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Ann Arbor Council primary drama(?) has begun

30. May 2005 • Murph
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Planning Commissioner Eric Lipson has announced his intent to run against City Councilmember Marcia Higgins in the August Democratic primary for Higgins’ Council seat. So far, this is the only known-contested Council race.

The Ann Arbor News quotes Lipson on the attack,

“She is not a very visible member of council,” Lipson said.

Lipson said Higgins wasn’t involved in Rosewood Street’s traffic calming efforts a couple of years ago.

“We never got any assistance from Marcia,” Lipson said. “She never came to any of our meetings. We felt we were left hanging. ... I just feel like the 4th Ward could use more effective representation.”

Lipson called himself a “lifelong Democrat” and said Higgins was a “Democrat of convenience” who switched parties because it was easier to get elected in a strongly Democratic town.

The “Democrat-in-Name-Only” status that Lipson attaches to Higgins is somewhat weakened by her past support for same-sex benefits and, most recently, the Council’s decision to pay a living wage to trash sorters.

  1. She was also pretty dismissive about the couch ban idea (of course, that might actually make her a conservative by A2 standards.) And she was attacked by Republicans for not being Republican enough before she switched.

    Anyone know anything about Lipson? Why should I vote for him (although I may not have moved to the 4th Ward by the time of the primary)?
       —ann arbor is overrated    May. 30 '05 - 06:10PM    #
  2. Since JulieW and EdV have lived in the 4th for longer than my 3 weeks, I expect them to have been paying more attention to Higgins than I in the past. Scott T. ran against Higgins, as a Green, two years ago. Since she recently served on Environmental Commission, perhaps Steve can chime in. For my own part, I’ll note that Lipson sits on the (geographic) half of the Planning Commission table that I’m usually underwhelmed by (the side that’s not Hall to Carlberg, inclusive).

    ArborUpdate will be, in the Goodspeed tradition, sending questionnaires to Council candidates – suggestions of questions or issues are welcome.
       —Murph    May. 30 '05 - 06:12PM    #
  3. aaio: jeez, you’re fast on the comments . . .
       —Murph    May. 30 '05 - 06:12PM    #
  4. Hey, Murph—can we get a primer on the city council campaign/election process tossed up here or linked?

    It’s June 20 for announcing for the Democratic Primary; what about independents, etc?
       —Dale    May. 30 '05 - 06:13PM    #
  5. The Greens hold a county-wide caucus to select their candidates. I suspect other third parties with ballot access do the same. I don’t know what the deadline is for them, but they set the caucus date and have to submit the candidates’ paperwork to the city by some specific date.
       —Scott Trudeau    May. 30 '05 - 08:10PM    #
  6. In my dealings with Higgins, she has been insincere, unhelpful, and only votes with the citizens of the 4th Ward if she feels it will help her political cause. I’m thrilled that someone has decided to oppose her on the Democratic ticket. I usually agree with Lipson’s opinions on the Planning Council or at least feel that he has put a lot of thought into them so he definitely will get my vote.
       —Juliew    May. 30 '05 - 08:55PM    #
  7. ”... only votes with the citizens of the 4th Ward if she feels it will help her political cause.”

    Isn’t that good? I mean, based on most Ann Arbor politicians’ definition of “citizens.”

    I’d be interested in hearing more about Lipson, but being “a real Democrat” isn’t going to cut it. In fact, it makes him a somewhat less attractive candidate to me, given most Ann Arbor Democrats’ records on representing non-homeowner interests.
       —ann arbor is overrated    May. 30 '05 - 09:17PM    #
  8. Marcia Higgins first won the 4th ward seat in 1999 by 79 votes.

    I was the Democratic candidate.
       —Larry Kestenbaum    May. 31 '05 - 03:14AM    #
  9. She beat me by a lot more than Larry, but I barely ran a campaign and was on a third party ticket. But I still got somewhere around 30% of the vote…
       —Scott Trudeau    May. 31 '05 - 01:51PM    #
  10. 29.75—a damn fine turnout aided in no small part by the lack of a Dem, but certainly smartly opportunistic.

