how detroit drives out motor city entrepreneurs

8/7/2019 How Detroit Drives out Motor City Entrepreneurs

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Executive SummaryDetroit has highunemployment, high poverty and empty buildings noticeable

even to a casual observer. As of the last census, in fact, Detroit had the highestunemployment rate, povertyrate and rate ofpersons receivingpublic assistance inthe country. AlthoughDetroit's economyhas begun to lookup, the Citygovernmentneeds to do everything possible to get out of the way of entrepreneurs seeking tomake an honest living.

Detroiters hoping to open a business face a multitude of required licenses,permits and inspections. Indeed, it seems that nothing can be done-no businesscan be started-without a permit. Anothercommonbarrier is the Citybureaucracy's"informationvacuum," whichmake it extremelydifficultto get accurate informationabout what requirements must be fulfilledbefore a business is opened. And stillother obstacles remain.CEILINGS

Somewould-beentrepreneurs findthe road to a moreproductive future blockedby artificial barriers to entry, such as ceilings on the number of entrants into aparticular field. Detroit sharply limits the number of taxicabs and other forms ofcommunity transportation. Thecurrent barriers raise the cost ofentering the industryand sustaining a business. Because many low-incomeDetroiters do not have theirown cars, it alsomeans that fewconsumers can affordlegaltransportation servicesina citywhere theydesperatelyneed them. Phasingout the cap on the number oftaxis,not creating caps on other transportation services, and simply relying on criminalbackground checks fordrivers, safetyinspections,and verificationofinsurance wouldgo a longwayto openingup opportunity inthe transportation industry.

Vending should provide opportunities for those without the capital to open aretail establishment. But the City of Detroit caps the number of food vendorsdowntown to only 16 approved locations. In 1996, the City issued only 14 foodpushcart licenses-none allowing sales in ethnic neighborhoods. In addition tolimiting the number and location of pushcarts, Detroit also restricts the kinds offood they can sell. Only hot dogs and sausages are permitted; even the use ofsauerkraut is forbidden. Anyfood that is soldmust be pre-prepared in a licensedcommissary. Preparing food at home, no matter how clean the kitchen, isprohibited. But perhaps the most significant problem forwould-be foodvendors isthe requirement that the pushcart be stored in a licensed conunissary. Vendorsthus must rent space in a restaurant or catering establishment to store their cartat night. And although it supposedly has not capped other types of vendors, inpractice, securing the appropriate permits for anyvendor can be next to impossible.

The Citymayhave some legitimate interest in keeping the sidewalks passableand maintaining proper sanitation at establishments that sell food. But Detroit'sstringent regulations go far beyond such concerns. The current system benefits noone-not potential consumers and certainly not potential entrepreneurs.


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OCCUPATIONAL LICENSINGOccupational licenses are another means bywhich the City ofDetroit blocks

productive livelihoods. From African hairbraiding to child care, numerousoccupations seeminglyrequire little formal education or capital to enter. These arebusinesses that are alsowell-suited topeoplewith children. But Detroit has madeit as difficult as possible to pursue these professions. Extraordinary educationrequirements for hairbraider licensing, a prohibition on home businesses, andexpensive license and permit requirements for child care, conspire to prevententrance into these fields or to force such businesses to operate as outlaws.

InDetroit, it takes 1,500hours tobecomea licensedhairbraider; 2,000 hoursto become a licensedbarber; and only 1,072hours to become a licensed emergencymedical technician. (It is also worth noting that not one hour of the requiredtraining for hairbraiding actually teaches onehow to braid hair.)

Caring for children requires kindness and common sense, but not highereducation. These qualities should make it one of the easier fields to enter. Yet,despite Michigan'Sshortage ofchild care (especiallyfor infants, which is importantas Michigan tries to move women from welfare to work), government-imposedstringent training and educational requirements, as wellas zoning ordinances thatsuppress licensed centers, contribute to the high cost of child care and restrictentry into the occupation. Such regulations gofar beyond legitimate public healthand safety concerns.

For example, child-care center program directors must take 60 semesterhours ofcoursework froman accredited college.The State's physical requirementsfor familychild-care facilitiesvirtuallyprohibit childcare in apartments. (Ofcourse,this disqualifies almost anyone who does not have enough money to own a housefrom providing family child care.) Consequently, over-regulation results in noregulation at all: As many as 15,000 child-care providers inMichigan operatewithout a license.

Among other recommendations, this report calls for relaxing educational,training and zoningrequirements for these professions.MILES OF RED TAPE, MOUNTAINS OF FEES

Other businesspeople discover that completing all the regulatoryrequirements usually takes so much time and money, they simply give up theirbusiness dreams or forgeahead and ignore the burdensome requirements. Detroithas created a stupefying bureaucracy, especially when it comes to regulationsgoverning buildings and their uses. Multiple inspections and inspection fees,incomprehensible building requirements, expensive, mandatory public hearings,arbitrary discretion by officials, and lengthy processing delays combine todiscourage entrepreneurs from undertaking business ventures or improvingexisting ones. From sign taxes to restrictions on planting trees, the bureaucraticshuffle has gotten so out ofhand that one business owner explained, "Weoperate

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on the basis that wejust dowhat we want to do and the permits will catch up withus sometime." Among the more devastating demands is Detroit's rule that anychange in the structure of a building requires that the owner bring the entirebuilding into compliancewith the current code. But perhaps the most burdensomerequirement is the City'S insistence that any new business provide off-streetparking. Such requirements serve to discourage owners from improving theirbuildings or businesses in any way.

Revision of the system of permits and requirements would encourageentrepreneurs to purchase and clean up some ofthe many abandoned buildings inthe City's business districts. Zoning and other building requirements must besimplified and reduced. As discussed in this report, the purpose of the buildingrequirements should be limited to true health and safety requirements.HOME-BASED BUSINESS BAN

Detroit's zoning prohibits home businesses in residential areas, evenbusinesses that do not generate any kind ofnuisance. Likemany other legal rulesin Detroit, the home-business prohibition is largely ignored by the governmentunless someone complains. Businesses, however, cannot secure loans when theyare operating illegally, even if the law is unlikely to be enforced. Nor can theyadvertise to help their businesses expand. As limits on public assistance come intoeffect, former welfarerecipients will need to become self-sufficient. Government canease this process by removingpointless prohibitions onhome businesses.CONCLUSION

Detroit is plagued by an intimidating bureaucracy, stifling and expensiverules, and a lack of easily obtained information. It doesn't need to be this way.Despite its poverty, Detroit is an astonishingly vibrant city. It is full ofentrepreneurs with ideas, energy and dreams. The future ofDetroit rests as muchwith small businesses as large ones. But governmentwill have to get out ofthe wayto allow the residents ofDetroit to reach their true potential.

Among other reforms, the City should reviewall regulations that affect smallbusinesses and determine whether each regulation is narrowly tailored to fulfill alegitimate governmental objective without unduly hampering enterprise. If aregulation does not satisfy this standard, it should be reformed or repealed, and allnew regulations should be measured against this standard. The City should alsocombine or eliminate all duplicative procedures. The number of licenses andpermits required for businesses now is staggering.

