Detroit: Big Problem/Simple Solution

detroit1Detroit is broke — or maybe not, depending on what the courts say.  Either way, when you owe north of 15 billion dollars and your tax base is shrinking faster than the Donner party, legal opinions are not that relevant.  Like it or not — you’re broke.  This isn’t the first time a big city has gone under, but the interesting thing about Detroit is nobody seems all that concerned about it.  Damage Control is priority #2 right now, with Blame Allocation taking the top spot.  All over the country (and the world) journalists are acting like the high school kids they really are and airing their study hall “ain’t it awful” gossip across the media, sliced and spiced with equal parts of juvenile smirk, and “it could happen here.”  They’re kicking each other out of the way to get at the root cause of this Motor City Madness in 750 words or less and spinning it into everything from racial demographics to Henry Ford was a capitalist.  Strangely enough, though, nobody’s bothered to under-think the problem and come up with a viable solution to Detroit’s dilemma – until now.

Everybody knows that urban centres (remember when we use to call them “cities?”) are incubators for thousands of professional politicos who make their bones (sometimes literally) in civic committees and city council meetings.  These on-the-job trainees sometimes go on to bigger and better things, but normally they “Peter Principle” out and either get indicted or eventually just retire.  By way of documentation, of all the mayors, in all the cities, in the entire history of America, only Cleveland and Coolidge ever went on to become president.  Just sayin’.  Unfortunately, the demands for sound judgement put on these less than mediocre managers are usually more than they can bear.  What ends up happening is they try and do too much with too little and find themselves behind the fiscal eight ball a day late and more than a dollar short (to mix my clichés.)  To be fair, the folks who run our cities are given tons of responsibilities, not very much authority and never enough cash, so, for the most part, even the ones who are working flat out haven’t got an even chance.

I don’t know much about Mayor Bing, but Detroit is typical of this phenomenon.  However, there’s more, and it’s got nothing todetroit do with him or his predeceasers.  In the late 40s and early 50s, American cities crashed headlong into cultural change.  The result was massive internal injuries which were not treated at the time.  Basically, the middleclass automobile moved families out of the urban into the sub-urban.  Without the middle class to support them, shops, theatres, restaurants etc. closed, the tax base disappeared and whole urban neighbourhoods began to deteriorate.  Meanwhile, the new suburbanites needed more and bigger roads to get them back into the cities to work every day.  These expressways, built in the 50s and 60s, ignored natural neighbourhood boundaries (look at any map) and cut most cities to pieces.  Under the overpasses, the neighbourhoods deteriorated even further.  By the mid 70s, the middle class had vanished from the big cities, taking their tax dollars with them, and urban America was on Life Support.

The civic politicos, underachievers that they are, decided the solution to the problem was to throw money at it.  They did this — beyond anybody’s wildest expectations.  However, they made two fundamental mistakes.  One, they didn’t use any of the money they were pouring into the neighbourhoods to try and repatriate the middle class.  Thus, the problem remained, teetering on disaster, but now dependent on regular infusions of cash.  And two, the money wasn’t theirs; they’d borrowed it against a future tax base that didn’t exist.

The vicious circle of urban flight combined with financial sleight of hand worthy of Charles Ponzi, and the rest is Detroit history.

So now that we know where the swamp came from, maybe it’s time to kill a few alligators.

Don’t be over awed by the magnitude of Detroit’s debauch.  Like all things economic, the solution to this, and every other city’s financial problem, is quite simple.  Quit spending so damn much money!  Nobody — I repeat nobody — from the homeless guy on Eight Mile to Elena Ford — has ever borrowed themselves out of debt.  Here’s a tip: spend the money you have, not the money you wish you had.  What a novel idea, right?  However, sure as Michael Moore makes movies, unless Detroit and a few other places start taking this radical approach they’re going to go broke again in less than a generation — “financial creativity” be damned.

“Funky”: Kiss of Death and Yuppies in the ‘Hood

There are few words in the English language that carry the destructive power of “funky.”  Way back in the day, “funky” (or “funk” as it was called then) was a musical term.  It was urban black.  It was loose.  It was uncontrolled and it was cool.  It meant something, although most people couldn’t describe it; they just knew it when they heard it.  So much for the history lesson.  Today, funky is the kiss of death.