    Link here; page 2

    I can’t believe council winners in off-year elections can be elected with less than 2000 votes. We have GOT to get some more candidates in these races.
       —Dale    May. 31 '05 - 02:21PM    #
  11. Or perhaps it would be better to have more educated voters in these races. If the students voted in any large number, their candidate of choice would almost always win.
       —Juliew    May. 31 '05 - 02:53PM    #
  12. No argument there.
       —Dale    May. 31 '05 - 03:00PM    #
  13. Interesting reading all the comments. Great to see people are actually paying attention to the political scene. I’m running for Council a bunch of reasons. A few random reasons: I believe that we can improve our quality of life while reducing our level of consumption: Less autos, more bikes and good public transit. That with good planning, we can find a way for Ann Arbor to grow without destroying its character. That we can provide a high level of city services without exploiting our workforce. That we should not discriminate against those with different life styles. I believe that protecting the environment protects our health, welfare,future and our children’s future. Locally that means doing everything we can to preserve the Huron valley watershed and tributaries as well as local air quality. That providing social services for the less- advantaged is merely enlightened self-interest. We all gain when the poor, the sick and the elderly are raised up. Providing bus svc for a person without a car to get to work is cheaper than providing welfare. That government should be transparent and conducted in public, not in private. I’d be happy to answer any specific questions that people might have about where I stand on issues.
       —Eric Lipson    Jun. 11 '05 - 02:34AM    #
  14. (Council needs a Divest-from-Israel Public Hearing) Good!

    I like the idea that “government should be transparent and conducted in public”.

    I assume that includes holding a public hearing, at long last, on the Human Rights Commission’s Palestine resolution.

    The resolution requests a cut-off of military aid to Israel.

    Looking forward to the public hearing,
       —Blaine.    Jun. 11 '05 - 05:14AM    #
  15. Hey Blaine, welcome back.

    Have you ever thought about what bad citizenship single-issue politics is? The inverse of single-issue politics is the disengaged majority. That’s what allows the Zionists to dominate Congress and the President.

    How about you come back to the Hiller’s thread and chat some more.
       —Al Braun    Jun. 11 '05 - 10:57AM    #
  16. Hey. what happened to my response to Blaine?
       —Eric Lipson.    Jun. 11 '05 - 03:26PM    #
  17. Blaine, that was quick! Human rights is a big issue with me. But where do we start? Genocide is occuring right now in Darfur. Tens of thousands are dying. Human rights are being trampled in Russia, China and Guantanamo. Maybe we should disinvest in the U.S. because of our horrible human rights record in Abu Graib and our killing tens of thousands of civilians in Iraq. Sell Google because it is a product of U.S. imperialism? I agree that the Palestinians are being oppressed. The Israelis are reacting (over-reacting perhaps)to suicide bombings like we over-reacted to 9/11 by invading Iraq. Politicians using fear to promote their political agendas… But on a city council level, what should our first priority be? What should we do to promote human rights?I’d be interested in hearing what others have to say.
       —Eric Lipson.    Jun. 11 '05 - 04:15PM    #
  18. Eric, my own reaction is to say the City Council’s first priority in this domain should be to ensure that human rights violations never happen on our own turf. The resolution a while back forbidding our police department from participating in Patriot Act enforcement (I can’t remember the exact resolution?) was a good step. Condemning the use of tasers, pepper spray, sonic, and other “non-lethal” or “crowd control” devices by the police would be another step. (The girl who was killed by a “non-lethal” pepper spray ball to the eye in Boston was in my little sister’s school.) I must say that I’m a little conflicted on that second part, though. When you’ve got masked thugs throwing rocks at Larry K , I can reluctantly see where pepper spray might have a moderately legitimate use.

    Ensure that our closets are clean, and then work on regional issues – get involved in actions to ensure the County and State police are similarly following decent standards.

    These may not be on the magnitude of divestment in Israel (though I agree that divestment in weapons manufacturers, for example, is by definition good), or working against the war in Iraq, but they’re things we have direct power or influence over.
       —Murph    Jun. 11 '05 - 05:12PM    #
  19. Murph,I agree with you on all points there. I also read that link from Larry K and share your ambivalence about “non-lethal” weapons.
       —Eric Lipson.    Jun. 11 '05 - 06:29PM    #
  20. (Council needs a Divest-from-Israel Public Hearing) Anti-slavery campaigners “singled out” American slaveholders, even though slaves in the West Indies lived much worse lives.

    Aren’t you glad, for their “single-issue” campaign?

    Why not shine a light on the many billions we are compelled to give to Israel as it occupies and crushes Palestine?

    We don’t give billions to crush Darfur.

    We do give billions, every year, to crush Palestine—why can’t a person oppose that, without first going to Darfur, or to “get our own house in order”?

    It kind of IS our own house, if we give billions to crush Palestine.

    City Council used to pass such resolutions all the time—until Palestine came up.