As the body of this report demonstrates, these government-imposed barriersaren't just about dry regulations-they are about thwarting real people's dreams forbetter lives for themselves and their families.

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Contents

Introduction , 1

Ceilings . , , . . . , . , . . . , . . . . . . . . . , , . . . . . . . . . . . . . 2

Vending and Merchandise Sales , 5

Occupational Licensing ........................,7

Red Tape and Fees , , , 12

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15

Endnotes . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . .16

Tables , 18

Biography , 26


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IntroductionWhen Henry Ford started his business in Detroit around the tum of the

century, he began working with automobiles inhis garage. Over time, he developedideas, implemented them, purchased buildings, and built a huge business,employing thousands of people and bringing increased prosperity to the city.Although few entrepreneurs go on to create businesses as large as Ford MotorCompany, many start the same way-with a good idea, the willingness to workhard, and a little bit of room at home.

The tradition of entrepreneurship and industry lives on in Detroit amongDetroiters. Throughout the city, people start businesses in their homes and smallretail stores in their neighborhoods; they drive cars for money, and braid hair. Infact, 85 percent of Michigan businesses have fewer than 20 employees, and smallbusinesses employ one-quarter of all Michigan workers. 1 But unlike the days ofHenry Ford, small businesspeople now must confront a bewildering array of legalrequirements and regulations in order to earn a living. Many become discouragedand give up their dream; many others simply ignore the rules and hope for the best.

A multitude of licenses, permits, and inspections faces Detroiters hoping toopen a business. Indeed, it seems that nothing can be done-no business can bestarted-without a permit. Completing all the regulatory requirements usuallytakes a lot of time and money. Finally, it can be extremely difficult even to getaccurate information about what is necessary.

From the degree that small business is discouraged one would expect thatDetroit's economy was flourishing and business should have to beg for the privilegeof operating. Instead, Detroit has high unemployment, high poverty, and emptybuildings noticeable even to a casual observer. According to the latest census data,in fact, Detroit had the highest unemployment rate, poverty rate, and rate ofpersons receiving public assistance in. the country.f While Detroit's economy hasbegun to look up, the City needs to do everything possible to get out of the way ofentrepreneurs seeking to make an honest living.

For a first step, the City should review all regulations that affect smallbusinesses and determine whether each regulation is narrowly tailored to fulfill alegitimate governmental objective without unduly hampering enterprise. If aregulation does not satisfy this standard, it should be reformed or repealed, and allnew regulations should be measured against this standard. Second, the Cityshould combine or eliminate all duplicative procedures. The number of licensesand permits required for businesses now is staggering. Governor John Engler's

Dana Ber!iner is a staff attorney at the Institute for Justice. Interviews and research for thisstudy were conducted by the author, by Howard Husock, Director of Case Studies at the John F.Kennedy School of Government at Harvard University and his research staff, and by Institute forJustice researchers Colleen O'Brien and Lori Graham.Most entrepreneurs interviewed refused to be quoted by name, either because they operateillegally or because their business licenses or permits require discretionary approval bygovernment officials. Names are therefore rarely used.


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LegalDivision and OfficeofRegulatory Reformhas begun this process, rescindingmore than 2,000 regulations, but most of the repealed regulations were eitheroutdated or duplicative. Fewactual barriers to business start-up were removed.

The State ofMichiganrequires licenses for205 occupations. An additional 60or so occupations require licenses from the City of Detroit; businesses often needbuilding or equipment permits, ofwhich there are more than 70. For example, ajunk dealer needs an occupational license; his truck needs its own license; and thejunk yard needs yet another license.

CeilingsImmigrants and those outside the economic mainstream have gained a

foothold in this country in two major ways: driving vehicles-for-hire and streetvending. These occupations do not require formal education or large financialresources. An entrepreneur can earn a livingsimplybyworking hard.

Or at least it used to be that way.Detroit sharply limits the number of taxicabs and bans other forms of

community transportation. Through other ordinances, it also lowers thequality of work life for drivers, drives up the costs of owning a cab and lowersthe profit for those who lease. The City also has capped the number of foodvendors downtown; while it supposedly has not capped other types of vendors,in practice, securing the appropriate permits for any vendor can be next toimpossible.

TAXISIt is a difficultand dangerous occupation.I but driving a taxicab traditionally

has been one of the ways that low-incomepersons earn money for themselves andtheir families. However, taxi driving is becoming a less accessible form of self-employment, and the City of Detroit certainly does its part to keep low-incomeresidents out of this occupation.

The most formidable barrier is the limit Detroit has placed on the number oftaxi licenses (alsocalled"bond-certificates"). Because there are only 1,310 licensesavailable, it is expensive to obtain the right to drivea taxi. Newtaxi-owners cannotpurchase licenses from the City and instead must buy them fromprevious owners.The cost of the licenses ranges from $6,000 to $10,000 on the open market."Although technically onemay apply for an additional taxi license, the would-be taxiowner must demonstrate "public convenience and necessity" at a public hearing, avirtually impossible task. Noone has ever successfully obtained a license throughthis process. In fact, the larger taxi companies want the Cityto license even fewercabs than it does already. As a consequence, many drivers are forced to lease cabsat a rate of $46 for 12hours or $72 for 24 hours.

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Once a driver has found a medallion to purchase, the taxi must pass apolice inspection for cleanliness and safety. That seems reasonable enough, butthe taxi inspectors are notorious for their capriciousness. One owner of a smallertaxi company reported that police refused to list all improvements necessary topass inspection. The inspector would mention one item to correct, send the carback, and then raise another problem when the car returned. Thus, it often takesnumerous visits inorder to secure approval for the vehicle, and inspectors canrefuse approval for something as minor as paint scratches. Taxis must undergothis process twice each year, and each round through the process can take thebetter part of several days. As of January 1997, it will costs $70 per inspection. 5

In addition to the inspections, each taxi also must have a vehicle license, andthe driver must obtain a police check, a State ofMichiganchauffeur's license, anda City of Detroit public driver's license. In all, applicants must satisfy more thanten requirements in order to begin driving a taxi.

On top of the application process, taxi drivers face a final barrier in the formofexcessively stringent regulation of their conduct. ADetroit ordinance prohibitsdrivers from getting out of their cars, for any length of time, while at a taxi stand.Recently, police have begun enforcing the ordinance literally and have ticketedtaxis left momentarily by drivers who get out to grab a candy bar or stand outsideto wipe the car down. Several drivers have reported that this harassment was thelast straw and that they will now leave the business entirely.v

As a result of all these barriers, taxicab medallions command an artificiallyhigh price on the open market and entrepreneurs seek to avoid these regulationsin numerous ways, both legal and illegal.

SEDANS, LIMOUSINES AND VANSVehicles with the appropriate licenses and medallions to operate as a

taxicab can operate instead as a "sedan" and charge an hourly rate. The yearlycost of a sedan license is $288. The 1,310 vehicle cap applies to the total of taxisand sedans. As a consequence, only four or five sedans, all licensed to onecompany, operate in Detroit. In addition, sedans can carry no more than sixpeople, must be no more than two years old, and the driver must wear a uniform.

