Land Use

'Just' compensation difficult to define in Detroit

The push to “shrink the footprint” in New Orleans — to slowly shut down badly blighted or hurricane damaged neighborhoods by banning development and rolling back public services — fell apart under howls of resident protest against the 2005-2006 Bring New Orleans Back plan.

In the New York Times, Harvard Economics Professor Edward Glaeser described the scenario facing Detroit Mayor Dave Bing, who hopes to implement a radical plan to reverse the decades of decline in his city.

Detroit has a large number of communities that are dominated by empty lots and vacant homes. Mayor Bing has spoken of providing incentives for the people still living in such areas to relocate, and warned them that “if they stay where they are I absolutely cannot give them all the services they require.”

For a big-city mayor to warn that some areas will be no-service zones is radical, but our country is filled with less populated areas that lack public trash removal, bus service and water provision. In a sense, Mayor Bing would just be treating the least dense areas of Detroit like those other less dense areas.

If removing a largely vacant neighborhood really generates significant gains, then some sizable fraction of those gains can be given to the citizens who will have to give up their homes. If generous payments, rather than eminent domain, are used to move the remaining residents, then right-sizing can be win-win.

But if Mayor Bing tries to do too much, too quickly, without giving enough to the residents who have to move, then right-sizing will justly be seen as yet another example of the public insensitivity and folly that has unfortunately marred too many past efforts at dealing with urban distress.

Unless Bing gets really specific really fast about the “incentives” that will be provided to property owners whose neighborhoods have crumbled around them, I suspect his efforts to cluster the population where public services can be more efficiently provided will fall short, just as efforts elsewhere have.

You can’t just offer to compensate a homeowner for their home’s market value or even 25 percent to 30 percent above it; the value of the home is already suppressed based on the city’s failure to invest in infrastructure and services around it. It has to be more worth it, both financially and emotionally, to abandon your neighborhood and uproot your life.

Only trying to compensate someone at or near market value would, I think, just exacerbate the homeowner’s sense of injustice over the officially induced factors – white flight, municipal waste and corruption, national neglect of urban communities – that contributed to their community’s deterioration in the first place. It’s not about the value that a home has; it’s about the owner’s sense of the value the home should have had.

In New Orleans, supporters of the idea that New Orleans needs to close off large areas to development in order to be sustainable over the long term were badly tainted by efforts to do so that occurred immediately after Katrina. That plans to officially close neighborhoods – even if the intent was to simply put forth a concept – were announced while the city’s residents were largely scattered from there homes was an intolerable injustice for those disproportionately affected by both the storm and by the restrictions anticipated in the restrictive recovery plan.

But soon, once federal recovery dollars have been spent and the local tax base must stand on its own two feet again, the need to efficiently distribute public amenities and disburse municipal services to the city’s population will threaten those neighborhoods anew. The short-term existential crisis has been shelved for what could be a generation of uncertainty.

Other Rust Belt cities that believe the only way to save themselves is to amputate certain residential appendages will certainly be watching how Detroit’s residents take to Bing’s initiatives once talk of relocation incentives and service deprivation yields appraisal letters and the denial of trash collection.

Bing’s vision carries a softer touch than those that would rely on eminent domain – forced evictions and demolition crews – but a plan based on market value reimbursement and property tax incentives under threat of the elimination of public amenities isn’t that much softer. It’s more like de facto eminent domain; a slightly faster starvation for neighborhoods already deteriorated by decades of perverse development incentives.

If cities are ever to successfully pull the plug on the neighborhoods they can’t (or won’t) heal, I don’t think “just” compensation will do. It will take something resembling generous reparations, something that might make an apology for quitting on an entire community, seem less insulting.

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  • JA

    Good piece. What is “just compensation”? I’m sadly feeling more certain I’m about to learn what isn’t visa v lower mid-city. Keep writing on this E!!!