    The bottom line, to me, is:

    How exactly can a public hearing, on the Human Rights Commission’s already-approved Palestine Resolution, possibly do any harm?
       —Blaine.    Jun. 11 '05 - 07:47PM    #
  21. Not sure it would do any harm or do any good. Has the commission requested that council hold such a hearing? Definitely worth more consideration. I don’t agree with your characterizations of us “giving billions to crush Palestinians.” Unfortunately we support many more repressive regimes as well: Egypt, Uzbekistan, Saudi Arabia…Cooling the rhetoric might be helpful to getting more public acceptance of your cause.
       —Eric Lipson.    Jun. 11 '05 - 08:52PM    #
  22. (Council needs a Divest-from-Israel Public Hearing) To answer your question about the Palestine Resolution…

    ...the Human Rights Commission, in December 2003, officially transmitted its Palestine resolution to Ann Arbor City Council, asking for a lot more than a hearing.

    The Commission asked for City Council to just plain adopt the Palestine resolution.

    In fact, the Commission drafted the resolution specifically for passage by City Council, as you’ll see below.

    Still looking forward to that passage.

    Failing passage, still looking forward, at least, to a Public Hearing on the Palestine Resolution.

    Here it is, as the Commission officially proposed it to City Council back in 2003:


    Proposed by the Ann Arbor Human Rights Commission on December 4, 2003

    Whereas, the United States, by providing Israel with virtually unlimited diplomatic, economic, and military support, has made itself complicit in Israel’s 36-year old military occupation of Palestinian lands;

    Whereas, the State of Israel’s building of a 25-foot Separation Wall that cuts through Palestinian communities, is further undermining chances for a peaceful resolution to the Palestinian-Israeli conflict;

    Whereas, construction of the Separation Wall deprives a significant proportion of the Palestinian people of all means for self governance, movement, commerce, and education on all levels, and makes the prospect of a viable independent Palestinian state unfeasible;

    Whereas, the Unites States government has expressed its official opposition to the construction of the Separation Wall (President George W. Bush, London, Nov. 19, 2003) while at the same time refusing to use its unquestionable influence to prevent the Israeli government from proceeding with its construction;

    Whereas, a majority of Jewish Americans support ending the occupation of Palestinian lands and dismantling of the Settlements (US Campaign to End the Israeli Occupation, Sept. 23, 2003) and;

    Whereas, the City of Ann Arbor has in recent months witnessed dozens of vigils, peaceful protests, teach-ins, lectures, and debates on behalf of the beleaguered Palestinian population;

    RESOLVED, That the City of Ann Arbor urge the United States Federal Government to stop military aid to the state of Israel until such time that Israel ends its occupation of Palestinian lands; and

    RESOLVED, That the City Administrator send copies of this resolution to our U.S. Congressional and Senate representatives, and the President of the United States.
    – - – -
       —Blaine.    Jun. 12 '05 - 12:26AM    #
  23. Thanks.
       —Eric Lipson.    Jun. 12 '05 - 02:38AM    #
  24. What are people’s feelings about a city income tax on residents and non-resident workers?
       —Eric Lipson.    Jun. 12 '05 - 05:06PM    #
  25. City income tax: no.

    In the discussions that have come up before, here and on Ann Arbor is Overrated, I think the general consensus is that this would be good for homeowners and landlords and bad for students and renters (just like basically anything that gets proposed), and would also be one more force pushing the companies that have any mobility (everybody but the U) out to the Townships.
       —Murph    Jun. 12 '05 - 06:00PM    #
  26. Why is it bad for students and renters? Or I guess, why is it worse for them? Students don’t make much income (except grad student assistants). And it would boost the almost nonexistent income the city gets from the University. Renters already indirectly pay property taxes, so an income tax doesn’t seem to create a hidden additional tax to them in addition to property taxes. What is the relative benefit to homeowners? The people who would seem to have the most to “lose” are commuters who work here but live outside the city. I should review the old posts.
       —Eric Lipson.    Jun. 12 '05 - 08:25PM    #
  27. “think the general consensus is that this would be good for homeowners and landlords and bad for students and renters (just like basically anything that gets proposed)”


    I would have assumed that students spend unusually high proportions of their income on rent (hence on property tax).

    And a progressive income tax would seem easier on most students for obvious reasons….
       —Bruce Fields    Jun. 12 '05 - 08:27PM    #
  28. All right, so you create an income tax and you reduce the property tax. If I rent my home (which I do, right now), I will have to pay a new income tax, while my landlord receives a property tax break. Which I will almost definitely not see.

    Students might not make much income, but every dollar of it counts, and, for a lot of students, every extra dollar they pay in income tax means an extra dollar in student loans. They might see a little bit of the property tax break, if the rental market is particularly soft that year, but it’s unlikely that they’ll see much, and definitely not enough to make up the income tax.

    Homeowners, on the other hand, will enjoy their property tax break directly, as well as being the chief beneficiaries of the marginal services that will be saved or lost based on a little extra income. You can be certain that only a very few students (such as Dale, our architectural historian) care about historic preservation, for instance, or senior centers; relatively few use public swimming pools or the golf courses, etc. The benefit from the extra income is in saving programs that are not-student oriented.

