Special economic zones have brought prosperity to places like Hong Kong and Singapore, but they have never been tried in the United States. Michigan developer Rod Lockwood wants to change that by turning Detroit’s Belle Isle into a separate polity that would avoid the Motor City’s crushing taxes and regulations. In a new version of his 2013 novel “Belle Isle: Detroit’s Game Changer,” Lockwood demonstrates how a special economic zone on the island, which now serves as a park, could turn around the fortunes of Detroit as well as Windsor, Ont., and the entire Midwest.
It sounds far-fetched, but one of the central ideas of the plan recently got a boost from Detroit’s then-Mayor Mike Duggan. While in office, Duggan floated the possibility of replacing the city’s convoluted tax structure with a single tax on land, a concept pioneered by the 19th-century American philosopher Henry George.
Lockwood joins the Overton Window Podcast to discuss what’s wrong with the city and how the Belle Isle special economic zone could make it right.
“Detroit’s problem is really density,” says Lockwood. “It’s 138 square miles and it had almost 1.9 million people at one point. Now it has 600,000. It’s down to about 5,000 people per square mile. Chicago is around 12,000 to 13,000, though even Chicago’s struggling, losing population. Brooklyn’s around 44,000 people per square mile. You need to have density to have affordable services. And if you are spread all over, especially with aging infrastructure, it’s just not a recipe for success.”
How can the city turn that around? Lockwood analogizes the Belle Isle project to the way Hong Kong and Macau brought wealth and population to the Guangdong province while all of Malaysia benefits from Singapore’s success.
“The reason the local government should say yes is that Belle Isle, a city of 50,000 people, would require, by our calculations, about 46,000 workers to work on the island,” he says. “The majority of those workers would probably live in Detroit or live off the island and then commute out of the island and perform services in the hotels, the restaurants, the offices, the shops, and so forth. The employment increase is really a major factor in why the Detroit community should support this.”
At about a thousand acres or 1.5 square miles, the island is now partially used as parkland, and Lockwood’s plan to turn that around hinges on the long-discussed single tax on land favored by Georgists. In this plan, the value of the land itself is taxed, but not the value of improvements made to the land. Lockwood notes the negative incentives built into much American property taxation.
“We don’t want to take the current real estate tax norm in the United States where most cities and states tax the total land and improvements that are on that particular parcel,” he says. “So if you buy a piece of property and then you build a home or business on it, you’re taxed on the value of the entire structure and land — even though government bears no risk or does not offer a value for your building. If it burns down, they don’t come in and replace it for you. Your insurance company does. And you pay the insurance premium. So you and your insurance companies are the risk takers on the improvements. My plan here at Belle Isle, in order to encourage people to go vertical, is to tax only the underlying land value.”
The land value tax has never really been widespread, but the idea came within the Overton Window in 2023, when Duggan, at that time the mayor of the city, proposed applying a land tax to solve Detroit’s vast housing and land-use problems.
Lockwood is agnostic on the possibility that Duggan took the idea from his own writing: “Maybe we both stole it from Henry George.”
Lockwood likens the Belle Isle Freedom City movement to a sales pitch, and he says the idea has met with substantial agreement among Michiganders. All share the goal of making the state’s largest city more dynamic and forward-looking.
“Our pitch would be toward the younger entrepreneurial type who has a business or has developed a product and has some success in his or her local market but now has the vision to move into the world’s largest economy with that product. The ideal spot for this is for our young entrepreneur to move to Belle Isle, live on the island, spend majority of the year as a resident and then go across the river to the mainland in Detroit in this area I call Jefferson. That’s the main road there, and you would build your manufacturing plant there, then fly your product or ship your product to the coast from there.
“Michigan and the Midwest have been labeled the flyover area of this country,” Lockwood says, “but it could become the fly-from area, being more centrally located to the major North American market.”
Listen to the full conversation on The Overton Window Podcast.
