in 150 years after fossil fuels run out and the economic model becomes smaller-scale, cities like Detroit that are on large bodies of inland water with access to other inland ports will have a revival.
The article says $48,000 in unpaid property taxes were owed over 9 properties. That comes out to $5333 in taxes per property. If you assume a 2 per cent property tax, that means these houses were assesed at over $266,000. From the looks of these houses and considering its Detroit, I doubt they were ever worth that, much less during the Great Recession.
Could insane property taxes be part of whats leading to the blight in Detroit ? We already see that happening to a lesser extent in Jersey where high taxes are depressing demand.
The article says $48,000 in unpaid property taxes were owed over 9 properties. That comes out to $5333 in taxes per property. If you assume a 2 per cent property tax, that means these houses were assesed at over $266,000. From the looks of these houses and considering its Detroit, I doubt they were ever worth that, much less during the Great Recession.
Could insane property taxes be part of whats leading to the blight in Detroit ? We already see that happening to a lesser extent in Jersey where high taxes are depressing demand.
I would guess that those are accumulated taxes over a period of time
The biggest challenge to U.S. cities is to reduce property taxes to encourage people to live in and sustain a city.
It is not unreasonable to say that the property taxes are a big cause of the blight because as corporations leave an area property taxes rise to a tipping point where future investment in a home does not make fiscal sense. The investment it would take to fully restore a home is not worth it so the property is usually rented which in most cases causes a more rapid decline.
The property taxes are high enough to discourage future investment in the property causing a "rental" community which doesn't last long.
Property taxes? Definitely plays a part, as does poor Goverment
But these two factors are IMO the problem:
1) Between December 2000 and December 2010, 48 percent of the manufacturing jobs in the state of Michigan were lost.
2) Less than half of the residents of Detroit over the age of 16 are working at this point.
If you get a chance watch Anthony Bourdain's Doc about Detroit
with the transformation of Manhattan into a playground for the rich. Both coincide with the decline of American manufacturing and the rise of finance to a dominant position in the U.S. economy.
I doubt American heavy manufacturing is ever making the kind of comeback that would make Detroit surge to what it was (Robotics have already changed manufacturing, 3D printing will change it more). Detroit is probably going to shrink more before it grows again.
I'd shrug and chalk all that up to free markets, but I really don't think markets are all that free. Lots and lots of government subsidies abroad, lots and lots of market manipulation at home.
Banks & FHA lose because of people walking away from their houses?
The City Government must have had tremendous layoffs in police, teachers and other municipal employees.
with the transformation of Manhattan into a playground for the rich. Both coincide with the decline of American manufacturing and the rise of finance to a dominant position in the U.S. economy.
I doubt American heavy manufacturing is ever making the kind of comeback that would make Detroit surge to what it was (Robotics have already changed manufacturing, 3D printing will change it more). Detroit is probably going to shrink more before it grows again.
I'd shrug and chalk all that up to free markets, but I really don't think markets are all that free. Lots and lots of government subsidies abroad, lots and lots of market manipulation at home.
Actually, I'd say the desire to have a secure asset (housing) inside the US is an even more important factor in the transformation of Manhattan. A Russian oligarch can know that his Manhattan (or Brooklyn) coop or townhouse can not be expropriated on the whim of Putin. If he(she) can get out of Russia they have a nest egg, and sometimes a $20 million nest egg. The same hold true for citizens of the Middle East and South America, although the South Americans buy heavily in Miami as well.
Ironically, while this supercharges NYC housing prices it can create a revenue problem for the city. NYC taxes are much more heavily reliant on city income taxes than property taxes when compared to most cities. If these wealthy property owners do not reside in the US/NYC for at least 180 days per year they don't have to pay income taxes.
that was a great episode, especially the views that showed complete blocks deserted and the points made about people in those areas having to travel miles to get to a decent food store (although they had liquor stores within close range).
He also nailed one of the keys for the deterioration - the middle class migration out of the city.
as the reason for Detroit's collapse compatible with the reason being the loss of industry? Wouldn't that imply that the middle class people who left are still employed?
had already left. Once the middle class packed up and went, it left behind the poor who chose to not maintain properties and allowed the residential areas to rapidly decline.
Industry leaving was a main factor in starting the decline - the middle class migration sped it up.
RE: So, how is middle-class migration to the suburbs
as the reason for Detroit's collapse compatible with the reason being the loss of industry? Wouldn't that imply that the middle class people who left are still employed?
Bill - The middle class migration out started after the riots in the 60's, before the major losses of industry and jobs. Neighborhood weren't abandoned at that point, but deterioration had begun, and gained momentum for the last 25-30 years. Of course you could also throw in corrupt city government pre-Bing and mismanagement of the city worker health and retirement plans as well.
njm is correct too. Some middle class left after riots, but industry had already started the move to the suburbs as well. Then in the late 80's and early 90's industry's death knell happened and then the remaining people fled.
Yeah, I guess I was trying to reconcile movement out with job loss.