    Finally, there’s the decent chance that the property tax cut will end up being on “homestead” properties only, because people will otherwise complain about giving tax cuts to big corporations while people are being pushed out of their homes – conveniently neglecting to mention the fact that rental properties are non-homestead.

    That’s my selection of the important objections.
       —Murph    Jun. 13 '05 - 12:04AM    #
  29. No, the “homestead” exemption only applies to school district taxes, not to city taxes.

    I have mixed feelings about the income tax issue.

    A couple of points on the plus side. (1) the property tax system is broken, as I have detailed ad nauseam here before, and the city won’t be able to rely on it in the long run unless it’s fixed, which is unlikely. (2) If we had an income tax, activists would get a leg up in arguing that students should register and vote in local elections. Even students in university owned dorms would pay an income tax if they worked. (3) All those commuters who use Ann Arbor services would be paying at least something.

    On the minus side: (1) there is no ability to make the income tax progressive. It’s a take-it-or-leave it package: one per cent on residents, one-half percent on nonresidents who work in the city. (2) Many of those who work in Ann Arbor but live elsewhere are poorer than people who live here. (3) Income tax revenue tends to fluctuate wildly with economic trends, unlike the very stable and predictable property tax.
       —Larry Kestenbaum    Jun. 13 '05 - 12:17AM    #
  30. “All right, so you create an income tax and you reduce the property tax. If I rent my home (which I do, right now), I will have to pay a new income tax, while my landlord receives a property tax break. Which I will almost definitely not see.”

    Why on earth not? Forgive me for rehearsing the standard econ 101 arguments, but: if I own apartment complex A, and next to me there’s an identical apartment complex B, and I charge $20 a month more rent than B, then which of us is going to have more vacancies?

    So, if I’m given the opportunity to lower my rents, why wouldn’t I?

    No doubt the market in rental housing is less than perfect, but still I think the burden of proof is on you to provide an argument why the changes in landlords’ expenses won’t effect rents.
       —Bruce Fields    Jun. 13 '05 - 02:04AM    #
  31. Folks,

    I hate to say it, but let Ann Arbor not repeat the mistake of Detroit in putting through an income tax. If the tax was done on a county wide basis, then it would make sense, but to have only the city with an income tax will grow the adjacent areas even faster than they already are growing. An income tax will kill this city over time as the middle class will flee the city for the, “Ann Arbor schools, township taxes.” An income tax would probably reduce the cities’ tax base over time. I think it would be better to reverse the decades long trend of businesses paying less tax on their business property by automaticly stepping the taxable value of property to the SEV every 10 years. Give the windfall to homeowners and renters and then you could get support for millage elections for various popular programs. Have the city use its bully pulpit to push for an ammendment to the State Constitiution to get this done.
       —Chuck    Jun. 13 '05 - 02:45AM    #
  32. Bruce—check the text for econ 102.

    1. Comparing apartments is not as easy as you portray. These aren’t two cans of the same soup, one campbell’s and one store brand.

    2. Students more or less HAVE to get an apt in Ann Arbor, so it’s not open competition. The competition is between students fighting for a finite or even scarce resource (decent, proximate housing), not landlords fighting for a scarce resource (tenants). The perception of the housing scarcity favors landlords even more.

    3. Because of the restricted flow of information foundational to #1, students can’t look at the rent before and after the property tax cut and know they aren’t getting a piece of the savings—students are bargaining from a position of VERY limited information.
       —Dale    Jun. 13 '05 - 02:47AM    #
  33. Larry, since we’re talking about amending the State Constitution, what are the arguments for and against allowing city/county sales taxes?

    It would seem to me that this might be a better option than screwing around with an income tax. I’ll have to think about it…
       —todd    Jun. 13 '05 - 12:49PM    #
  34. Bruce, I can offer two problems with the doctrinaire economist approach, both of which end up with the result that the property tax refund is not going to be passed along to me, the renter; at best, it’s going to be split between me and my landlord. A homeowner doesn’t have to share the pie with anybody.

    One is that there’s asymmetric information – a market failure condition. My current landlord, for example, manages 60-odd properties, from houses to apartment buildings, and knows all of the other landlords in town. I’m renting one house (with my housemates), and have extremely limited information about the other properties in town. We’re not dealing on equal terms, so I’m not going to be able to negotiate the lease that is economically optimal.

