Operation Compliance: Detroit's War on Small Business

"Someone breaks in, they never show up. Yet still, they want to come and blackball you and close your business," says Derek Little, owner of an auto shop along Detroit's Livernois Avenue.

He's one of many business owners in Detroit who's faced what he says amounts to harassment from the city's overzealous code enforcement. Amidst a bankruptcy and a fast-dwindling population and tax base, the city has prioritized the task of ensuring that all businesses are in compliance with its codes and permitting. To accomplish this, Mayor David Bing announced in January that he'd assembled a task force to execute Operation Compliance. 

Operation Compliance began with the stated goal of shutting down 20 businesses a week. Since its inception, Operation Compliance has resulted in the closure of 383 small businesses, with another 536 in the "process of compliance," according to figures provided to Reason TV by city officials.

But business owners say that Operation Compliance unfairly targets small, struggling businesses in poor areas of town and that the city's maze of regulations is nearly impossible to navigate, with permit fees that are excessive and damaging to businesses running on thin profit margins.

"It is hard to run a business in Detroit. It's taken me three years to get approval for an outside patio," says Larry Mongo, who runs Cafe D'Mongo's Speakeasy a successful bar and restaurant in downtown Detroit.

While Cafe D'Mongo's is now well-established and successful, Mongo says that the inscrutable regulations, frustrating bureaucracy, and rampant corruption among city officials discourages many would-be entrepreneurs from ever pursuing their business ideas in the city.

"What about the person starting out? The reputation that they give their relatives, their cousins, their friends... They say, 'Hey, don't [start a business]. They rob you,'" says Mongo.

Operation Compliance is but one manifestation of a larger problem in Detroit says Michael LaFaive, Director of the Mackinac Center in Michigan. That problem is a local government more focused on collecting revenue and maintaining municipal worker jobs than it is on creating a business-friendly environment.

"Accidentally, the city has created sort of an anarchistic culture in the city, where many entrepreneurs, where many of the smaller retailers and entrepreneurs simply forgo getting the required permits," says LaFaive. "So entrepreneurs have said, 'Look, let them catch me if they can.' Right now, the city has decided, 'We're going to try to catch you, and we're going to put together a special unit to do so.'"

Officials from the city of Detroit did not respond to requests to be interviewed for this story.

For more on this topic, check out Shikha Dalmia's column on Detroit's non-recovery, which features more reporting on Operation Compliance.

Approximately 5 minutes. Produced by Zach Weissmueller. Shot by Tracy Oppenheimer and Weissmueller.

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  • ||

    Bailout!

  • XM||

    In LA, "Operation Compliance" would be called "immigration raid", since many, MANY businesses operating in the shadows are ran by immigrants.

    Does "Operation Compliance" shut down businesses that pay their workers in cash? Well, then most small businesses are in trouble.

  • ||

    Operation Compliance began with the stated goal of shutting down 20 businesses a week.

    That will certainly help with the unemployment problem. It's better to have no job at all than to be forced to work in a place with a missing "this door to remain unlocked during business hours" sticker.

  • ||

    Why do you want workers to die in structure fires, MS?

  • ||

    I'm sure it's because I'm racist. Also greedy.

  • ||

    Don't forget because you hate the childrenz, with their tiny nimble hands, perfect for fixing the cogs deep in your machines.

  • ||

    What are you, some kind of humanitarian? I have intentionally left my monocle factory entirely non-automated that I may work their tiny, nimble fingers to the bone instead.

  • ||

    I've always just used the orphans as a machinery lubricant. Then the cogs never need to be fixed.

  • Zombie Jimbo||

    There is stuck on stupid and then there is pedal to the metal, hemi powered stupid.

    Go Motor City!

  • sarcasmic||

    Nothing stimulates the economy better than preventing economic activity.

  • The Late P Brooks||

    Operation Compliance began with the stated goal of shutting down 20 businesses a week.

    This will undoubtedly usher in a new era of prosperity and and happiness for the people of Detroit.

  • kinnath||

    Stupid is as stupid does.

  • kinnath||

    Stupid is as stupid does.

  • Scruffy Nerfherder||

    Repeatedly

  • OneOut||

    You can say that again.