A 1996 revision to the vehicle-for-hire ordinances announces that Detroitwill place a cap on the number of limousines and vans in the city and willestablish additional regulations for these services. Under City regulations, a"limousine" essentially is any car service with a fixed hourly rate, while vansoperate on a fixed per-person rate. (Michigan does not distinguish betweenthese two categories; the same regulations apply to all vehicles carrying fewerthan 15 passengers.)

In 1982, Michiganremoved its cap on the number of for-hire vehicles. Whilethe licenses remain expensive, there is no arbitrary limit on their number. Thestart-up costs ofapproximately $450 in licensing fees ismuch less than the $6,000to $10,000 required to obtain a Detroit bond for a sedan." Because the bonds are

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so expensive, many drivers of car services decided to simply ignore the Detroitregulations and instead comply with the less onerous State of Michiganregulations for limousines.f The City, of course, maintains that these services fallunder Detroit jurisdiction.

Meanwhile, several taxi companies have sued the car services for operatingwithout the proper licenses. One of the issues to be decided in the case is whetherthe limousines and car services must complywith Detroit regulations. There hasbeen no decision yet.? but the decision is bound to profoundly affect the futureshape of transportation services in the Detroit area.

JITNEYSDetroit's determination to stifle commuter vans and car services is

particularly ironic in light of the failure of its public transportation monopoly_lODubbed "The Motor City" for its automobile industry, Detroit never evolved anextensive public transportation system. 1 1 However,many low-incomeDetroiters donot have their owncars.12 This means that their need foraffordable transportationis particularly acute. "Jitneys" or, more accurately, gypsy cabs, have become amajor source of transportation for the poor community. Their fares are lessexpensive, and, unlike taxicabs, they are easilyaccessible in poorer neighborhoods.Despite the great demand and need for the service among low-income riders,Detroit has declaredjitneys illegal.

Although the 'Jitney" drivers inDetroit do not at first seem to be organized,the structure of jitney service is actually quite complex. While there is littlecamaraderie and no formal organization ofjitney drivers, the market produces astructure of needs and services. Unlike in other cities, jitneys are not vans; theyare simply cars that their owners use to earn a little money. The jitneys operatemostly out of strip mall shopping centers. When someone leaves the grocery storeloaded downwith bags, a man will ask her if she needs a ride. Most jitney driverswill not service the whole shopping center but will attach themselves to one store.Thus, each driver has his territory. Well-knownjitney drivers often will transportthe store's employees to and fromwork as well. Manyofthe drivers are older men,now retired, who drive in order to earn extra money. Jitneys charge significantlyless than taxi cabs. Generally, a ride costs between three and five dollars. Thedrivers know that the riders they service cannot affordthe cost of a taxi.

Although the jitney drivers are illegal, market systems have arisen todetermine the reliabilityof a driver. First, employees of a store will recommend aparticular driver to new employees. Second, employees or security guards willknow certain drivers to recommend to customers. Third, drivers almost alwaysreside in the neighborhood they service, so they knowmany of the persons usingtheir car. Customers will tend to use the same drivers. Fourth, stores willinformally designate certain drivers by giving them a card from the store. Storemanagers hasten to add that they are not responsible for the drivers and that theydo not support them (since, of course, their use is illegal). However, the cardsindicate that the store knows the driver and that the driver can be relied upon.

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Drivers who have received such cards display them in the front window in muchthe same way as taxis display their licenses. Finally, some independent grocerystores 'Willactually list the name and phone number of a jitney service in theircircular. This is not common, however. Chain grocery stores, perhaps moreconcerned about the legality, 'Willoccasionally tell such drivers to leave. Mostly,however, the jitneys are tolerated and ignored. Laws against them are rarely, ifever, enforced.

There are a number ofways that these drivers are in violation of the law. Forone thing, they do not hold proper taxi licenses. Nor do theywish to. Realizing thattheir customers could never pay the taxi fares set by the City, they would not profitby charging fares that would make the service unaffordable. Even if they wereinterested, obtaining a taxi license is expensive, since the cap on the number ofpermits drives up the price fromanywhere between $6,000 and $10,000. For similarreasons, drivers are not anxious to gothrough the car-inspection process. Their carsusually are used for short distances, and their customers arewillingto accept a less-than-ideal means of transportation in exchange for lowerprices. When asked aboutthe possibility ofjitney licenses, many drivers are suspicious ofwhat it would meanto have to deal with the bureaucracy at the City/County Building.

By overregulating the transportation industry, the City has forced people tofind alternatives, often outside the law. And the most efficient ones appear to workprecisely because they avoid dealing with the City at all. Phasing out the cap onthe number of taxis, not creating caps on other transportation services, and simplyrelying on criminal background checks for drivers, safety inspections andverification of insurance would go a long way to opening up opportunity in thetransportation industry. The current barriers raise the cost ofentering the industryand sustaining a business. As a consequence, fewconsumers can afford the costof legal transportation services in a city where they desperately need them.

Vending and Merchandise SalesVENDING

Detroit also intensely regulates the occupation of vending-almostprohibitively. Vending should provide opportunities for those without the capital toopen a retail establishment. But the high level of regulation means that vendingcan be a full-time occupation for only a fewDetroit residents. The City of Detroithas divided the licensing of vending into a number of subcategories: food vendorpushcarts; street and foot vendors; and stationary vendors. Different rules applyto each, and a prospective vendor must go through different procedures for each ofthese licenses.

The food vendor pushcarts are most often called "hot dog vendors," becausethe only hot food they may sell is hot dogs. (Theyalso sell pre-packaged food anddrinks.) The Health Department has decided that hot dogs and sausages are the

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onlynon-"hazardous" food. Indeed, even the use of sauerkraut with the hot dogsis forbidden. AlthoughDetroithas many differentethnic populations, ethnic foodvending is prohibited. Hispanicvendors maynot competewith the hot dogvendorsby selling tamales, and Arabvendors may not sell falafeL Allother food sold by ahot dogvendor must be pre-prepared ina licensed commissary. Preparing foodathome, no matter howclean the kitchen, is prohibited.

To obtain a pushcart license, the would-be vendor must bring plans for thepushcart design to the DetroitHealth Department for approval, along with a $100nonrefundable fee. If the design is permitted, the vendor then constructs thepushcart and applies fora license. Alicense for a foodvendor pushcart costs $116per year. Food vendors also must obtain a foodhandler's permit, for which theytake a one-hour class and pay $5. Finally, all vendors must obtain a MichiganSales Tax License.

The real barrier forpushcart vendors is not the costs ofpermits, however. Itis the stifling lack of locationswhere they can sell their wares. There are only 16approved pushcart locations, and licenses are issued annually on a first-come,first-served basis. Although there is no cap on the number of pushcarts, the capon locations effectivelyoperates as a cap on the number ofcarts. In 1996, the Cityissued licenses for 14 foodpushcarts. None of the minority neighborhoods, suchas southwest Detroit or the eastside industrial corridor, have been approved aspushcart locations.

