The city of Detroit’s Jobs and Economy Team is tasked with assisting small businesses with city bureaucracy, attracting major developments and diversifying the local economy, but it has no economists. In fact, of the city’s 9,805 full-time employees, there are just two economists—neither of whom are directly involved in economic policy.
Late last year, Citizens Research Council (CRC) issued its third and final City Council-commissioned report on economic development in Detroit. (Disclosure: I was Director of the Detroit Bureau at CRC between 2023 and mid-2024 and co-authored the reports with Eric Lupher, president of CRC.) The reports covered Detroit’s economic condition, Downtown Development Authority (DDA) and tax incentives, and included recommendations on policy—a few of which have been publicly supported by elected officials. Yet, the reports excluded recommendations on personnel, an omission that this editorial seeks to address as personnel is policy.
Economists and economic policy
Detroit should employ economists in three capacities to improve economic policy: first, the mayor should appoint a Council of Economic Advisers (CEA), second, the City Council should be provided an economic advisor, and third, University Economic Analysis Partnership (UEAP) activities should be expanded.
The president of the United States has a CEA and the mayor should establish his own. Created by the Employment Act of 1946, the U.S. CEA, as its name implies, is a three to four-member body empaneled to counsel the president on economic matters and annually produce the Economic Report of the President.
State and local iterations of the CEA are hardly unusual. Then-Massachusetts Gov. Deval Patrick established a CEA via executive order in 2008, as did California Gov. Gavin Newsom in 2020, both to seek expert advice in periods of economic turmoil. Cook County (IL) Board President Toni Preckwinkle is counseled by a CEA, as is the Mayor of Portland (OR) Ted Wheeler.
Detroit’s current mayor and his successors could similarly benefit from expert advice. It is important that the mayor’s CEA be staffed (on a formal or volunteer basis) by formally educated economists, academics, preferably drawn from local universities such as Wayne State University or the University of Detroit-Mercy. The mayor’s CEA must not become another conduit by which private developers have access to the administration.
Second, just as the mayor needs expert advice in economic matters, so does the City Council. The Legislative Policy Division is the city’s corollary to Congress’s Congressional Budget Office and is staffed by qualified individuals who provide expert advice to the council on a wide variety of public policy issues. The analytical capacity of LPD and council’s individual staff may be augmented by a contracted economic expert or economic advisory firm. Normally, such individuals or firms are hired to appraise specific projects. For example, the City of Wyoming hired Great Lakes Economic Consulting to evaluate a proposal to cut property taxes and enact an income tax. Transformative projects come before the Detroit City Council with such frequency that the council, and the residents they represent, would be well-served by expert economic advice that can be accessed on ad hoc bases.
Thirdly, economic analysis at the local level is comparatively more difficult than analysis at the state- or national-level. There are fewer economic data collected at the local level, and the data that are collected are collected less frequently, which diminishes its usefulness. The city answered these difficulties in 2019 when it established the UEAP with University of Michigan, Michigan State University and Wayne State University.
The UEAP should be continued and expanded. UEAP data and analysis should be shared, to the extent it is not already, with the mayor’s CEA and the economic adviser selected by city council. Additionally, the UEAP should present its reports to city council. UEAP reports are shared as a part of the City’s Revenue Estimating Conferences, but there should separately be a public forum in front of City Council where councilmembers may ask questions about the reports.
The city has an impressive analytical capacity in the Office of the Chief Financial Officer, but that capacity for economic analysis needs to be expanded in the mayor’s office and City Council.
Give ‘authorities’ to the people
One of the recommendations from CRC’s reports was that the city reconsider its use of Community Benefits Agreements (CBAs). Essentially, CBAs are contracts between private developers and residents who live in the immediate area of a proposed development. Private developers receive public subsidy and in return residents receive benefits paid for by private developers, such as affordable housing and fixed up recreational facilities. CBAs are the main conduit for residents to involve themselves in major projects.
Unfortunately, CBAs delay projects and are politically fractious—a paperwork tax levied in addition to the city’s already burdensome property tax. With that said, this proposal is far from a recommendation to discontinue residents’ involvement in economic development. The basis for this recommendation is that the current process is poor. Resident involvement comes too late. Instead, residents should be involved more directly and earlier in economic development. Specifically, residents should be provided board seats on the various quasi-public authorities administered by the Detroit Economic Growth Corporation (DEGC), selected via sortition, i.e. random lot—the same process by which a jury is pooled.
DEGC services the Detroit Brownfield Redevelopment Authority (DBRA), Detroit Next Michigan Development Corporation (DNMDC), Downtown Development Authority (DDA), Eight-Mile Woodward Corridor Improvement Authority (EMWCIA), Local Development Finance Authority (LDFA) and Neighborhood Development Corporation (NDC). Each entity, while serviced by DEGC, has its own board. Between these six entities, there are 66 board seats.
Generally, per state law, these board seats are appointed by the mayor subject to consent by City Council. For a number of these entities, there are requirements for who may be selected. Public Act 57 of 2018 that authorizes the LDFA prescribes that a majority of board members be property owners in the downtown and that at least one member resides downtown. Less formally, there are seats apportioned for City Council to nominate and for community members. These formal and informal rules aside, state law, for the most part, does not prescribe the process by which the mayor or council may select someone to be nominated for appointment. Here, sortition could be used by the mayor and council to select at least one-third of nominees to the boards of its various economic development entities.
Detroit residents should be randomly selected from a pool of resident-property owners, just like jury duty. More residents than seats available should be pooled, provided an education as to the authorities’ purpose and powers, and asked whether they would like for their candidacy to continue. From those volunteers, a few should be selected based on the number of available board seats. Unlike jury duty, this ability to opt-out adds in a self-selection bias to the process. But this method would still result in a process where more residents feel, and if fact are, involved.
What about those seats already reserved for community members? Like the informal courtesy afforded to council members to select nominees for board appointment, on a number of these authorities there are seats intended for the “community,” such as the four community-seats on the DBRA. With respect to current members and their public service, these individuals are often the city’s well-to-do. They are insiders. Outsiders, less well-heeled residents, should be provided opportunities to contribute to and inform the city’s economic development. This will substantively answer dissatisfaction with city economic policy voiced by local activists, and result in the more equitable development that they want to see.
Conclusion
At the time this editorial was written, there are seven people who have either declared their candidacy for mayor in 2025, formed an exploratory or publicly expressed interest. Whoever becomes mayor, they will have to answer the deep dissatisfaction with the city’s economic development policies, voiced in the conversations CRC had with local activists and private developers as a part of its research. To address that dissatisfaction, the city’s elected leaders must reconsider policy, and equally who makes policy.
James L. Tatum III is Director of Financial Planning and Analysis in Wayne County’s Department of Management and Budget. He is also Principal and Owner of River Park Consultancy, LLC. In addition to his public and private sector experience, he is an academic. His research on debt and pensions, insolvency and Chapter 9 bankruptcy has been published in trade, law and peer-reviewed journals.
Note: The views represented in the article are the author’s and do not represent those of his employer.