    A second is outside the realm of economics, in business. (Marc R. can correct me if my development class imparted knowledge doesn’t get the management details quite right.) Big landlords don’t mind having a vacant property or two; they can write it off as a business expense, and bring down the amount of taxable income they have to deal with on the other properties. Their ideal situation is not to drop the rents on all of their properties commensurate with the property tax break in order to ensure fullness. Their best interest is in letting some of the properties go vacant and continue collecting higher rents on the other ones in order to maximize post-tax income. I, on the other hand, do not have the luxury of choosing not to have a place to live in order to maximize my post-tax (post-rent) income. Yes, I’ve seriously considered living in a van at times, but I do have to have a place to live. I have far less flexibility than the landlords. All residents have to find a place to live; not all properties have to find tenants.
       —Murph    Jun. 13 '05 - 02:48PM    #
  35. I have argued this many times before, so forgive me for going through it again.

    It is a myth favored by economic conservatives that people fled the city of Detroit to escape its taxes.

    Almost nobody left Detroit for economic reasons. Almost anyone in Southeast Michigan could live cheaper in Detroit, because the housing costs are so stunningly low. That’s why Detroit’s population is now predominantly poor people who can’t afford to live anywhere else.

    Rather, people moved out of Detroit because they wanted to live in a place with less crime, better schools, a more suburban enviroment, and less of a stigma than Detroit, and they were willing to tolerate a higher cost of living to do so. (Obviously race or racism was a factor too.)

    When I lived in Detroit as a Wayne State law student in 1979-82, I often encountered suburbanites who were appalled that I lived in the city. Not one of them cited the income tax as a reason that I shouldn’t live there.

    Moreover, Detroit’s income tax (under a special law) is three times higher than what Ann Arbor would be allowed to levy. If you want to compare the economic effects of a city income tax, look to the other communities around the state which have the 1% tax, not Detroit.
       —Larry Kestenbaum    Jun. 13 '05 - 05:43PM    #
  36. Todd, though we like to talk about it, amending the state constitution is a very difficult option, requiring either two-thirds of the Legislature or about half a million petition signatures, and then a statewide vote. Tax increases don’t often pass.

    Moreover, even if it were to pass statewide, it would probably require separate votes per county to implement such a tax. Given the deep hostility in much of this county both to the county government and taxes in general, I can’t imagine such a proposal winning.

    It cannot be overstated how irresponsible the legislature is on these issues. For example, the state budget is about $8 billion (and they’re currently trying to deal with a $900 million shortfall). The Republican response is to eliminate the single business tax, which brings in $2 billion/year, and not replace it with anything.
       —Larry Kestenbaum    Jun. 13 '05 - 05:51PM    #
  37. Larry,
    I grew up in suburban Detroit, and I agree with you that the primary reasons people moved out of Detroit did not include the city income tax. I do think that in the 1950’s through the 1970’s, the time of white flight, racism and fear were the biggest reasons driving most people from Detroit.

    Now, however, Detroit’s income tax is frequently cited as yet another reason not to live or work there, along with crime, an appalling school system, and completely dysfunctional political leadership.
       —tom    Jun. 13 '05 - 05:58PM    #
  38. Tom,

    It’s true that Detroit has the state’s highest city income tax by a factor of three. It’s also true that people who don’t live in the city probably don’t relish the thought of preparing another tax form.

    But I suspect that Detroit with no city income tax (even if the tax revenue magically appeared some other way) would not change anybody’s view of Detroit as a place to live.

    I think in the 1990 US Census, the average value of owner occupied homes in Detroit was $29,000, compared to $130,000-something in the suburbs.

    Okay, houses in Detroit are smaller and older, but nearly identical houses facing each other across the city limits are different in value by at least a factor of two.

    Except for the very wealthy, it is not mathematically possible that a 3% income tax is such a huge burden as to make it more expensive to live in a house worth half as much.
       —Larry Kestenbaum    Jun. 13 '05 - 06:13PM    #
  39. Copy that Larry—you’ve talked about the affordability of Detroit several times. If you live in a Renaissance Zone, you get waivers for a lot of the taxes, too.

    However, several people I’ve talked to have pointed out that their home and auto insurance rates zoomed upwards when they moved into the D. It seems like it’s been a dealbreaker in a couple cases. (totally unrelated to Ann Arbor, I know, but…)
       —Dale    Jun. 13 '05 - 06:22PM    #
  40. Larry,
    I don’t doubt that if you sat down and ran the numbers, Detroit’s income tax does not make it more expensive to live there for the reasons you point out. But, the perception is that it is another damned tax you have to pay, and it is another hassle you have to go through in April. So it is another disincentive for people to live there.
       —tom    Jun. 13 '05 - 06:25PM    #
  41. ...I’d love to live in Detroit. However, to do that, I’d need a job there… And given Detroit’s economic prospects, I can’t imagine moving there in the hopes of picking something up…
       —js    Jun. 13 '05 - 06:27PM    #
  42. ” Students more or less HAVE to get an apt in Ann Arbor, so it’s not open competition.”