Both limiting the types of foods and requiring them to be prepared in alicensed commissary impose burdens on entrepreneurs, but one of the mostsignificant problems for would-be food vendors is the requirement that thepushcart be stored in a licensed commissary. Vendors thus must rent space ina restaurant or catering establishment to store their cart at night. One vendorwas able to run a successful food vending business for several years by storinghis cart in a friend's catering establishment. However,when the caterer movedto the suburbs, the vendor was forced to give up his business. He has nowpurchased a building to store the cart, but he has run up against Detroit's zoningrules. The building, although in a commercial zone, was previously used as anoffice and now must be rezoned for storage. Multiple consultations with theBuildings and SafetyEngineering Department, inspections and a public hearing(at a cost of $450) are required. As a consequence, he has been out of businessfor more than a year. While this one vendor's determination may get him backin business, there is no reason he should ever have needed to shut down.

STATIONARY VENDORSStands operatingin the "downtownand cultural area" ofthe Citymay sellonly

a fewproducts: balloons, flowers,fruit, candy, snack foods and caricatures. Theymay not sell T-shirts or any other merchandise. These licenses cost $86, andapproximately 20 licenses foredibles and 20 fornon-edibles have been issued. TheCity sets the number of these permits based on a "public convenience andnecessity" standard-almost always an impenetrable barrier to competition.

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FOOT AND STREET VENDORS

Foot vendors must carry their merchandise, and theymay sell pre-packagedfood. The Cityhas issued fewerthan 200 footvendor licenses. The cost ofa licenseis $86 per year. It is apparently not possible to vend goods from stands or tablesinmost parts ofDetroit. For example, onewoman who sells specialty baby clothesat El Mercado wanted to begin vending on a daily basis. When she made initialinquiries, she was told that she would not be able to vend downtown. In order tovend outside of downtown, she would have to operate as a foot vendor and carryher merchandise fromplaceto place. Since this is not a practicalmethod for sellingbaby clothes, she has given up, at least temporarily, on trying to grow thisbusiness. 13

Street vendors sell their goods from moving trucks. Theymay only stop tomake a sale. Ifa truck is used to sell food, it may not be used forany other purpose.Sellingfrom the familyvan, forexample, is illegal. Street vendor licenses cost $115.If the vendor carries only pre-packaged food he does not need a food handler'slicense. Although they do not need insurance, they need to receive tax clearance.Aswith foot vendors, street vendors must keep movingafter everysale.

There is no reason to limitvending inthis manner. The Citymay have somelegitimate interest in keeping the sidewalks passable and maintaining propersanitation at establishments that sell food. But Detroit's stringent regulations gofar beyond such concerns. Other cities freely permit non-food vending andcertainly allowthe sale of some items other than hot dogswithout any discernibleharm. 14 The current system benefits no one-not potential consumers andcertainly not potential entrepreneurs.

MARKETSThe limited licensing of vendors is alleviated slightly by the approval of

markets. Detroit has many special events, conferences, and festivals downtown,especially during the summer months, and the vending rules for these aresomewhat less strict. For example, El Mercado has 23 to 25 vendors each Sundayduring June through August. Community development groups will host specialevents at which vendors may operate as well. Manyvendors sell their wares onlyat markets or during special events, because it is too difficultto secure permissionto vend on a regular basis.

Occupational LicensingAfricanhairbraiding and child care are two other occupations that seemingly

require little formal education or capitaL As home businesses, both are also well-suited to people with children. Detroit and Michigan.have, however, determinedto make it as difficult as possible to pursue these professions. Extraordinary

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education requirements forhairbraider licensing, as wellas a prohibition on homebusinesses like braiding, and expensive license and permit requirements for childcare conspire toprevent entrance into these fields. Or to force such businesses tooperate underground.

COSMETOLOGY

Africanhairbraiders in Michiganmust have a cosmetologylicense, for whichthey must receive 1,500 hours of training. Barbering requires 2,000 hours. It isnot clear why such lengthy training is justified by the need for public health andsafety. Indeed, other activities require significantly less training. Emergencymedical technicians must take 1,072 hours ofclass for licenses; electrologists andmanicurists take 300.

Of course, many persons who go to cosmetologyschool perform haircuts,permanents, styling and haircoloring. However,Detroit has a large population ofAfrican-Americans,and there are many peoplewhoearn their livingbyhairbraidingand other forms of natural hairstyling, like locking and twisting. Detroit'scosmetology licensing scheme is particularly ill-suited for hairbraiding. Mostpeople who do hairbraiding learned it as children, from friends or family. OneDetroit hairbraider clearlyremembers the first time she was paid for her services-at age Ll+-when she copied an extravagant style in a magazine and styled hersister-in-law's hair. She received $100 and has been earning a living fromhairbraicling ever since.

Persons seeking a license to hairbraid generally already have the skills andsimply need a license. To obtain the cosmetologylicense allowing them to braidhair, they must take 1,500 hours of classes, none of which cover hairbraidingtechnique. Afewhours are devoted to learning about hair and skin diseases andthe anatomy of hair. A fewmore teach sanitation techniques. At most, suchclasses consume 270 hours. IS While nearly all hairbraiders agree that theseclasses are useful, they also agree that the rest of the curriculum is completelyuseless. In sum, there is no connection between obtaining a cosmetology licenseand the purported goalofensuring the quality of servicefor the customers.

Sheila Everette-Hale had been braiding hair for 18 years without a licensebefore she decided to get licensed. Because she performed secretarial work at thecosmetology school, she was able to geta discount and paid only$1,500 instead ofthe usual $4,500. She went to school full-time for eight months, foregoingalmostall of her income during that time. At the end, and without having acquired anynew skills, she obtained her license and went back to doing exactlywhat she hadbeen doing before. The onlydifferencewas that, as a legaloperator, she could nowmove the business out ofher home and open a hairbraiding salon. Now,her salonemploys fivebraiders and has a steady stream ofbusiness.

Everette-Hale also took a class entitling her to become a cosmetologyinstructor. However,shortly after she completed teaching a hairbraiding class at alocal community college,she received a call from the cosmetologyboard notifyingher that she was only supposed to teach hairbraiding within the context of a full-

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CHILD CARE

The increasing demand for child care makes it an ideal career for abudding entrepreneur: Caring for children requires kindness and commonsense, but not higher education. These qualities should make it one of the.easier fields to enter. Moreover, many families are able to combine caring fortheir own children with caring for a few extra.Iv Michigan already has ashortage of child care, especially for infants. Infant care is particularlyimportant as Michigan tries to move women fromwelfare to work 17 Child carein Detroit cost between $75 and $100 per week in mid-1995, depending uponthe age of the child. IS And although child care consumes around 10 percent ofincome for the average family, it consumes as much as 27 percent of the incomeof poor families.J? Stringent government-imposed training and educationalrequirements on licensed centers contribute to the high cost of child care.20 Infact, a 1996 report of the Governor's Advisory Committee on Day Care forChildren recommends relaxing some of the licensing requirements.v!