  • The Late P Brooks||

    Working in a place with improperly located toilet paper holders in the restrooms is just like slavery.

  • Hillary's Clitdong||

    Replacing a floor without paying for a permit is just like Dachau.

  • seguin||

    Remember, all job losses are due to LAZYFAIR and SEKWESTERZ!

  • Invisible Finger||

    Elect the government that goes BING! and you'll get an economy that goes POOF!

  • ||

    Wonderful what we can do nowadays!

  • Libertymike||

    Nonsense!

    The piston which constitutes Detroit's captaincy is jumping through hoops.

  • BakedPenguin||

    The search engine is embarrassed to share its name with that idiot.

  • Libertymike||

    How many times has the search engine been an all-star?

  • Tim||

    Detroit ain't coming back.

  • Hillary's Clitdong||

    IT NEEDZ MOAR REGULATIONZ!

  • OneOut||

    "Operation Compliance began with the stated goal of shutting down 20 businesses a week."

    20 a week? That's all ? lazy municipal employees. If they would privatize that they could get at least 40 business a week shut down.

  • Rasilio||

    No, but OCP can build New Detroit on it's burned out husk.

  • XM||

    More bad news - The new Robocop (the steely guardian of Detroit) looks like a dainty Iron man.

  • Root Boy||

    So you say...Bing can just hire all those poor laid off folks from the closed businesses as new code enforcers and then watch the roaring comeback.

  • John||

    You really can't make this shit up. If there was a scene like this an a Rand novel (and there might be I don't know) your typical smug lefty would hold it up as an example of how Rand just wrote cartoons and not characters that could in any way really exist.

    I am sorry but this is strong evidence that liberalism is a form of insanity. Dave Bing is not a monster. I have no doubt that he really doesn't want to see people unemployed and understands how desparate things are in Detroit. Anyone who wasn't a monster and did understand the unemployment situation in Detroit who would do this is insane. How do you reason with someone like that? We don't need a political dialog in this country. We need liberals to get some kind of therapy or professional help.

  • Scruffy Nerfherder||

    I have no doubt that he really doesn't want to see people unemployed

    Especially the inspectors.

    When it comes down to a decision between private sector and public sector, you know which way he's going to go.

    In order for the private sector to flourish, the public sector will have to be gutted in this country. This is the logical conclusion of where we are all headed.

  • John||

    No. It is not that. It is that Bing actually thinks doing this won't put people out of work. It is insanity. I honestly wish it was just old fashioned corruption. That can be fixed. But this kind of insanity can't be fixed.

  • Scruffy Nerfherder||

    Bing actually thinks doing this won't put people out of work

    Thus the stated goal of shutting down 20 businesses a week.

    This is private sector vs public sector, straight up. The public sector is winning, and carrying the ball all the way to hell.

  • John||

    No. Bing thinks that shutting these businesses down will open the way for businesses who follow the rules. You are reading too much into it.

  • Scruffy Nerfherder||

    You are reading too much into it.

    I think you are. Bing can't be quite that stupid. This is a bureaucracy fighting for its life, its justification.

  • Invisible Finger||

    I'd bet it was the inspectors that BEGGED to be able to do this because some of them were going to be laid off. And Bing being a shit-for-brains gave them numbers to meet to save their jobs.

  • Bill Dalasio||

    "Bing can't be quite that stupid."

    That isn't an established proposition.

  • OneOut||

    I agree. If the business' they are shutting down were profitable enough to pay the fees they probably would.

  • JW||

    John, I don't really give a shit what Bing's intentions are.

    Act like a monster, even an indifferent one, get labeled as such.

  • JWatts||

    Yes, but John does have a point. You need to correctly figure out what type of monster you are trying to kill. Is it a delusional Liberal or a corrupt civil servant?

  • Bill Dalasio||

    In practice, you're right. But, I think John is right, as well. That's why he's calling it insanity. And it is. No, you can't shut down businesses and not put people out of work. That's just not a rational proposition. But, insane people don't think rationally.

  • Invisible Finger||

    You know who else wasn't a monster?

  • John||

    Road to hell and all of that. The more noble the ideal, the more monstrous the methods people are willing to use to try and achieve it.

