Detroit Initiative Shuts Down 300 Illegal Businesses

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A Detroit initiative designed to crack down on illegal businesses has realized 80 percent compliance from businesses that have entered the program since January, city officials said Monday.

Operation Compliance was first launched by Detroit Mayor Bing earlier this year to identify “businesses that are not in compliance with the city of Detroit’s codes and ordinances,” says Bill Nowling, spokesman for the emergency manager. Code ordinances may involve zoning, building regulations, or property maintenance.

Over the past eight months, 302 buildings have shuttered as a result of Operation Compliance. Helen Broughton, a business advocate for the Buildings, Safety Engineering and Environmental Department (BSEED), says “the intent of the program is not to shut businesses down, it’s to bring businesses into compliance.”

A statement released earlier this year says that the enforcement of city codes ensures the safety standards of Detroit’s buildings, as well as the welfare of owners, employers, and customers. It explains that, “Detroit Police have found that illegal businesses are sometimes tied to illegal weapons, stolen goods, or drugs.”

The businesses targeted for Operation Compliance have multiple violations or have not made their property available for safety inspections. In each case, BSEED, which leads the operation, contacted the business by letter in fall 2012 but received no response.

Among the most common compliance issues are illegal occupancies, which oftentimes result with, “customers (asking) for more time to comply violations,” Nowling says.

When asked about challenges the program’s enforcement team has faced, Nowling says there have been “tenant and landlord disputes regarding compliance of violations. We also have some hostility at the job site in the event it is decided to close the building.”

As the BSEED looks to the future, Nowling says the department plans to continue with the program and is currently in discussion with the city’s law department to see what adjustments or modifications may need to be made.

Not everyone is impressed with the results of the Operation Compliance initiative. Michael LaFaive, director of the Mackinac Center for Public Policy in Midland, is concerned that the program has a negative impact on some of the city’s small businesses. He argues that some have sidestepped the codes and ordinances to avoid dealing with confusing regulatory burdens.

“One retailer I know bought a building, put newspapers in the window, and did all the electrical and mechanical work himself,” LaFaive says. “His rule of thumb was ‘if they ask, I’ll tell them I bought the building this way.’ Paying the penalty can’t be as bad as being patient with the bureaucracy.”

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