    “All residents have to find a place to live; not all properties have to find tenants.”

    Note that these arguments do not support specifically the claim that property tax decreases would not affect rents.

    Instead, they are arguments that landlords can charge as much as they want for rents. Which raises the question—why don’t they just go ahead and do that now? Why is my rent $700 a month and not $7000? If it were possible for a landlords here to charge new york or san francisco rents, I find it hard to believe they wouldn’t….

    “Because of the restricted flow of information foundational to #1, students can’t look at the rent before and after the property tax cut and know they aren’t getting a piece of the savings-students are bargaining from a position of VERY limited information.”

    This is no different from the current situation; I have no clue whatsoever what my landlord’s expenses are. I couldn’t give you even the roughest pie-chart. I just comparison-shop. The necessary assumption is that you know what prices things are selling for, not that you know all the sellers’ expenses.

    So I still don’t see any reason why in the long run decreases in landlords’ expenses won’t affect rents.
       —Bruce Fields    Jun. 13 '05 - 10:51PM    #
  43. A thought on property taxes:

    There is quiet talk among my affluent neighbors that no one should buy a new house in town because Prop A means your taxes will go through the roof. So people who might like a bigger house are staying put because of taxes. I know another couple who built a house and were shocked by the tax bill. They are trying to sell it. So is another couple.

    It might not be entirely visible, but there is concern about taxes, but no one wants to admit it.

    But…the greenbelt will make property more expensive in the city, and if it weren’t for Michigan’s screwed up property tax system, that would help the city budget.

    God, now that I really think about it, it’s a real mess. Property taxes. Who came up with Michigan’s stupid, stupid tax system?
       —JennyD    Jun. 13 '05 - 11:44PM    #
  44. Bruce,

    I think the logic is basically the supply and the demand are fixed, regardless of the property tax, and the supply/demand dynamic sets the price of rents, not the fixed costs (taxes, maintenance, etc.) of maintaining a rental property.
       —Scott Trudeau    Jun. 14 '05 - 12:49AM    #
  45. Bruce,
    Why is your rent $700 and not $450 or $500? There are other places in town that charge less for what you’ve got, no matter what you’ve got.
    Because of two external forces that shape the priorities of people who have to rent as laid out helpfully above by Murph, (and to that I’d add that renters often have to move quickly, whereas landlords can afford to wait), and because looking for a place is a lot of unpaid work, you’re unlikely to enter into an equal relationship with a landlord (especially if they own more than one property).
    Think about it this way: you’ve already shown that you will pay $700. Are you likely to move across town if your landlord keeps the rent the same? Even if his costs decrease? And if the majority of other landlords keep their capitalist inertia from overwhelming this sudden flush of cash from a drop in their property taxes, how likely is it that the consensus on what the market will bear will suddenly change for the advantage of the tenant?
    In all, I think that you’re missing the motivation of landlords and ascribing more good will than the system could bear and still resemble the market we have.
       —js    Jun. 14 '05 - 02:12AM    #
  46. Larry,

    You seem to have missed my main point about Detroit’s income tax. That is, the central cities need to compete with their suburban neighbors and there are limits that they do not control but must pay heed to. No doubt, Detroit’s decline was complex but I maintain that the income tax, which was passed in Detroit’s hayday, did not help the situation. Now Detroit has dug itself into a nice big hole that is going to be really hard to dig out from. The income tax is a barrier to more middle class families either staying or moving in, but the city cannot afford to get rid of it. I still maintain that the City of Ann Arbor would see money flee to the Scio’s and Pittsfield’s even faster if we had an income tax. Personally, I like what Indianapolis did, the city and county are one and the same. Indiana also allows a local income tax only at the county level, a much better way to have a local income tax.
       —Chuck    Jun. 14 '05 - 05:55AM    #
  47. Chuck,

    No, I think you’re just wrong about the income tax, which, by the way, was last increased during a very low point in Detroit’s economic life.

    Even WITH the income tax as high as it is, I doubt there is any suburban middle-income family in Southeast Michigan which could not live cheaper in Detroit.

    In other words, there is a steep economic incentive to move to the central city, but they choose not to do so for non-economic reasons.

    Recently in the Detroit News, however, there was a piece about affluent families who own very nice houses in Detroit. In some areas, these houses have been rising in value, not to suburban levels, but to pretty significant numbers. Because Detroit’s property tax rates are extremely high, people with homes that approach “normal” values are paying startling sums in annual property taxes.

    Combine all housing costs, and these families are still paying a lot less than they would for the same house in Royal Oak. Still, the kinds of homes that might be attractive to suburbanites come with tax bills which, in absolute numbers, probably seem scary.