  • Libertymike||

    Contrary to Solzhinitsyn's prescription:

    The higher the ends, the higher must be the means.

  • Mizchief||

    In these cases I really try to understand the insane mind and look for any kernel of reason. Best I can come up with is that he is concerned that the deteriorating market is forcing the business to cut corners and he wants to protect the workers who are still there so they don't give up and stop working.

    However, I can't fathom how a stated goal of closing 20 businesses a week could help anyone. I could see working with the businesses to find rational ways to solve the above stated goal. It would still be stupid, but at least not crazy.

    Only other reason would be that he is trying to put the final nail in the coffin so Detroit can become a landfill or nuclear storage facility.

  • OneOut||

    "working with the businesses to find rational ways to solve the above stated goal."

    You must never had to deal with municipal planning and zoning or code enforcement before.

    The only way is their way or the highway if you are a small business. On the other hand the City of Houston recently gave a tax abatement to a big box retailer that wasn't even going to locate within the city limits.

  • From the Tundra||

    My favorite part:

    "Accidentally, the city has created sort of an anarchistic culture in the city, where many entrepreneurs, where many of the smaller retailers and entrepreneurs simply forgo getting the required permits,"

    "Accidently", huh?

  • John||

    You see they accidentally forgot to make sure their system is in anyway usable.

    That is really straight out of the third world. Create a permitting system so complex and arbitrary that most people don't bother with it and thus are criminals and subject to shakedowns by corrupt officials.

  • Tim||

    Gentlemen our culture of laziness corruption and official neglect has lead to free market growth. WE CAN'T HAVE THAT.

  • mr simple||

    Clearly this is the work of an evul corporashun! They're just trying to push out the working man so they can liquidate the assets for profit like in that movie.

    Seriously, what else can they be doing but trying to get the city closed?

  • Tim||

    There's sequel to INDEPENDENCE DAY coming out in 2015:
    The Earth has rebuilt in the 16 years since the first attack, except for Detroit which is still in ruins. And the aliens never even attacked it.

  • Hyperion||

    And the aliens never even attacked it.

    Who needs aliens when you have progressives?

  • ||

    Ttonight I say, we must move forward, not backward; upward, not forward; and always twirling, twirling, twirling towards freedom!

  • Lord Humungus||

    OT: This is a bit odd. Last year we moved into a new neighborhood - a small suburb of Grand Rapids with 10K residents. A few weeks ago my wife got pulled over and got a ticket.

    Today we get a letter from the "Public Safety" division asking for our feedback on the officer in question.

  • Tim||

    It's a trick, one false move and you're in the "disgruntled" database.

  • Tim||

    In fact, thanks to plate readers, they know when you drive on what days and your favorite routes.
    So tell them that you regret violating the law and yada yada.

  • SugarFree||

    "My wife complained that his testicles, while clean, did not taste as meaty and determined as she believes a police officer's should. Please notify your force that my wife will not being getting out of anymore tickets until this situation is rectified."

  • Lord Humungus||

    too close to perceived reality.

  • The Late P Brooks||

    Detroit ain't coming back.

    it never left.

    It just lies there, decomposing, in a malodorous fog.

  • John||

    The liberals now have a vested interest in it never coming back. The only way it would ever come back is if it ever stopped having a liberal government. As embarrassing as the condition of Detroit is to liberals, it turning around would be a thousand times worse. Now, they can at least blame the evil corporations and the world market is at fault. If Detroit ever came back they would have to explain why. And they don't want that. At this point, expect liberals to do everything they possibly can to ensure Detroit stays dead lest any new and crazy ideas ever get tried there and actually work.

  • Invisible Finger||

    If it came back it would because socialism works.

    The reasons for success or failure are determined before the fact, evidence be damned.

  • Pro Libertate||

    Why not implement a five-year new economic plan that would temporarily use the free market to boost the Detroit economy? After the boost happens, total state control and socialism can be restored.

  • Scruffy Nerfherder||

    Sounds familiar for some reason.

    I know! Detroit needs a Great Leap to come out of stagnation. That's a great name!

  • Pro Libertate||

    Perhaps each resident could smelt steel in his backyard?

