped showing up for work, forcing the emergency manager to strip him of his post and salary.
Consequently, Detroit’s leaders are going to have to regain their constituents’ trust at the most basic level after coming out of bankruptcy. And in light of the Harvard-Berkeley study, which emphasized the importance of civic engagement, getting Detroiters to regain faith in the municipal government will be especially important post-bankruptcy.
The city should start making amends with its taxpayers by letting them choose where to direct their tax dollars.
This is not as radical an idea as it may sound. A study by a professor at the University of Pittsburgh found that giving citizens some measure of choice in directing their tax dollars made them feel more satisfied with paying taxes overall.
Moreover, it already exists in the form of “participatory budgeting” in hundreds of municipalities around the world. It’s been implemented in Porto Alegre, Brazil—a city twice Detroit’s size—and on a limited basis in some New York City council districts.
Detroit’s system could be even more formalized. The city could send residents an annual “ballot” indicating the tax owed, with programs listed line-by-line among which they could divide the money.
That way, Detroiters could direct their taxes to whatever they felt needed the money most urgently—whether it be fixing potholes or fixing schools.
Perhaps more importantly, being given a say in where their money goes will help restore Detroit citizens’ basic faith in the municipal government.
2. Reinstate the residency requirement
Another finding of the Harvard-Berkeley study was that cities with mixed-income neighborhoods tend to feature greater economic mobility.
This is a particularly vital issue in Detroit, where the median household income is among the lowest in the country, at about $26,000 per year.
Many strategies exist to combat this kind of concentrated urban poverty, from jobs programs to tax credits for buying real estate in the city. A Department of Housing and Urban Development program called HOPE VI, which ended just a few years ago, has been credited with reducing crime by replacing the country’s worst inner-city housing projects with mixed-income housing.
Detroit should no doubt examine all of these options, and ideally the federal government would renew the HOPE program. But there is a simpler step Detroit can take that will set a good example and encourage more broad-ranging reforms in the future.
Make Detroit city workers live in Detroit.
It might come as a surprise that this isn’t a requirement already. In fact, the current trend is to lift such residency restrictions (currently, police unions in Milwaukee and Pittsburgh are fighting to end them).
Detroit eliminated its residency rule for city employees in 1999. Today, 53 percent of police officers live outside the city limits.
There are both practical and ideological reasons for re-implementing the policy. In terms of emergency services, requiring city residency would reduce Detroit’s notoriously bad response times in major incidents where emergency workers are called on-duty from home.
The city would also expand its tax base, and suburban municipalities would no longer be able to reap tax dollars from salaries funded by Detroit taxpayers.
Moreover, a residency requirement would mean city workers would have a personal stake in the work they’re doing, from fighting crime to keeping the streetlights on.
If the city provided a short-term incentive in addition to the requirement (guaranteeing a favorable mortgage, say, or paying rent on a city worker’s apartment for a certain number of months), the long-term benefits would be immeasurable.
3. Incentivize land-use transfers
A residency requirement would be especially vital given that Detroit hasn’t had any help from its suburbs—generally much whiter and much wealthier—which see no incentive in helping out the dying city fiscally.
Michigan law, however, provides for a system that just might entice the state’s better-off towns and cities to invest in Detroit.
It’s called a 425 agreement, so-called because the Michigan legislature enacted it in 1984 as Public Act 425. The law allows one municipality to temporarily transfer control and jurisdiction over a plot of land to another municipality for up to 50 years “for the purpose of an economic development project.”
The latter municipality provide services like sewers and ambulances; in exchange, it has an incentive to develop the land because it can then keep a percentage of the tax revenue—revenue collected on land that it doesn’t technically own.
The law was originally devised assuming big cities would want to develop land in smaller towns that lacked adequate infrastructure.
Now, though, the shoe is on the other foot. Detroit is the municipality that can’t afford to improve its sewers or keep its streetlights running. But it has lots of land that might attract outside investment if it could guarantee the same quality of city services that its suburbs have.
The ability for Detroit to “rent” part of its land to, say, Ann Arbor for two or three decades could very well have a positive impact—if, that is, Detroit could itself be guaranteed a cut of whatever revenue the 425 agreements brought about. Consequently, Michigan’s state government would have a role to play in approving the terms of the land transfers, perhaps even underwriting them to counterbalance the financial risk smaller cities would be taking by investing in a piece of Detroit.
4. Create a regionally focused transit system
A key point of the New York Times’s article on the Harvard-Berkeley study was the importance of good mass transit in cities with income mobility. While David Leonhardt focused on Atlanta as an example of a city with particularly poor public transportation, the same assessment applies to Detroit just as well.
Perhaps it’s not surprising that the Motor City would eschew good public transit. Improving it, however, will be essential not only to improving the lives of current Detroiters, but also to encouraging people to move there.
Transit advocates have proposed shiny new toys like a light-rail system for Woodward Avenue.
It’s a sexy subject, but Detroit’s biggest transit issue is far more mundane than a lack of trains. It’s that, for political and geographic reasons, there isn’t one single bus system serving the Detroit area. DDOT runs the buses within the city, while SMART, a separate authority, operates routes within the near suburbs and from those suburbs to downtown Detroit.
The problem with this arrangement is that many of the Detroit area’s major employment centers are actually in the suburbs, as this map from the organization Reconnecting America shows. If a commuter lives in Detroit but works in Warren or Dearborn, taking public transportation to their job requires changing bus systems at the city limits.
Of course, this isn’t a mere coincidence given the racial geography of Detroit. Like so many American cities, though, Detroit’s jobs are increasingly not in Detroit itself. Even the auto industry has largely abandoned the city–there’s only one manufacturing plant left in Detroit proper.
So while any plan to integrate the region’s transit system will likely face strong suburban opposition, it’s a fight worth having if inner-city Detroit is to have a strong future in the regional job market.
It can be fixed
Detroit is a city with unprecedented fiscal problems, but for all its issues, it isn’t post-apocalyptic. It’s still one of the twenty largest cities in the country, and despite the horror stories of entire neighborhoods becoming grassland, it’s still fairly dense.
The Harvard-Berkeley study underlines that when it comes to prosperity and mobility, the real problems with American cities are quite basic. So while radical solutions for Detroit’s future are worth considering, it won’t hurt to start with a few simple ones.