CHILD-CARE CENTERS

Opening a childcare center outside of a home requires a number of licensesand permits, educational qualifications, and compliance with a variety ofregulations. The center must be run by a program director who has taken 60semester hours of course workfrom an accredited college(12of those hours mustbe in child development or childpsychology). The MichiganFamily IndependenceAgency inspects the premises, as does the local fire department. The rules for achild-care center govern, among other things, staffmg ratios, equipment, food,paperwork, space per child, outdoor space, all aspects of infant care, buildingconstruction, paperwork to be provided to parents, creation ofprogram plans, andequipment descriptions.

Although the licenses and rules require some effort to obtain and complywith, another major barrier to operating a day care center comes in the form ofbuilding regulations, including zoning, and interior and yard-space requirements.These requirements are particularly burdensome for a business trying to providechild care for the children of employees. On the one hand, Michigan wantsbusinesses to provide child care.22 Yet on the other hand, the State makes italmost impossible for a small business to do so. Anyfacility that is not a homemust be licensed as a child-care center, even if only a few children attend thefacility. The design, building, space, recreational, and educational requirementsare simply too demanding for a small business to handle. With a shortage of goodchild care and the obvious advantage of having the children near their parents,businesses must choose between simply ignoring the child-care law and hopingnot to get caught, or telling their employees to find care elsewhere.

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FAMILY AND GROUP CHILD CAREBoth family and group child care are provided in the home by a resident of the

home. Family child-care homes have between one and six children, while groupchild-care providers have between six and 12. The educational requirements arerelatively limited. The provider must be at least 18 years old and have taken firstaid, CPR, and the State's child-care orientation course. For group child care, theprovider must have taken at least 20 hours of class. Specificregulations detail theplay and sleep equipment, the amount of indoor space per child (35 square feet), theamount of outdoor space (400 sq. feet), the requirement of a daily activity program,and food to be provided. An inspector must approve the home for child care.

The problem for home-based child care lies not in the personal licensurerequirements, but in the strict requirements for the home to be used, the programsto be provided, the excessive cost ofcomplyingwith the specificregulations, and thedifficultyinsecuring the appropriate zoning for day care. Overregulation results inno regulation at all: as many as 15,000 child-care providers in Michigan operatewithout a license.23 The State's dimensional and physical requirements for familychild-care facilities virtually prohibit child care in apartments. Of course, thisdisqualifies almost anyone who does not have enough money to own a house fromproviding family child care. Especially in light of the shortage of affordable childcare and the need for child care for the children of poor women seeking work, itmakes no sense to virtually prohibit child care in apartments.

Further, while family child care does not require special zoning, group childcare does. In areas zoned for one- or two-family homes, a caretaker may not carefor more than six children, and any zoning variance requires a $450 hearing. Inmultifamily areas, more children are permitted. However,to obtain the appropriatezoning, a child-care provider must spend a minimum of$500 and as much as $950for a variance for problems such as a backyard that is too small. Although childcare would seem to be a career well-suited for an entrepreneur with children andfewresources except her home, the regulatory costs can be prohibitively high.

Unlike some states, Michigan's educational requirements for child-careproviders do not disqualify poorer or less-educated women. And while theregulations are elaborate and seem to go far beyond legitimate public health andsafety concerns, the barriers to child care as an entrepreneurial venture are fewandeasily identified, A few simple legal changes would make providing child caresignificantly easier. First, home-based child care should be permittedautomatically inall residential neighborhoods, including multifamily areas. Manycities use this approach. This would eliminate immediately more than $500 instart-up costs. Second, the detailed physical and dimensional requirements shouldbe modified so that it is possible to provide child care in apartments. Third, smallchild-care facilities for children of employees at a place of business should belicensed like home-based child care, with exceptions from the regulations forrequirements that obviously could not be followed, like yard size. Additionalregulatory improvements would reduce the sheer complexity of the regulationsgoverning all child-care facilities.

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Red Tape and FeesSome of the most severe barriers to enterprise in Detroit stem from the

stupefying bureaucracy and regulations governing buildings and their uses.Multiple inspections and inspection fees, incomprehensible building requirements,expensive, mandatory public hearings, arbitrary discretion by officialsand lengthyprocessing delays combine to discourage entrepreneurs fromundertaking businessventures or improving existing ones.24 In 1994, a mayor's commission undertooka study of the regulatory process. It evaluated licensing and permitting in the cityand found systematic problems, concluding that "businesses hesitate to locate orexpand in the City because of difficulties in obtaining the licenses and permitsnecessary to operate."25 Several changes resulted from the task force report,including a "one-stop permit station" for Buildings and Safety Engineeringpennits.26 The older system required applicants to go to different floors andbuildings to seek plan approval. Nowapplicants go to one room for all buildingsand safety engineering requirements and then another room for zoning issues.

The intention of the task force recommendations was that the process wouldbecome quick, painless and efficient. However, applicants still must obtainnumerous approvals and comply with detailed requirements, so a trip to theCity/County Building remains a lengthy and frustrating excursion.k? Thosebusinesses that also need togothrough the City'sPlanning Department are furtherdelayed.28 And while a one-stop shop was also established for licenses, somelicenses, such as landscaping, still require a trip to another building.

PERMITSDetroit's licensing, permitting and zoning systems seem to be designed to

force the deterioration ofallbusinesses and buildings within the city limits. Zoningand permit rules severely discourage any improvements on buildings. Anyalteration or repair requires the owner to bring the building entirely intoconformance with the code. It is thus more sensible to let buildings fall into totaldisrepair than to attempt to improvethem. Likewise,continuing the same businessis easy, while any change inbusiness, even in a commerciallyzoned area, is fraughtwith problems.

Each business needs a general "doing business as" license, as well as anylicenses required for the particular occupation. In addition, businesses areregularly inspected by some combination of the following: electrical, plumbing,water and sewage, fire, health, cranes, signage, air conditioning, venting, generalbuilding and safety.29 Each department or division that visits charges for theinspection. Although the inspections are supposed to be annual, some businessesreport more frequent visits by certain departments and non-existent ones byothers. Inspectors routinely require minor changes in practice-adding push-pullsigns on doors, for example.

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There appears to be no coordination among the various City departments.For example, one auto repair business discovered it could not get a license tooperate because the property was zoned for a gas station. Rather than challengethe zoning, the business operates without proper zoning, and the owner just hopesthe regulators won't notice. Building and other inspectors regularly visit and issuepermits. Some businesses have never received a visit from the sign inspector.Others receive them regularly. One printing shop chose to cut its sign out of vinyland paste it on its building just to avoid the sign tax. There is a charge, dependingon the size, for each sign. In order to plant a tree in front of your business, youmust obtain a permit. And, if you call the correct department, you will be toldwhich trees are permitted on your street. (Aswith many Detroit rules, this one islargely ignored. Few people even know about this requirement.)