    If Detroit didn’t have an income tax, the only legal alternative would be to raise its high property tax rates even higher.

    Much as it might be desired, there is no legal basis for a countywide income tax in Michigan. It is hard to imagine our legislature creating one, and it is even harder to imagine it being passed in a statewide referendum.

    Moreover, Eight Mile Road is the county line. If Wayne County had a county income tax, anyone could move across the street to Oakland or Macomb counties to avoid it.
       —Larry Kestenbaum    Jun. 14 '05 - 11:26AM    #
  48. Larry said: “Even WITH the income tax as high as it is, I doubt there is any suburban middle-income family in Southeast Michigan which could not live cheaper in Detroit.

    In other words, there is a steep economic incentive to move to the central city, but they choose not to do so for non-economic reasons.”

    Is that true, when you look at higher taxes and much higher insurance rates, the costs begin to balance, and when you consider very real quality of life issues—schools, roads, street lights, crime, garbage pickup, etc. When voluntary Detroiter Keith Owens is talking about giving up (citing, among other things, a pack of wild pit bulls that showed up in his front yard one day), it’s hard to make the argument to anyone to move into the city…
       —Scott Trudeau    Jun. 14 '05 - 01:49PM    #
  49. Larry,

    Whether it’s an income tax or a property tax, I like taxes levied at the county level (I had no problem voting for the countywide 1-mill special education millage.) Tell me Detroit would not be better off tax base wise if all of Wayne County were a single governmental unit like Indianapolis (My Liberal elitist ways make me cringe at the thought of giving a bunch of Hoosiers credit for anything, but here I must. Indianapolis spends about one-third the amount per capita on police services than Detroit!) Larry, let’s face it, you don’t want a situation where the rich people live in one city and all the poor and/or lower than average people live next door in another city. The income tax is only a small part of the Detroit story, but still, part of it. The people in the top 10% of the national income distribution are not going to move into Detroit in any big numbers. Another consideration you are not taking into account is what quality of life a given tax dollar will buy; there’s two sides to the value equation, what does it cost and what do I get for my money. I keep trying to make the point that local governments have to manage the value equation well or they face a flight of their most productive citizens which will ultimately hurt the poor the hardest. You don’t want to get yourself into the hole that Detroit has to manage in the first place. Detroit has a tax structure designed to tax poor people. The way things stand now, a person of means moving to Detroit is looking at paying a lot, but not getting much in return to show for it.
       —Chuck    Jun. 14 '05 - 04:47PM    #
  50. Scott, given that housing costs are a huge and growing proportion of average household expenditures, and Detroit’s housing costs are dramatically lower than housing costs in any suburb, I doubt that higher insurance rates “balance” the cost.

    Keith Owens is not being taxed or priced out of the city. He’s talking about leaving because of noneconomic, quality of life issues. That was precisely my point! To describe Detroit’s problem in economic incentive terms is to misdiagnose it.

    Chuck, you’re trying to change the subject, too. OF COURSE there are severe quality of life issues in Detroit which lead middle-class families to choose to live in the suburbs.

    Yeah, Detroit would be better off if it didn’t get into this hole in the first place. I don’t agree that the income tax put it there. And anyway, here in real life, there’s no rewind button available, and there is zero likelihood of any kind of countywide tax system in our lifetimes or the lifetimes of our children and grandchildren. You and I would vote for it, and maybe others here, but we’d be in a tiny minority.

    Ann Arbor and Detroit are NOT AT ALL similarly situated. Detroit has a deep stigma which depresses the value of property there; Ann Arbor’s prestige inflates its value. Detroit is a cheap place to live compared to its surroundings, and has been for 50 years, yet is continuously losing population and business; Ann Arbor is more expensive than adjoining areas, more so all the time, yet is growing.

    Both Detroit and Ann Arbor have high property tax rates, but Ann Arbor has high rates AND high values, so that a standard house here pays a whole lot more property tax than the same house would just about anywhere else in Michigan.

    Detroit has a 3% city income tax which may have hurt its image, but does not reverse the economic incentives vs. the suburbs. Ann Arbor would only be allowed to levy a 1% city income tax.

    If you really want to convince me that Ann Arbor would hurt itself economically by shifting incrementally away from the property tax toward a city income tax, let’s talk about the other cities in the state with a 1% income tax.
       —Larry Kestenbaum    Jun. 14 '05 - 08:41PM    #
  51. I see where you’re going Larry, and I don’t disagree. However, I’m inclined against the income tax because of points already made: the option we have is a regressive one and it would benefit landlords and homeowners, but not renters.
       —Scott Trudeau    Jun. 14 '05 - 09:01PM    #
  52. detroit lost its Magnet.

