Monday, December 20, 2010

The Benefits of the Detroit Works Project

Mayor Dave Bing
I posted previously about Mayor Dave Bing's plan to encourage Detroiters to consolidate our population into smaller, denser communities, which is commonly known as the Detroit Works Project. Specifically, I wrote about some of the things that DWP will not accomplish. In this post, I would like to discuss the positive things that this will bring about.

I believe that the Detroit Works Project has the potential to stimulate new retail businesses and, as a result, create new jobs for Detroiters. I also believe that it will help to focus the limited efforts of our state and local governments and make the charitable foundations more effective.

The cornerstone of the Detroit Works Project is increasing population density in targeted neighborhoods. More people living in a given area mean more potential customers for local businesses. More potential customers for local businesses, in turn, invariably results in more businesses opening and remaining open in those areas. It also means that existing businesses will be able to expand their operations as their customer base grows.

As additional retail businesses open in our neighborhoods, it will also mean new opportunities for other businesses that cater to retailers. Bars, restaurants, and stores, for example, all need insurance for their business as well as tax and legal services. This creates new opportunities for insurance agents, accountants, and attorneys.

Each of these areas of development bring with them new jobs for Detroiters as well as additional tax revenue for our local government. As one examines the current state of Detroit, it is hard to escape the fact that Detroit is in desperate need of both of these things.

In addition to these benefits, there is also the fact that the Detroit Works Project brings about the ability for the limited efforts of our state and local governments to become more focused and for charitable foundations to be before more effective.

The Street Maintainance Division of Detroit's Department of Public Works, for example, has a relatively small budget that is less than 1% of the general fund. If its efforts are spread across the full 138.8 square miles of our city, its limited efforts are hardly noticeable. However, when these efforts and the efforts of similar government agencies are focused on a targeted area, one begins to see tangible results quite quickly. Our budget for street maintainance won't get any larger, but its impact will be stronger.

Similarly, the impact of the various charitable foundations will be much stronger if their efforts are targeted towards key geographic areas. While it isn't necessary that private charities focus their efforts in the same areas that are targeted by government, doing so does produce the strongest potential benefit.
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