  • sarcasmic||

    Are they zoned for that?

  • Pro Libertate||

    No, but the local soviet could suspend enforcement of that rule except when it needs to punish the unmutual.

  • BakedPenguin||

    Said unmutuality determined by self-criticism sessions, right, comrade?

  • Pro Libertate||

    Yes, comrade. I see that you are well-versed in party discipline.

  • ||

    Detroit needs a Great Leap to come out of stagnation. That's a great name!

    A great leap you say? But in what direction? FORWARD of course!

  • JWatts||

    Maybe they can Lean Forward and make a Great Leap.

  • mplspolitics||

    They do, they just need you to think that it's libertarianism that destroyed it, not liberal ideology.

    http://hotair.com/archives/201.....rian-city/

  • God-Emperor||

    Oh look there are people still trying to make an honest living in Detroit. Git 'em.

    formerly Dr. Frankenstien

  • Bill Dalasio||

    "Operation Compliance began with the stated goal of shutting down 20 businesses a week."

    You have a bankrupt city with a fast dwindling tax base. I know, let's shut down businesses?

    "Since its inception, Operation Compliance has resulted in the closure of 383 small businesses, with another 536 in the "process of compliance," according to figures provided to Reason TV by city officials."
    And only in a city that decides shutting down business is a legitimate goal can this be seen as a "success".

  • tarran||

    Holy shit!

    At the 5:00 mark, am I understanding the Cafe owner correctly? I think he is hinting that he bribed the officials in exchange for them leaving him alone!

  • John||

    That is the idea Tarran. That is how these schemes work. I bet the inspectors hate Bing more than the businesses do. He just shut down their racket. Bing is so crazy and out of touch, he is actually committed to good government and thinks this is a good idea.

  • JWatts||

    No, I think your wrong. More than likely everyone of the shutdown businesses didn't grease the right palms.

  • Invisible Finger||

    Bribes and compliance are the exact same thing.

  • SusanM||

    'Hey, don't [start a business]. They rob you,'" says Mongo.

    Mongo only pawn in game of life

  • Kelldog||

    SusanM -
    This gave me a good chuckle. Thanks. :)

  • PH2050||

    He needs his meds.

    P.S. You are awesome.

  • Scruffy Nerfherder||

    Robocop was a documentary from the future.

  • Dan||

    Except the backstory in robocop has greedy capitalism causing all the cities problems.

    It certainly had the setting right, just not the reasons for how it got that way.

    If you really want to see an example of somebody that wrote a documentary from the future, check out the book Futility by Morgan Robertson. He spells out just about every last detail of the sinking of the Titanic in a book he published in 1898.

  • The Late P Brooks||

    I think this is a plot by those nefarious robber barons in Bentonville to clear away all the Mom and Pop competition prior to blanketing Detroit with Walmarts. Bing is in the pocket of BIG BOX.

  • Invisible Finger||

    When is Canada going to put up a big fence like we do by the Mexican border?

  • Bill Dalasio||

    Assuming you're talking about Detroit, I'll only be okay with that if we can do it too.

  • Dan||

    I hate how this issue is always framed purely in the context of Detroit. Like it's something that's only happening there.

    The entire country is living under these same ridiculous regulatory mafias. The only difference in Detroit is that the city is crumbling so fast and people are so desperate that they are willing to openly violate those regulations and dare the regulators to come after them.

    These policies are no more ridiculous in Detroit than they are in any other city in the country. Stop covering this like it's a Detroit issue and start covering it like it's a national issue.

  • RBS||

    Here's an idea: Start your own blog and cover whatever issues you want.

  • sarcasmic||

    The difference here being that Detroit has explicitly stated that their goal is to shut down businesses. That's why they framed it in the context of Detroit.

    hth

  • Libertymike||

    Dan has a point.

  • datcv||

    And also as a city in bankruptcy, you'd think they might have other priorities.

  • sarcasmic||

    A city in bankruptcy has priorities other than collecting every last fee and fine that it can find?

  • Bill Dalasio||

    Well, why is it in bankruptcy? Don't you think it might have something to do with not having enough of a tax base to support the government? And note, the stated goal here wasn't to issue fines and monetary damages. It was to shut down the businesses. How much fee and fine income do you think you're going to get from a shut down business?