All construction that takes place in the City of Detroit must be approved byall the necessary departments. "Aminimum of three inspections" is required. Acertificate of occupancy is also needed. For a business, any additions or alterationsrequire permits. Building storage requires a permit. Adding a handicap ramp,replacing the roof, building a dock, and any changes to electrical, plumbing orheating needs a permit. To apply for a permit, one needs to fill out the appropriateform and bring triplicate copies of building and plot plans, and a number of otherdocuments. Other papers, other permits and public hearings may be required."The Department must fully understand what you intend to do. That's why somuch information is required. And since it becomes a matter of public record, werequire that all the necessary information and plans be complete, legible, properlyscaled, typed or written in ink and otherwise c1ear."30 Because the Department isunderstaffed and inefficient, permits can be almost impossible to obtain. Manypeople therefore believe it is simply better to proceed without permits. Onebusiness owner explained, "We operate on the basis that we just do what we wantto do and the permits will catch up with us sometime." Of course, such a policycarries risks. If the Department discovers the violation, there can be penalties.

Obtaining a permit for some change in a building is something few want toeven consider. A trip to the City/County Building can easily turn into an all-dayaffair, involving the payment of various fees. It is never routine. There are feesbased upon the building costs. Many activities require public hearings, includingchange of occupancy, change of use, or any deviation from the zoning codes, andall hearings require additional fees.

Detroit's rule that any change in the structure of a building requires that theowner bring the entire building into compliance with the current code serves todiscourage owners from improving their buildings or businesses in any way. Oneof the most difficult problems for small businesses in Southwest Detroit, says KathyWendler of the Southwest Detroit Business Association, is the need to obtain off-street parking for businesses. Thus, any time someone wants to improve a buildingor begin a business, that person must somehow find off-street parking. Any changein the structure of an old business means that the entire building must be broughtup to the current zoning code requirements. Since there is ample on-street parkingin the neighborhood, it is not clear why the City requires this. However, in order toask for a variance, one must make a $450, non-refundable application fee to the

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Board of Zoning Appeals (BZA). Avoiding a hearing is a definite goal, because thedecisions of the BZA are often arbitrary. As one employee commented, "It alldepends what they had for breakfast .... You think you lmow what they're going todo, but sometimes they go off on tangents." Even when the result is favorable, ittakes at least two months to secure a hearing and decision.

The need for a zoning variance often discourages small businesses frommaking improvements or expanding. For example, one small grocery owner wantsto build a warehouse to store surplus goods. In order to do so, however, he willneed to acquire off-street parking, which he does not own, or secure a variance. Hebelieves it is pointless to apply and does not want to waste his money.

Indeed, sometimes the red tape involved can itself prevent even permittedactivities. In one instance, a business owner was repeatedly told that he could notobtain a permit to install car barriers in front ofhis business. (The building, locatedat a poorly lit T-intersection, had been repeatedly damaged by cars.) In fact, therewas a procedure for obtaining this permit, but none of the many departmentsconsulted seemed to know what it was. After several months of being told thepermit would not be granted, the owner gave up. Eight months later, his store wasdemolished by a car. It was only after a renewed search for a permit to installbarriers that a single individual at one agency was discovered who knew theprocedure for getting this permit. It remains to be seen whether the owner willactually receive it.

Building permits and zoning constitute some of the most serious barriersfor small entrepreneurs in Detroit. Revision of the system of permits andrequirements would encourage entrepreneurs to purchase and clean up someof the many abandoned buildings in the City'S business districts. For example,the number of types of businesses permitted automatically in business areasshould be dramatically increased. The City should eliminate the requirementfor a hearing, with its accompanying financial and time costs, every time abusiness is changed. Zoning and other building requirements must besimplified and reduced. And the City should eliminate the need for anexpensive zoning and/ or building and safety engineering hearing for mostbusiness activities. Only a reduction in the quantity of regulations governingbuildings will help. With specifications this intricate, a stalled process is thepredictable result. The purpose of the building requirements should be limitedto true health and safety requirements.

HOME BUSINESSES

Home businesses form a growing segment of business throughout thecountry, and many of them flourish in Detroit. 3 1 Zoning prohibits homebusinesses in residential areas of Detroit, even businesses that do not generate anykind of nuisance. like many other legal rules in Detroit, the home-businessprohibition is largely ignored by the government unless someone complains.VThus, many businesses operate successfully out of homes-from clothing retail to

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graphic design. However,having a home business is not without consequence."The first thing we tell them is to get a location," says Nathan Davis of the DetroitEconomic Development Corporation. Businesses cannot secure loans when theyare operating illegally,even if the law is unlikely to be enforced.33 Nor do they liketo advertise. And they have to be careful about not having too many visitors, ortheir neighbors might report them.

There are many reasons for choosing a home business: lower costs, nocommute, no child care, the abilityto spend more timewith one's children, flexiblehours, and the ability to be one's own boss. For families that cannot afford childcare, a home business may be the only option. Cathy McClelland of the DetroitEntrepreneurship Institute works with poor women, primarily recipients of publicassistance, to become self-sufficient through entrepreneurship. She explains,"Whenyou're starting out, particularly ifyou're low-incomeor onwelfare, you don'thave the money to rent officespace and pay utilities. And ifyou're at home, takingcare of children at home, you can make a decent profit. Ifyou take that away, it'salmost impossible." As limits on public assistance come into effect, former welfarerecipients will need tobecome self-sufficient. Government can ease this process byremoving pointless prohibitions on home businesses.

ConclusionDetroit is plagued by an intimidating bureaucracy, stifling and expensive

rules, and a lack of easily obtained information. It doesn't need to be this way.Despite its poverty, Detroit is an astonishingly vibrant city. It is full ofentrepreneurs with ideas, energyand dreams. ''Theseare the peoplewho make thejobs in the inner city," says Kathy Wendler, executive director of the SouthwestDetroit Business Association.

The future ofDetroit rests as much with small businesses as large ones. Butgovernment will have toget out of the way to allowthe residents ofDetroit to reachtheir true potential. "We'reonlyhurting ourselves with these regulations" explainsLinda Stingl, Industrial Development Manager at Warren/Conner DevelopmentCoalition. "Alot of people are starting their own businesses here but excessiveregulation makes them operate underground."

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Endnotes1 Roger Martin, "Michigan Must Refocus to Recruit, Keep Small Employers," Detroit

News, May 20, 1996, at Fll.2 U.S. Department of Commerce, County and City Data Book, at xxx-xxxi, Table 3

(l2th ed. 1994} (unemployment data from 1991, other data from 1989}.3 The National Institute for Occupational Safety and Health recently found that driving

a taxi is the most dangerous occupation in the country. "Cab Driving TermedRiskiest Job in U.S.," The NewYork Times, July 9, 1996, at A14.

4 When a license is sold, there is a $35 transfer fee. Maintaining a taxi plate (or"medallion") and a paper license to place in the vehicle costs an additional $208 peryear.

5 This report attempts to document the costs and procedures for licenses and permitsin late 1996. However, both prices and procedures change frequently. Thus, dollarfigures and regulations are subject to change.

