Building on my post discussing the role of eminent domain abuse and the destruction of property rights in helping to cause the decline of Detroit, economist David Henderson has an interesting discussion of how “urban renewal” condemnations in the 1960s helped cause the massive 1967 race riot that most believe was a major milestone in the city’s deterioration. The use of eminent domain to forcibly uproot poor African-Americans had destroyed previously cohesive communities where social ties could forestall civil disorder or at least limit its scale. Henderson notes that one of the few poor black neighborhoods in Detroit to avoid large-scale rioting was also one that had managed to avoid urban renewal takings in earlier years. Residents of that area had previously banded together to form a a neighborhood block club, which in 1967 played a key role in preventing violence from spreading to the area. Urban renewal takings had undermined such civic society organizations in other parts of Detroit’s inner city.
Meanwhile, Shikha Dalmia discusses the role of Detroit’s deleterious policy of favoring big business interests, while at the same time harrassing and driving away smaller businesses with burdensome regulations:
Every mayor for the last two decades has tried to jump-start Detroit by reviving its crumbling downtown. In the 1990s, Dennis Archer erected stadiums and casinos. His successor, Kwame Kilpatrick (who was convicted on federal extortion and racketeering charges) hosted mega events.
The current mayor, Dave Bing, has been too bogged down in Detroit’s fiscal quagmire to propose anything grand. But a group of rich investors led by Dan Gilbert, owner of Quicken Loans, is spearheading a massive effort to bring businesses, hotels and residents into the city.
Gilbert has pumped close to $1 billion to relocate his headquarters in Detroit and scoop up real estate for stores, hotels