In every city in North America, there are brilliant little neighbourhoods.  They exist on the fringes of the bigger, more famous areas.  They’re middle ground territory, neither rich nor poor and mostly overlooked in the urban sprawl.  They have houses and apartments, restaurants and shops.  Sometimes they have schools or a theatre or maybe a gas station, but definitely a couple of corner stores and at least one old-fashioned cafe.  These are great little places and people live there — all kinds of people — grandmas and students, bosses, workers, the guy who owns the bakery, Jamal, Eddie and Suzanne.  They’re not some 50s wonderland, filled with Andy of Mayberry characters, but enough local people know each other, or recognize the guy across the street, to make them real neighbourhoods.  They’re what urban planners dream about.

These neighbourhoods go unnoticed for years.   They go about their business and never bother anybody.  Then, one day, somebody wanders by (sometimes it’s a real estate agent, sometimes it’s a journalist, sometimes it’s just somebody with a big mouth) and calls them “funky.”  As in: “3 bdrm, TLC, close to transport, all amenities, funky old-world charm” or “My companion and I dined on authentic Portuguese squid, with plenty of funky atmosphere, for half the price of an expensive downtown restaurant.”  These people think “funky” is a term of endearment.  It‘s not; it’s a death sentence.  It’s a neighbourhood killer because, in actual fact, “funky” is a polite word for gentrification.  It represents the time period between when the first upwardly mobile couple moves in and the last original inhabitant is driven out. 

There are any number of ways for this to happen, but they all basically follow the same pattern.  Brooke and Meghan* buy a house in an area that’s less than ideal, maybe even a little rundown, because they can’t afford the big prices in the tonier parts of town.  They make up for their shabby address by putting on the brag about how great their neighbourhood is.  How urban cool it is.  How it just reeks of diversity.  How Bratislav cuts his own cheese and Nahoud bakes his own biscotti.  In short, how “funky” it is.  Eventually the word gets around: that it’s not such a comedown to live east of Main Street or south of Central, and other people start buying inexpensive addresses.

Any wave in the real estate market, however small, is battle stations red alert for property developers.  They’ve long since figured out that there’s a boatload more money to be made selling thirty brand-new condos, sitting on top of four retail outlets, than there is reselling four single-family homes.  They buy the lots, tear down the houses, vertically sub-divide and parcel it all out as urban living.

In turn, concentrated population increases attract the big boy franchisers — like throwing blood into the shark bait waters off the coast of Australia.  If there be condos; there be McDonald’s, 7-11 and Starbucks.  There might not be a WalMart (urban professionals don’t like them) but at this point, it doesn’t matter.  Wai Chow’s Golden Chopstick or Bayview Meats can’t compete with Earl’s, East Side Mario’s or Flying Wedge.  These people are willing to sign long leases for big money, and local shopkeepers just don’t have that kind of coin.  They’re forced to close and the cycle continues.

Back in “the hood,” Brooke and Meghan, those two crazy kids who started the whole process, aren’t helping matters much.  They aren’t actually living in the neighbourhood.  They might physically be there, but so what?  They don’t work there.  Their kids don’t go to school there.  They don’t ride the bus or shop on their way home.  In fact, they never consistently patronize the local merchants, at all.  They drive in and out of the neighbourhood every day for months, perhaps years, basically waiting for their generic world to catch up to them.  Their furniture is Ikea, their home renovations are Home Depot, their toilet paper is Costco and their gadgets are Future Shop.  When the bakery and the drugstore close, they play “ain’t it awful,” but it never occurs to them that they are the ones who don’t buy doughnuts or have their prescriptions filled.  And as every new Brooke and Meghan move into the neighbourhood, the problem accelerates.  Local merchants can’t pay their ever-expanding rents or taxes on an ever-decreasing customer base, and the developers pick them off, one by one.  At this point, Brooke and Meghan discover the new Starbucks or whatever and start actually hanging around, meanwhile, telling everybody they and their neighbourhood (it’s become their neighbourhood now) are uber-cool.  More people move in; more people move out.  Years pass, life goes on and the city digests the remnants of what was once a nice, vibrant place to live.  More corporations; less local ownership. Civic officials shake their heads and wonder what the hell went wrong.  They consult city planners and urban geographers to see how to artificially create socially and economically mixed neighbourhoods.  They fail.

 Just a bit of advice: if anybody calls your neighbourhood “funky,” run!  It’s a trap.

*Brooke and Meghan’s names have been changed to protect the guilty.