6 One hypoglycemic cab driver received a $100 ticket while purchasing a candy bar.Jeff Gerritt, "Door Slams on Careers," Detroit Free Press, Aug. 3, 1996, at 3A, SA.7 Since Detroit has just established the new categories of limousines and commuter

vans, it remains to be seen how expensive the bonds for these will be and how manyvehicles the City will allow.

S Michigan requires several licenses and an annual inspection for limousines. WhileDetroit's start-up costs for limousines are less than Michigan's (approximately $360compared to $450, excluding registration and insurance), the annual cost for aMichigan limousine is only $130, compared to $405 for Detroit. And of course, ifDetroit classifies the car as a sedan, rather than a limousine, the start-up cost wouldalso include purchasing the bond. Moreover, Detroit requtres inspections twice ayear, and there is the unknown effect of the yet-to-be-determined cap on limousines.9 Craig Garrett and Phil Ltnsalata, "Cabbies ask Judge for Fair Fight over Fares," TheDetroit News, May 15, 1996, at 03.

10 "Competition is the Ticket," The Detroit News, April 1, 1996, at A8; George Cantor,"Can Government ReallyReshape Bus Service?"TheDetroit News,Aug. 5, 1995, at C7.

11 George Cantor, "Can Government Really Reshape Bus Service?" The Detroit News,Aug. 5, 1995, at C7.

12 Over ten percent of working Detroiters depend on public transportation. U.S.Department of Commerce, City and County Data Book, at xxxi, Table 3 (12th ed.1994). Undoubtedly, many of the unemployed also do not own cars.

13 Detroit regulations in many areas, including vending, are so complex that it can bedifficult to get correct information. For example, information about the legality ofstreet vending of non-food items outside downtown is difficult to locate. While it ispossible that there is some way to do this legally, only the most diligent ofinvestigators could discover it.

14 The streets of Philadelphia, for example, reveal carts selling falafel, Chinese food, andMexican food, as well as hot dogs.

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15 Sanitation and Bacteriology (90hours); scalp and hair treatments (25 hours); patronprotection (80 hours); applied chemistry (30 hours); anatomy, physiology andhistology (45 hours).

16 Some parents choose home day care as a way of spending time with their ownchildren and earning money at the same time. See Charles Ramirez, "For Many,Home is Where the Job Is,"The Detroit News, Nov. 13, 1995, at Business.17 Judy Putnam, "State's WelfareJob Requirements is Creating Child-Care Dilemma,"The Grand Rapids Press, Dec. 23, 1995, at A4.18 Earlisa Gibson, "AsDay Care Costs Climb, Parents Just Grin and Pay," The Detroit

News, July 6, 1995, at C5.19 Ibid.20 Ibid.21 Child Care: Making itWork,AReport of the Governor's AdvisoryCommittee on Day

Care for Children (Feb. 1996). at 5-7.22 Ibid at 1-2.23 "Shared Work on Day Care," The Grand Rapids Press, April 24, 1996, at A14.24 State and local taxes create yet another problem for businesses. Michigan personalincome tax is 4.4%. Detroit has a 2% corporate income tax and a 5% utility users

tax. Additionally, Michigan, Detroit, and Wayne County, where Detroit lies, haveproperty taxes totalling $76.87 per $1,000 of value per year. Businesses also aresubject to the much-despised "personal property tax," which taxes all the movableproperty owned by the business.

25 Task Force ofMayorArcher, Licenses and Permits: Passports to Opportunity (Aug.1994), at 4.

26 Lekan Oguntoyinbo, "One-Stop Station Eases CityPermits," Detroit Free Press, Jan.12, 1996, at lB.

27 "License to Kill,"The Detroit News, Sept. 20, 1996, at 8A.28 Valarie Basheda and Phil Linsalata, '''Quagmire' Puts Development in Detroit atRisk," The Detroit News, July 16, 1996, at Al.29 The owner of a used bookstore recently reported that his office building must pay

nearly $500 in annual fees: fire inspection ($47), general inspection ($I05},refrigeration license ($64), awnings license ($44), elevator license ($100), boileroperator license {$28}.and plumbing cross-connection control license ($85). JohnK. King, Letter to the editor, The Detroit News, Sept. 29, 1996, at 6B.

30 City of Detroit Buildings and Safety Engineering Department Brochure, "2-Obtaining Permits" (Nov. 1995).

31 Charles Ramirez, "ForMany, Home isWhere the Job Is,"The Detroit News, Nov. 13,1995, at Business.

32 Jeffrey McCracken, "Cities Don't Harass LOW-KeyHome Biz," Crain's SmallBusiness, June, 1994, at 5.

33 The problem of obtaining capital or other business assistance affects all nonlegalbusinesses.

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T dS d G db Cit; fD t itaXISan e ans overne )y uyo e rorPermit Required Permit Cost Issuing Office RenewallExpirationChauffeur's license $20 Any branch officeof the Four years

Secretary ofStateTitle $11 Anybranch officeof the One-timeSecretary ofStateRegistration Varies according to Any branch officeofthe One-time

weight: $2.20fl00lbs, Secretary ofStateplus $15

Insurance $5,300 Private One yearVehicle bond-certifica te Open market = $6,000 Private owner; or One-time

10,000 plus $35 Detroit Department oftransfer fee; or $219 if Consumer Affairsavailable fromcity

Public driver's license $10 plus police check Detroit Department of One yearConsumer Affairs andPolice Department

Vehicle inspection After 1/1/97 = $70 Detroit Police Sixmonthspass or fail (now >free Department; Fleetif fail, 50 if pass) Control Division

Vehicle license $208 Detroit Department of One yearConsumer Affairs

Taximeter approval $15 for first seal, no City Sealer ofWeights One year, unless complaintcharge for annual seal and Measures or broken sealunless meter fails or (Division ofseal is broken, Failure Department ofof inspection or a new Consumer Affairs)seal costs $15

L' de t V tr c db C't fDt itimousmes an ornmu er ans 1 overne ,y IcYa e rOI :Permit Required Permit Cost Issuing Office RenewallExpirationChauffeur's license $20 Anybranch officeof Four yearsthe Secretary of

StateTitle $11 Anybranch officeof One-time

the Secretary ofState

Registration Varies according to Anybranch officeof One-timeweight: $2.20/1001bs. the Secretary ofplus $15 State

Insurance Varies byvehicle Private OneyearPublic drivers license $10 plus police check Detroit Department One year

(usually just clear to ofConsumer Affairsensure clean record)

Vehicle inspection for $70 beginning 1/1197 Detroit Police Sixmonths"continued fitness and Department, Fleetsafety of public use" Control DivisionVehicle license Limousine = $250 Department of One yearCommuter Van>$200 Consumer Affairs

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L' S d C v tr c db M' hirmousrrie, e an, or onunuter ans 1 overne IY lC 19an:Permit Required Permit Cost Issuing Office RenewaliExpirationChauffeur's license $20 Any branch officeof Four yearsthe Secretary ofStateTitle $11 Any branch officeof One-timethe Secretary ofStateRegistration Varies according to Any branch officeof One-time

weight: $2.20/1001bs. the Secretary ofStateplus $15

Certificate ofAuthority $300 Michigan Uptran One-time(per company not per State Office (Statecab) Transportation