  • sarcasmic||

    If they were intelligent they wouldn't be in government.

  • Bill Dalasio||

    I'm not expecting intelligence. But, at least a little animal cunning would be a step forward.

  • Agammamon||

    Here's an idea: Read the rest of this blog where they go on and on and on about the shitty regulatory environment of this country, from the federal government on down to your local city council.

  • Anonymous Coward||

    "There are revenues involved. If you don't go through the proper process we end up missing a lot of money. We're trying to recoup that as best we can," says Supervising Building Inspector Glenn Davis.

    The peasants aren't paying rents to their lords! The insolence! Send them to the gaol!

  • Invisible Finger||

    Bing, like all Democrats, only knows one method: UP THE DOSAGE.

  • Loki||

    Professor Hathaway: That's a wonderful story, Bodie. I noticed you've stopped stuttering.

    Bodie: I've been giving myself shock treatments.

    Professor Hathaway: Up the voltage.

  • Hyperion||

    Maybe build a big wall around Detroit, and it can be the first of the 'camps' where they put all those pesky libertarians who refuse to conform for the good of the collective, and who are constantly criticizing their elected leaders and betters.

    Maybe Bing is in on that and he's clearing the city according to plan.

    It all makes sense now, the plot of my first dystopian novel is almost hatched...

  • ||

    Maybe build a big wall around Detroit, and it can be the first of the 'camps' where they put all those pesky libertarians...

    Sounds great to me as long as it keeps everybody else out as well as us in. Place will look like Singapore meets Vegas meets Amsterdam meets Burning Man in a year.

  • Bill Dalasio||

    Yeah, I was going to make the same suggestion. Inside of five years the dystopia would be on the outside and the libertarian town would be charging an entry fee (in lieu of taxes on residents) to keep out the riff-raff.

  • Paul.||

    says Derek Little

    No one stands up for the Little Guy!

  • Paul.||

    Amidst a bankruptcy and a fast-dwindling population and tax base, the city has prioritized the task of ensuring that all businesses are in compliance with its codes and permitting.

    Fare Sharez!

    Oh, and this is why there's no seminal event that makes people have that facepalm moment and go "Oh, now we get it, let's vote libertarian!"

    Never happens. Not even when the Jews are in the ovens do people go, "Maybe we went too far!"

    Yeah, I went there.

  • ||

    The beatings will continue until morale improves.

  • UnCivilServant||

    That sign hangs in my cubicle. It's bright orange. No one has noticed.

  • Loki||

    Uh-huh, yeah, code enforecement... that'll stop those assholes from trying to make a living and get on the dole where they belong.

  • Paul.||

    Oh, you thought that Government's job was to keep people off the dole... how quaint.

  • Brian D||

    Some of these businesses that were operating could have posed some serious harm.

    http://www.blacdetroit.com/BLA.....Smackdown/

    A resale shop on West McNichols Road that was filled floor-to-ceiling with appliances, TVs and furnace parts. The situation posed a fire hazard, and they also were selling on the sidewalk, which is against the law. The building was not zoned for resale and did not have the required business license.

    Property on Lyndon Street operating as a tire-recycling center that had 60,000 tires stored on site. After closure, the owner left the stockpile of tires, posing an environmental hazard.
    The Michigan Department of Environmental Quality and DPW are searching for grant funds to clean the site.

    Owners of a tire store on East Seven Mile Road that used an open fire in a barrel as a rigged-up heater, which posed fire and safety hazards.
    Inspectors also found a rifle and a .357 pistol. Children ages 11 and 17 were running the business.

    I still think that overall the program does more harm than good, but that's not to say it does no good at all.

  • Brian D||

    Ugh, those embedded quotes should be boldface instead.

  • setTHEline||

    Solution: vote with your feet. Don't go to the businesses that you deem dangerous. Problem solved.

  • Brian D||

    From the POV of the consumer, I agree. However, let's say I own a business and things are going well. Someone opens a business next door in a shared building using open fires in barrels as heaters. I can 'vote with my feet' and move my business, but doing so might cost me so much that continuing to stay in business becomes difficult, if not impossible. Or I can stay and hope my business doesn't burn to the ground as a result of someone else.