I mean, I can see the middle class moving out because of city mismanagement, taxes, whatever and the city would die. But then you could easily ascribe it to the city itself because the region would not have lost people because the industry was still there. You would end up with sort of a doughnut of economy. But if the industry goes and there city fails as a result (or on its own in conjunction) then I would think that you see migration, not out of the city, but out of the region and you'd see a poor economy across the entire area. Which sort of goes to my earlier question as to how they can support 4 major professional sports teams.
saw similar things happen. take Cleveland for example. But they went through gentrification and ended up cleaning things up to attract the younger, middle class back. Because of the corruption and mismanagement, Detroit didn't do that, and now I believe it is too late to try and do it.
There was such a lack of order at almost all municipal levels that in retrospect, a collapse was probably the only possible outcome.
was an industrial city. It's where Huron and Erie meet which was perfect for transporting iron ore from the Mesabi Range, oil from Ohio, and coal from West Va., PA, and Kentucky.
In the early 60's, Detroit had the highest per capita income in the country. In many ways, it was the leading city in the nation.
The problem is that having the world's reserve currency is at odds with being an industrial nation because reserve currencies give advantages to consumption industries and disadvantages to production industries. Ever wonder why Birmingham, England is no longer a world-leading industrial town?
Mismanagement, riots, and suburbs are all contributing factors but the most important factor has been the loss of our industrial base and that's due to the dollar. Detroit offers few benefits as a services producing town.
If we ever return to our industrial roots, Detroit is the place to start.
that was a great episode, especially the views that showed complete blocks deserted and the points made about people in those areas having to travel miles to get to a decent food store (although they had liquor stores within close range).
He also nailed one of the keys for the deterioration - the middle class migration out of the city.
Yeah you would never have thought a Foodie show would have done such an excellent job illustrating how far that city has fallen
Los Angeles...Back in the 50's and 60's LA was a very large part of American manufacturing. People moved there for the jobs that just disappeared in a matter of 2-3 years
Could insane property taxes be part of whats leading to the blight in Detroit ? We already see that happening to a lesser extent in Jersey where high taxes are depressing demand.
Could insane property taxes be part of whats leading to the blight in Detroit ? We already see that happening to a lesser extent in Jersey where high taxes are depressing demand.
I would guess that those are accumulated taxes over a period of time
It is not unreasonable to say that the property taxes are a big cause of the blight because as corporations leave an area property taxes rise to a tipping point where future investment in a home does not make fiscal sense. The investment it would take to fully restore a home is not worth it so the property is usually rented which in most cases causes a more rapid decline.
The property taxes are high enough to discourage future investment in the property causing a "rental" community which doesn't last long.
1) Between December 2000 and December 2010, 48 percent of the manufacturing jobs in the state of Michigan were lost.
2) Less than half of the residents of Detroit over the age of 16 are working at this point.
Detroit; Parts unkown - ( New Window )
I doubt American heavy manufacturing is ever making the kind of comeback that would make Detroit surge to what it was (Robotics have already changed manufacturing, 3D printing will change it more). Detroit is probably going to shrink more before it grows again.
I'd shrug and chalk all that up to free markets, but I really don't think markets are all that free. Lots and lots of government subsidies abroad, lots and lots of market manipulation at home.
The City Government must have had tremendous layoffs in police, teachers and other municipal employees.
I doubt American heavy manufacturing is ever making the kind of comeback that would make Detroit surge to what it was (Robotics have already changed manufacturing, 3D printing will change it more). Detroit is probably going to shrink more before it grows again.
I'd shrug and chalk all that up to free markets, but I really don't think markets are all that free. Lots and lots of government subsidies abroad, lots and lots of market manipulation at home.
Actually, I'd say the desire to have a secure asset (housing) inside the US is an even more important factor in the transformation of Manhattan. A Russian oligarch can know that his Manhattan (or Brooklyn) coop or townhouse can not be expropriated on the whim of Putin. If he(she) can get out of Russia they have a nest egg, and sometimes a $20 million nest egg. The same hold true for citizens of the Middle East and South America, although the South Americans buy heavily in Miami as well.
Ironically, while this supercharges NYC housing prices it can create a revenue problem for the city. NYC taxes are much more heavily reliant on city income taxes than property taxes when compared to most cities. If these wealthy property owners do not reside in the US/NYC for at least 180 days per year they don't have to pay income taxes.
He also nailed one of the keys for the deterioration - the middle class migration out of the city.
Industry leaving was a main factor in starting the decline - the middle class migration sped it up.
Bill - The middle class migration out started after the riots in the 60's, before the major losses of industry and jobs. Neighborhood weren't abandoned at that point, but deterioration had begun, and gained momentum for the last 25-30 years. Of course you could also throw in corrupt city government pre-Bing and mismanagement of the city worker health and retirement plans as well.
There was such a lack of order at almost all municipal levels that in retrospect, a collapse was probably the only possible outcome.
In the early 60's, Detroit had the highest per capita income in the country. In many ways, it was the leading city in the nation.
The problem is that having the world's reserve currency is at odds with being an industrial nation because reserve currencies give advantages to consumption industries and disadvantages to production industries. Ever wonder why Birmingham, England is no longer a world-leading industrial town?
Mismanagement, riots, and suburbs are all contributing factors but the most important factor has been the loss of our industrial base and that's due to the dollar. Detroit offers few benefits as a services producing town.
If we ever return to our industrial roots, Detroit is the place to start.
He also nailed one of the keys for the deterioration - the middle class migration out of the city.
Yeah you would never have thought a Foodie show would have done such an excellent job illustrating how far that city has fallen