Connecting the Dots: Water Shutoffs, Pensions, Emergency Management,

Bankruptcy & BeyondPeter J. Hammer

Professor of Law, DirectorDamon J. Keith Center for Civil Rights

Wayne State University Law School

Connecting the Dots . . . .

Structural Racism + Fiscal Austerity = Detroit

Structural Racism = 100 year history

Fiscal Austerity = 40 year history

Contemporary conflation nationally◦ News strains of racism◦ Pronounced anti-government views

Diagnosing Detroit’s Problems

Belief Systems & Institutions:Defining Processes of Change

Belief Systems:Neoliberal Fiscal AusterityStructural Racism

Institutional Matrix• Laws rules, norms,

regulations• Rules of the game• Players of the

game

Strong belief in markets and fear of the state

Emphasis on property right Hyper sense of individualism Marginalizes role of structure and social

context Blames/punish individuals who fail to live up

to standards (false meritocracy) Myth of colorblindness Vilification of public good and processes

Fiscal Austerity: Belief System

Minimalist state Unrestrained markets Privatization of public assets Minimal public workers/benefits

◦ Minimal respect for public employees Minimal social safety net

Fiscal Austerity: Institutions

Intent

Structural Racism

White Privilege

(supremacy)

Implicit Bias

Structuralized Racialization (verb)

Michigan Roundtable-Kirwan Institute Opportunity Mapping

Defining Opportunity◦ Housing ◦ Employment◦ Schooling◦ Health◦ Transportation◦ Food security◦ Living environment

Spatial Racism: Segregation of Race and Wealth in Detroit

Mapping Opportunity in Detroit

Mapping Opportunity and Race

Slavery

Jim Crow

Spatial Racism

Legacy of Spatial Racism

How does the State respond?

Each “Dot” is its own artifact:◦ Emergency Management◦ Detroit Public Schools◦ Detroit Future City◦ Blight Task Force Report◦ DWSD: Water Shutoffs◦ Bankruptcy Plan of Adjustment◦ Pensions

Each “Dot” contains its own embedded manifestation of . . . ◦ Belief Systems (worldviews)◦ Institutional Matrix (power)◦ Magnetic force field

Connecting the Dots

Policies, Institutions & Belief Systems Exert Force Fields

Difference between “debt” and “cash flow” Leading causes for falling revenue (cash

flow)◦ Falling state revenue sharing◦ Falling property taxes (foreclosure crisis)◦ Increasing legacy costs

Financialization and the role of Wall Street◦ COPS and SWAPS and City finances◦ Bond refinancing of DWSD◦ Predatory lending and the private mortgage

financial crisis (Aitken v. Morgan Stanley)

The Causes of the “Fiscal Crisis”

State imposed, anti-democratic regime EM template maps onto neoliberal fiscal

austerity agenda◦ Shrink size of government◦ Privatize public assets◦ Cancel labor contracts and reduce workforce◦ Take the city into bankruptcy

Emergency Manager

Structurally dysfunctional school finance◦ Charter schools◦ Inter-district schools of choice

Cycles of failed Emergency Management EMs cannot solve structural crises Failure of competition/markets as social

mechanisms Failure to protect our children

Detroit Public Schools

Distressed housing market is the template for future land use changes

Investment in City Services altered to map onto existing occupancy rates

No future residential uses in current distressed areas

Detroit Future City

Detroit Future City (housing occupancy)

Detroit Future City (investment in city infrastructure)

Detroit Future City (50 year vision)

Reveals the nature of the neoliberal worldview Consistent with pattern of de-population Water shutoffs

◦ 2014 – 3000/week => 30,000 households◦ 2015 – 800/week => 24,000 households

Assistance plans: Band-Aids not structural remedies (Curt Guyette)

170,493 residential accounts Detroit 73,457 accounts more than 60 days overdue (43%) 24,743 accounts on payment plans 24,450 payment plans over 60 days overdue 293 accounts helped

Water Shutoffs

Demolition is the top and only priority◦ 850 million dollars◦ 80,000 structures◦ 430 jobs

Establish mechanisms to transfer private land ownership to public ownership

Establish mechanism for the reassembly and redistribution of real estate◦ Detroit Land Bank

Blight Task Force Report

Mechanism to enshrine the minimalist state “Exit financing” to fund the Blight Removal

Task Force◦ Proposed to borrow new money to tear buildings

down but not invest in people (did not come to complete fruition)

Absence of investment in people/opportunity

Absence of respect for public employees Logical extension of fiscal austerity and

structural racism

Bankruptcy Plan of Adjustment

Need New Belief Systems & Institutions

Belief Systems:Equitable, people-focused development

Institutional Matrix• New Laws,

policies, rules, norms, regulations

Alternative beliefs and institutions

Equitable- People-Focused

Development

Community Benefits

Ordinance

Community Land Trusts

Water Affordability

Plan

Foreclosure Relief

Respect public

employees

Pathways to Opportunity

Questions?

Thank You