  • Hillary's Clitdong||

    However, let's say I own a business and things are going well.

    Now let's say we're in Detroit instead.

  • Brian D||

    That restaurant owner in the video seemed to have a nice place. Doesn't really address the hypothetical I posed though.

  • Brian D||

    So the answer to my hypothetical situation is...

    https://www.youtube.com/watch?v=CXiifFBHj5g

  • RussianPrimeMinister||

    DO. NOT. BUILD. YOUR. BUSINESS. NEXT. TO. A. FIRE. HAZARD.

    Was that so difficult?

    And if you absolutely HAVE to build your business there, put in a few good fire retardant layers of insulation between the two of you. One nice, shiny, fireproof wall can't hurt, can it?

    Hell, you could even put up a sign that points to your irresponsible neighbor and says "Don't Shop Here, Will Burn To Death."

  • setTHEline||

    Shared building, so same landlord right? Seems like the lease would have something about using fire barrels as heaters. My point is this: government and regulation aren't the best way to handle stuff like this. Free markets and private contract - much better.

  • Bill Dalasio||

    From your own citation:

    Property on Lyndon Street operating as a tire-recycling center that had 60,000 tires stored on site. After closure, the owner left the stockpile of tires, posing an environmental hazard.

    So, it sounds like it was the actual closure that created the menace.

    Owners of a tire store on East Seven Mile Road that used an open fire in a barrel as a rigged-up heater...

    People have been doing that since time immemorial. Ever been to the Italian Market in Philadelphia (or even seen it in Rocky)? Pretty much every stall does this.

  • Hillary's Clitdong||

    Children ages 11 and 17 were running the business.

    How DARE you try to run a business when most kids your age are jerking off? Get on the welfare rolls RIGHT THIS INSTANT.

  • setTHEline||

    Agreed, better to learn how to write grants than how to run a business, at least in Detroit.

  • Root Boy||

    They really solved that tire farm problem by putting the guy out of business so he had to abandon it. May be his responsibility, but the city now has to do the cleanup. Smart Power.

  • setTHEline||

    Wait, there are still businesses in Detroit?

  • Paul.||

    Yeah, department of transportation, housing department, department of licensing, code enforcement, police department, sanitation department... did I miss anything?

  • ||

    Department of Public Works, Fire Department, city parks service, animal control...

  • Paul.||

    Mayor's office, city council... all running like a top. Detroit, modern municipal success story. Their recovery is stronger than California's!

  • AlgerHiss||

    Never leave out the ignorant piece of human debris that ruled Detroit with a punk/thug hand; Coleman "sphincter" Young.

  • GLK||

    Isn't that what the Government always does? Control the population via over-regulation. They do it at every level and it's slowly but surely creeping into our private lives too. There are RFID chips in my 92 year-old mother's city mandated trash cans to monitor her recycling. Non-compliance results in fines. When are people going to start screaming NO FUCKING MORE!

  • Alex the wolf||

    We all know who is to blame for this:
    BUSSHHHHHh

  • Ron||

    Note how they believe the rules are creating anarchy, which is true, and once you are no longer in compliance of the laws why would you bother to pay your employes a minimum wage so you hire illegals.
    The fewer people legally employed the fewer taxes collected. More unintended concequenses of over regulation.

  • PH2050||

    You fools don't even see it. The guys enforcing this are the

    Operation
    Compliance
    Protectorate

    RoboCop was prophetic.

  • mplspolitics||

    One of the most infuriating things about this whole debacle is the left is trying to call the failure of their policies in Detroit libertarianism.

    http://hotair.com/archives/201.....rian-city/

  • Matt J.||

    Liberalism to an extreme... Why can't Detroit be like other Democrat cities or the Rainbow-Push coalition, and just extort the shit out of companies?

  • juliajuli1||

    my classmate's half-sister makes $72 every hour on the internet. She has been without a job for eight months but last month her payment was $16159 just working on the internet for a few hours.Here's the site to read more......

    -------------------
    http://www.Rush60.com

  • ||

    Makes me wonder what the legality would be if a neighborhood got together and seceded from Detroit?

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