    (and i grew up in detroit’s Mumford district. now, lou, show me some luuuuuuuv!!!!!!)
       —peter honeyman    Jun. 14 '05 - 09:59PM    #
  53. Larry,

    I think the main thing that put Detroit in the hole was the de-industrialization of the auto industry in Detroit. The auto industry has not added jobs in Detroit on net in about 30-40 years. Blatant racism is clearly a factor. But did the income tax help the situation? I bet it accelerated the exit of the middle class. My point is, it did not help the situation any and probably made a bad situation worse. I’ve looked at the population growth rates for Ann Arbor, Scio and Pittsfield and Scio and Pittsfield are gaining population rapidly while Ann Arbor population growth is flat. The 1% income tax with the property tax offset is designed to ensnare a politician’s favorite target: a taxpayer who can’t vote! The point is to tax UofM by taxing the payrole of the employees who don’t live in Ann Arbor, effectively. This will allow the city to spend more, but on what? Will the citizens of Ann Arbor really get that much more from the increased spending? I doubt it. What do local governments do? Let’s see, Police, Fire, Parks, Garbage Pickup, Bus Service, Summer Camps for Kids, Road Repair. All these services could be better, but are they really that bad off in Ann Arbor? I feel the situation is similar to the Giant Jail situation. When the county builds it the Judges will say, “hay, we have all this Jail space, let’s fill it up!” And then we are back to a shortage of Jail space, only with a higher expense base. The supply leads to the demand, and likewise, increased revenue will lead to increased expenses, not leaner, more efficient government. The City of Ann Arbor should levy the same taxes as the surrounding communities in amounts that are similar. The political battles should be over how the monies are allocated, but we should never create some huge, monsterous money eating bureacratic machine that’s in constant need of a money fix.
       —Chuck    Jun. 15 '05 - 02:40AM    #
  54. Chuck,

    I strongly disagree with all that, including the assumptions underlying it, but I’m sure everybody is getting tired of this discussion.
       —Larry Kestenbaum    Jun. 15 '05 - 04:01AM    #
  55. It’s definately cheaper to live in Detroit for some people, but for the majority it would require a major change in lifestyle.

    In Ypsilanti Township, across the street from the City, I was paying $583 every 6 months for full coverage on a 98 VW Golf. After moving to Hamtramck, my insurance company wanted over $1300/6. When we sold our second car, the rate increased to over $1450 every 6 months. PLPD is still $750.

    Homeowners insurance under the Michigan Basic program is very affordable; less than $400/yr. Insurance on the contents is not so cheap at around $900/yr for $20,000 in coverage.

    The income tax in Detroit is actually somewhat less than 3% now due to a 1998 agreement to lower the tax to 2% over 10 years.
       —Hillary    Jun. 15 '05 - 04:58AM    #
  56. Personally, I think the riots and racism killed Detroit, not the income tax. And I think that the “market” works in the rental arena. It is easy to shop quality and price and students do that. It’s not rocket science. Rental rates aren’t secret. They are advertised! Rentals are relatively soft now and will get softer when the Frieze building becomes a dorm and “North Quad” comes on line. Remember how, paradoxically, the rental market got soft after the “rent control” ordinance failed and new housing (that had been delayed while developers took a wait-and-see stand until rent control failed)actually was built. Ultimately the choice will be up to the voters, assuming that city council decides to put it on the ballot. I would like to see projected comparisons: how much tax will be lost if 6 mils are chopped off the property tax and how much would be gained if non-resident U-hospital and U of M employees, non-resident pfizer staff, etc. start paying 1/2 % tax. Do you think the non-residents’ threat to stop spending their money in town will materialize if the income tax passes? I don’t. At least not in the long run. Will people quit their jobs in droves? No. But I do think the equities to be balanced here are not as much between renters and non-renters as between residents and non-residents.
       —Eric Lipson.    Jun. 17 '05 - 03:52AM    #
  57. Eric, This is unrelated to the Ann Arbor discussion. Is your mom Greta and dad, Bill? If so, this is Carol Gilbert (nee Bocknek). My mom was Fran. Are you the Eric I knew long ago? How are your parents? I have never forgotten your wonderful warm family, Coney Islands, and being in your cozy home. I have such good memories of all of you.
    I’m now a Special Ed Teacher in Homewood, Illinois. I’ve been reading about all of your mom’s published books! Hope you are all doing well!
       —Carol Gilbert    Jul. 26 '05 - 03:54AM    #
  58. Hi Carol!
    Wow, what a blast from the past! Great to hear from you. I share those fine memories of our familes’ get-togethers. I’d love to hear more about how you and your family are doing. This is probably not the right forum for it. I’m in the Ann Arbor phone book. Let’s try to talk.
       —Eric Lipson    Jul. 26 '05 - 02:51PM    #