Urban farming progress in Detroit

I have written before on this blog about the trend toward urban farming in cities around the country, where blighted neighborhoods would be converted to agricultural uses. Click here for stories related to such activity in Harrisburg, Pittsburgh , Detroit and elsewhere.

Surprisingly, progress has been made in Detroit, as a private company is spending $450,000 to purchase 1,500 parcels on 150 acres:

A private company is snapping up 150 acres on the Motor City's East End -- property where more than 1,000 homes once formed a gritty neighborhood -- and turning it into what is being billed as the world's largest urban farm. Hantz Woodlands plans to start by planting trees, but hopes to raise crops and even livestock in the future, right in the midst of the once-proud city.

Immediate plans are to demolish and clear 15 of those acres and plant 15,000 trees, with additional plans for orchards, crops and livestock in the future.

Hantz' plans on a larger scale have been stopped or delayed by municipal (and community) resistance. It is too early to tell whether environmental and title issues will delay plans for utilizing the 150 acres in this transaction.

Is this agricultural activity worth watching as a predictor of the future of Harrisburg?

Detroit debt default and impact on solvent municipalities

From Bloomberg comes the story of how Detroit's recovery plan may impact the municipal bond market throughout Michigan:

Emergency Manager Kevyn Orr’s plan to suspend payments on $2 billion of Detroit’s debt threatens a basic tenet of the $3.7 trillion municipal market: that states and cities will raise taxes as high as needed to avoid default.

Investors have viewed municipal bonds as "safe" for decades because municipal governments could always raise taxes to pay back the principal and interest.  Should local governments lose that power, local debt would be no more safe than corporate debt (probably less so - as corporations are constrained by the profit motive in their daily operations). 

Should investors lose confidence that cities can or will raise taxes no matter how much debt they acccumulate, the bond market will suffer far beyond Michigan.  Cities have incurred debt and expenses that today's economy cannot support.  Cities and other municipalities have been looking to other sources of revenue for years, as they turn their police and code officials into little more than bridge trolls. Muncipal employees (more and more) now demand money in exchange for safe passage (or permission to conduct business) instead of acting for purposes related to legitimate public safety concerns.  This trend will continue if municipalities have a harder time selling bonds.

Impairment of the bond market will also impact local officials' operation of school districts, sewer plants and public water - with resulting changes in school taxes, sewer rates and water rates.

It will take more than default by Detroit to affect local governments and local taxes in Pennsylvania.  But Detroit is not the only city that is facing or has faced these choices.  Even the federal government cannot print enough dollars to bail out every city in the country. 

Harrisburg is only a little further from the brink than Detroit.  Maybe Harrisburg can count on a massive bailout by the federal government.  Maybe it can't.  But it would be wise for local governments across Pennsylvania to consider scaling back operations and ambitious plans for sewer expansion and other adventures before they face a choice between (1) borrowing in a hostile bond market or (2) raising taxes and fees on already overextended residents. Whether a township is solvent or not, the ability to raise funds through the bond market may be seriously compromised by a municipal default by any city in Pennsylvania.

Detroit's consolidation moves forward - large areas to be demolished - urban planners watch and wait.

I have written previously on the City of Detroit's plan to downsize by abandoning large portions of the city and consolidating into a smaller area, with hopes to convert the abandoned real estate to agricultural uses.

Detroit has taken another step in this process by announcing plans to demolish 3,000 homes this summer (as part of a larger goal to demolish 10,000 homes in the mayor's first term). That the consolitation is proceeding with such major steps should interest urban observers everywhere, including those in Pennsylvania's cities. Detroit differs from Pennsylvania only by degree.

Detroit consolidation update.

Last week's story of the City of Detroit being "downsized" has been updated in The Washington Times:

Operating on a scale never before attempted in this country, the city would demolish houses in some of the most desolate sections of Detroit and move residents into stronger neighborhoods. Roughly a quarter of the 139-square-mile city could go from urban to semi-rural.

Near downtown, fruit trees and vegetable farms would replace neighborhoods that are an eerie landscape of empty buildings and vacant lots. Suburban commuters heading into the city center might pass through what looks like the countryside to get there. Surviving neighborhoods in the birthplace of the auto industry would become pockets in expanses of green.

This ongoing story is worth watching by everyone in the Eastern United States for the following reasons:

• Detroit's deterioration has advanced beyond that of other cities (including Pennsylvania cities) only by a matter of degree.
• City planners are going to make a serious attempt to implement this plan, but the result will not be picturesque farms where once stood blight.
• At some point this decade, Detroit will be mired in lawsuits related to eminent domain and the validity of disputed title claims (as well as protests, demonstrations and civil unrest resulting from forced relocations).
• It is likely that clouded title resulting from a history of tax sales has created uncertainty as to the true ownership of so much Detroit real estate (sound familiar?) and worsened the blight that this proposal is attempting to remedy.

Wherever blight and depopulation exists on a large scale, forced relocation, consolidation (and resulting litigation) will become an option for city planners.

Downsizing in Detroit

From the Detroit News comes the story of the Detroit Mayor's plan to relocate residents within the city so as to consolidate the areas in which city services are needed:

Mayor Dave Bing said Wednesday he "absolutely" intends to relocate residents from desolate neighborhoods and is bracing for inevitable legal challenges when he unveils his downsizing plan.

In his strongest statements about shrinking the city since taking office, Bing told WJR-760 AM the city is using internal and external data to decide "winners and losers." The city plans to save some neighborhoods and encourage residents to move from others, he said.

"If we don't do it, you know this whole city is going to go down. I'm hopeful people will understand that," Bing said. "If we can incentivize some of those folks that are in those desolate areas, they can get a better situation."

"If they stay where they are I absolutely cannot give them all the services they require."

There are large abandoned areas of Detroit in which empty buildings sit. Detroit's population has been cut in half since 1950. I have heard discussions of this type before in which Detroit community activists recommend that large abandoned areas be returned to agricultural purposes.

I have heard of no other city where such a plan is being attempted, but Detroit may not be the last city to try to shrink itself.

There are large areas in Harrisburg occupied only by vacant lots or abandoned buildings. Such areas will grow if the city eventually adopts a recommendation to double property taxes.

If Detroit's plan works, it may be the first successful, peaceable effort to shrink a large city in history. The plan may become a model for other major cities.

One aspect that the article does not address is the title defects resulting from tax sales. If Detroit is anything like Harrisburg, there are many properties that have been sold at tax sales, thus creating a title defect on those properties. Those properties will remain unusable even after a consolidation unless arrangements are made (either through litigation or payment) with the owners that lost the properties at tax sales. The City will have to deal with not only the current occupants, but any owner whose interest was supposedly extinguished through prior tax sales. This problem might also hamper Detroit's relocation efforts, as properties to which Detroit attempts to relocate residents might also be encumbered with tax sale related title defects.

Tax sale title defects will continue to hinder municipal efforts to consolidate or otherwise revitalize blighted areas of cities.