Zone is Where the Heart is? Lessons from Detroit Employers

Abstract

The author asked case-matched Black and White Detroit employers about their location and how they think customers and other outsiders view the city of Detroit. Nearly all of the city-based employers indicated that land and operating costs in the city of Detroit were lower than in the surrounding suburbs—even without incentives. Both Black and White employers also stated that Detroit was perceived as unsafe and forbidding by customers and outsiders. However, only Black employers felt that the lower costs associated with a Detroit location, sometimes coupled with their community goals, outweighed the perceived costs of this city's negative image. The author discusses the policy implications of these findings in the context of "place"-based incentives, such as enterprise zones and related economic development programs.