John Hantz -- a prosperous financial adviser -- founded Hantz Real Estate Ventures LLC on March 5th, 2008. Two name changes and nearly five years on, Hantz (rhymes with ants) has made a foray into urban forestry and spent a pretty penny to connect with the body politic. As a result, the Bing Administration recently agreed to the following exchange:
The city receives approximately $600,000 in cash (funds city operations for about 90 minutes), the guarantee of a $30,000,000 investment (about 50 percent the size of the Meijer Project), the demolition of dangerous, city-owned structures and the adequate maintenance of many thousands of parcels around Indian Village.
Hantz Woodlands LLC receives zoning-encumbered but full ownership of 1,956 parcels surrounding Indian Village, an option to purchase 1,000s of parcels within a mile of the project and tax credits to tear down any structures (these upfront credits offset the about $30 per parcel tax liability).
The strongest argument for the Hantz Proposal is just that -- it's a proposal. The city's 48,000 vacant parcels are in desperate need of effective management. While some Detroiters focus on the garbage and others on the newly pastoral nature of the old industrial city, the truth is that un-maintained lots in cities are a serious threat to public health and safety generally and even more so when found in concentration. It's not surprising that most people agree that the city should be quickly unloading their land assets.
This proposal for management, however, is the oligarchy solution -- give it to the rich guy, he wants it and might know what to do with it. A study of history reveals similar transactions during the breakup of the USSR.
But before we agree to Hantz's proposal on the basis of the severity of the problem, shouldn't we explore some other solutions? Here are some that come to mind:
The Community Land Trust Option
The city gives their assets in a particular area to a private entity that is bound to a set of public benefits, democratic processes, transparency standards and development targets. The entity is governed by a coalition of interested parties; community members for starters but also government leaders, farmers, academics, builders, business owners and even developers.
Community Trusts have a strong track record in Detroit, the Eastern Market Corporation stands out as a shining example.
The Way Things Usually Go in America Option
The city offers the basic deal -- lots of land for lots of management -- to the general public. This could be done by auction or through an RFP. Sell it to the highest bidder or the guy with the best plan. Detroit does this all the time.
The Homesteading Option
The city gives up title to parcels (and no taxes for five years) to anybody willing to occupy and renovate a vacant house, build a farm or build a house. Only caveat: you don't get your second parcel until you've completed work on your first.
The Respectful Homesteading Option
Same as above but ownership transfers only if all the neighbors within 150 feet agree, plus the neighbors get a five year tax break too.
The Land Bank Option
The city transfers the parcels to the Detroit Land Bank, a state authorized public authority. They auction the valuable ones and use the proceeds to maintain the blighted ones. In my opinion, they'd need to hire a really good financial adviser to make this work within the confines of the city. A similar arrangement has been regionally successful in and around Flint.
The Campus Option
The city grants land to academic institutions to conduct basic research on various city systems. Public universities and community colleges are democratically controlled and have massive borrowing power. MSU has already stepped up to the plate. Will others follow?
All in all, there are many options for the dispersal of city owned property. It has taken many decades for the city to amass its 50,000 parcels and today, the City Council and the Administration both seem to agree that it's time to sell.
The city is at a turning point and how these massive tracts of land are doled out will play an enormous role in shaping the future of Detroit. Will we be a city whose very structure pushes the bounds of human knowledge? A city that unleashes opportunity for the least of its citizens? A city where change is guided by those it most affects? Or perhaps a city where the elite extract wealth through their far-reaching property rights?
Of these options, my favorite is the Community Land Trust. Across the world and throughout history, community land trusts have an excellent track record of stewarding the earth and respecting the people that live on it. Can you say the same for oligarchs?
Note: There will be a public hearing before the Detroit City Council on this matter at East Lake Baptist Church, Monday, December 10, 2012 at 6:00 p.m.