Detroit's Black Wealth Tax

Originally published in City Journal

To help close the racial wealth gap, slash Detroit’s confiscatory property tax rate.

Vincent Orr is building wealth the old-fashioned way: scrimping, saving, and sweating. A Detroiter and Fiat Chrysler production supervisor, Orr made his first big investment in 2017, when he bought a brick house with a caved-in roof at auction for $2,100. After months of renovations, it was ready for his mother to move in to. In 2019, he paid $1,200 for the place next door for himself and started all over again.

In addition to countless hours of labor, Orr invested $100,000 of his own money for the materials needed to rebuild his little corner of the Motor City. Taking out a loan wasn’t really an option. As he told the Wall Street Journal, “cash is king because nobody can deny you. The houses that require a mortgage, a lot of people are reluctant.”

It’s tempting, therefore, to blame Detroit’s disinvestment crisis and long decline on credit markets that have malfunctioned—perhaps due to racial prejudice. But the reality is more complicated. Even if Detroiters had full access to easy, equitable, and abundant credit, the city would still struggle to attract the tsunami of investment it needs to renew and prosper.


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