Department)Inspection Approx. $49lhour Private One year

plus $5 fee to file proof ofinspection for renewal

Insurance Varies by vehicle Private One yearPersonal record check Nocharge Michigan State One-time

TransportationDepartment

Decal and Certificate $50 Michigan Uptran One yearState Office

Pushcart VendorsPermit Required Permit Cost Issuing Office RenewalJExpirationPushcart license $116 Department of One year

Consumer AffairsPushcart $91.66 Detroit Health Sixmonthssanitation/health (If re-inspection is Departmentinspection necessary = $50)Cart design approval No charge Planning and One year

Development, Divisionof Department ofConsumer Affairs

Food handler's permit $5 Detroit Health One yearDepartment

Insurance Approx. $1600 Private AnnuallyMichigan sales tax $1 Michigan Treasury One yearlicense Department"Ownership change" $150 Detroit Health One-time if applicableinspection Department

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26/31

Child Care Center (non-residential)Permit Required Permit Cost Issuing' Office RenewaVExpirationLicense 1-20: $50 original; Michigan Department Two years

$25renewal ofConsumer and21-50: $60original; Industry Affairs;

$30renewal Bureau ofRegulatory51-100: $70 original; Services; Divisionof

$35 renewal Child Day Care100 or more: Licensing$80original;

$40renewalEducation: Tuition varies Accredited collegeor One-time60 semester hours wI universityat least 12 hours inchild development,childpsychology, orearly childhooddevelopmentMedical Tests (T.B.) Varies Private One-timeFurnace Inspection Approx. $50-60 Private One vearWood-burning Stove Varies Private, qualified fire One-timeInspection (If inspector, insuranceapplicable) co.Department of

Labor, local buildinginspector

Fire Safety Inspection Varies fromcounty-to Private, qualified fire One-timecounty inspector, insuranceco.,Department of

Labor, or localbuilding inspector

Environmental Health No charge, State Detroit Health One-timeDepartment pays Department

Zoning In business areas, Detroit Buildings and One-timeallowed as right. Some Safety Engineeringresidential areas require Departmenta "permit with approval"::::$500.In other residentialareas, a $450 hearingbefore the Board ofBuildings and SafetyEngineering Departmentis required.

Variance $450 (for required Detroit Board of One-time(If indoor/outdoor does hearing beforeBoard of ZoningAppealsnot meet space ZoningAppeals)requirements)Construction costs Varies depending upon Private One-time(If no variance granted what needed to meetor if want to comply) space requirements

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Family Care (residential, 1-6children)Permit Required Permit Cost Issuing' Office RenewallExpirationRegistration certificate $25 original; $10 renewal Michigan Department 3 years(family) of Consumer and

Industry Affairs;Bureau ofRegulatoryServices; Division ofChild Day CareLicensing

Test (medical TB) Varies Private One yearFirst aid and CPR Some community classes Varies One-timeclasses required for freeFurnace Inspection Approx. $50-60 Private One yearWood-burning Stove Varies Private, qualified fire One-timeInspection (If inspector, insuranceapplicable) co., Department of


Fire Safety Inspection Varies from county to Private, qualified fire One-timecounty inspector, insuranceco., Department of


Variance $450 (For required Detroit Board of One-time(Ifindoor/outdoor hearing before Board of Zoning Appealsdoesn't meet space Zoning Appeals)requirements)Construction costs Varies depending upon Private One-time(If no variance granted what needed to meetor if want to comply) space requirements

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Group Care (residential, 7-12 children)Permit Required Permit Cost Issuing Office Rene waI/Expir ationLicense (group) $40 original; Department of Two years

$20 renewal Consumer andIndustry Affairs;Bureau ofRegulatoryServices; Divisionofchild day carelicensing

Test (medical TB) Varies Private or local health OneyeardepartmentEducation= 20 hours Varies; many free Private One-time; but "stronglywith no less than 8 community conferences encouraged to continuehours in child provide this training attending"developmentFurnace Inspection Approx. $50-60 Private One yearWood-burning Stove Varies Private, qualified fire One-timeInspection (If inspector, insuranceapplicable) co., Department of

Labor, local buildinginspectors

Fire Safety Inspection Varies fromcounty to Same One-timecounty

Zoning Some residential areas Detroit Buildings and One-timerequire a "permit with Safety Engineeringapproval" :::$500" DepartmentIn other residentialareas, a $450 hearingbefore the Board ofSafety& Engineering isrequired"

Variance $450 (For required Detroit Board of One-time(If indoor/outdoor does hearing beforeBoard of Zoning Appealsnot meet space ZoningAppeals)requirements)Construction costs Varies depending upon Private One-time(If novariance granted what needed to meetor if want to comply) space requirements

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30/31

I R d fBnspecuions equ rr e 0 usrnessesPermit Required Permit Cost Issuing Office RenewaIJExpirationElectrical inspection $78 Electrical Division of OneyearBuildings and Safety

EngineeringDepartment

Plumbing inspection $85 Buildings and Safety One yearEngineeringDepartment

Water and sewage Varies depending on Board ofWater One-time wheninspection work Commissioner constructing, no annual

inspectionFire inspection $39 and up Fire Department One yearHealth inspection Free nowwill be approx. Board ofHealth; One yearincludes lighting and $75 in new season Industrial Hygieneventing DivisionAir conditioning $45 Buildings and Safety Two yearsEngineering

DepartmentGeneral safety Approx. $97 (Depends on Buildings and Safety Two yearsequipment being Engineering

inspected) Department

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BIOGRAPHYDANA BERLINERStaff Attorney

Dana Berliner serves as a staff attorney at the Institute for Justice. Shelitigates civil rights, economic liberty, property rights, and other constitutionalcases in both federal and state courts. She currently serves as lead counsel in aMinnesota case challenging the state's right to use private land that has beendesignated as "publicwater." She vigorouslylitigates the Institute's challenge to theDavis-Bacon Act, which creates a super-minimum wage on all federally fundedconstruction projects, on the grounds that it discriminates against minoritycontractors and workers.

Berliner received her law and undergraduate degrees from Yale Universitywhere she was a member ofthe YaleLawJournal and represented clients throughthe legal services program. Afterlaw school, she clerked for Judge Jerry Smith onthe United States Court ofAppealsfor the Fifth Circuit.

Her ideas have beenquoted inUSAToday, Investor's Business Dailyand TheMinneapolis Star Tribune as well as on various radio and televisionbroadcasts.The Institute for Justice is a public interest, non-profit law center created to advance a rule oflaw under which individuals control their destinies as free and responsible members of society.Through strategic litigation, training, and outreach, the Institute secures protection for individualliberty, challenges the scope and ideology of the Regulatory Welfare State, and illustrates andextends the benefits of freedom to those whose full enjoyment of liberty is denied bygovernment. The Institute was founded in 1991 by William H. Mellor and Clint Bolick.

how detroit drives out motor city entrepreneurs

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