A Conversation about the Commonwealth of Belle Isle

Yesterday I learned about a proposed free city in the United States through Arnold Kling. The project, called the Commonwealth of Belle Isle would be located on an island on the Detroit River that is currently a city park. The proposal comes from Detroit real estate developer Rod Lockwood who recently wrote a novel that takes place 29 years in the future when the city-state is developed and prosperous.

When Rod wrote the book, he wasn’t aware of the support for international charter cities from economists like Paul Romer and investors like Michael Strong. He said that he got the idea for the city when he was running a marathon that crossed into Belle Isle. “Necessity is the mother of invention. The current state of Detroit led me to think about possible solutions, and I realized that Belle Isle could be the next Singapore or Hong Kong.”

As Arnold Kling points out, Rod’s background in real estate development gives him advantages over some other charter city boosters without this background. “I do understand the costs involved in greenfield development such as utilities and I have site planning experience,” Rod said.

To move to the city, residents would have to pay $300,000 under the proposal to cover initial infrastructure costs. Rod sees the 982-acre island as home to 35,000 people. The city would be a walking city, with cars stored off of the island, and the initial infrastructure would include a monorail system. Rod said that being a car-free city outside of emergency vehicles and service vehicles is an important quality of life issue. “When I started researching city-states, I looked into Monaco, which does have cars and roads,” he explained. “It would be nice to have more green space than Monaco, and being a walking city will allow for that.”

Rod identifies himself as a libertarian, but doesn’t hold the view that a banning cars limits liberty. “It’s not a matter of liberty, it’s practicality. In a dense community, the automobile is not practical. Plus we’re not forcing anyone to live here, so if they want a car they can live elsewhere.” Aesthetics are an important selling point for the proposal, and Rod says that a visionary master planner is a key piece of the development. “It will be a high-density situation, and many details need to be worked out. A free market with no zoning wouldn’t work turn out well when you’re talking about developing an island.”

Aside from the car-free lifestyle which would put the Commonwealth in a very small handful of American cities, the primary policy difference lies in taxation and government services. Rod proposes that residents would pay a federal head tax of about $2,000 per year to cover their per capita share of  national defense. Residents would not pay any other federal taxes or receive any other federal services. For municipal services, the only tax would be a Georgist land tax, and government expenditures would be capped at 10% of GDP. “We’re not taxing income or capital gains because we want to encourage people to work and invest in tools, equipment, and technology. Likewise, we’re not taxing improvements on land because we want to encourage development.”

While the project would have many hurdles to cross at every level of government, Rod points out that the commonwealths of Puerto Rico and the Northern Mariana Islands provide precedent for jurisdictions that have different tax structures from residents living in the states. He says that the reason Detroit, Michigan and the United States should want to see this project go forward is because the new city would have a  “tremendous positive effect on Detroit. This is precedent setting. The U.S. government would consent because Detroit is a problem city. I wish it weren’t but it is, and this would be a game changer.”