A couple months ago I had a great idea for a business in Detroit - a specialized reclamation company that would provide a low cost method for cleaning up run down buildings.

With a rough draft of business plan in hand, I started researching all the licensing and ordinances I would need to comply with in the Detroit area.
Almost instantly I ran into a brick wall. From what I was reading on the Detroit Licensing Site, it's almost imposable to get a new business license.
Confused and a bit aggravated, I made several phone calls to city hall, asking many questions. After a few hours of run around, I gave up, not getting any answers from them.
From there, I called up a few Detroit business groups with questions, and I fond the answers I was looking for.
Detroit construction and manufacturing licensing / ordinance laws are written specifically to protect existing businesses from new competition !
I couldn't believe it! I drew up another business plan, this time for something in the auto industry category - a press metal shop - and started doing my researcher again on what was required.
Again I hit a brick wall of bureaucratic "red tape".
I still didn't quite believe how anti "new" industrial the Detroit laws were, so I tried one more time, this time as company that manufactures tricycles.

This time when I did my legal researcher, I took my time, and made sure I fully understood everything involved.
Wouldn't you know it, yet another wall.


If Detroit wants to stop being the cesspit of the Untied States, with stupidly high unemployment, stupidly high crime, and a major financial problem, them need to drop ALL of their protectionist laws, and make the city once again friendly for new manufacturing and construction business.

Note: This article was reposted from my blog.

Detroit construction and manufacturing licensing / ordinance laws are written specifically to protect existing businesses from new competition !

That's how most licensing laws work for commercial ventures. It's ridiculous. There are some narrow areas where there's a benefit to licensing restrictions, but they are badly outnumbered by cases where they do nothing but protect incumbents. Construction and manufacturing are both particularly bad in this area. I had a look at the site you linked to, and getting a business license in general doesn't seem so difficult, though I doubt it's as easy as they make it sound. What sorts of walls were you hitting?

All that said, Detroit's cesspit status has vastly more factors behind it than restrictive licensing for new construction manufacturing businesses.

What sorts of walls were you hitting?

Construction, for example, you and the management you hire to do the jobs have to submit a complete 5 year work history - if any work you have performed with in the last 5 years is not directly related to the type of construction license your applying for, your ineligible. You also have to explain "employment holes", provide complete references for each "job".

If your already in business for yourself, you have to provide contact information for ALL of your clients for the past 5 years, provide all of your business receipts, AND provide complete histories / references for all of your management.

If "holes" between projects are too long, your ineligible. If "holes" in your management staff are too long, your ineligible.

On top of that, Detroit requires you take a specific college course ( $18,000 ) as part of the licensing process for construction ( has nothing to do with building codes ) .

What sorts of walls were you hitting?

Construction, for example, you and the management you hire to do the jobs have to submit a complete 5 year work history - if any work you have performed with in the last 5 years is not directly related to the type of construction license your applying for, your ineligible. You also have to explain "employment holes", provide complete references for each "job".

If your already in business for yourself, you have to provide contact information for ALL of your clients for the past 5 years, provide all of your business receipts, AND provide complete histories / references for all of your management.

If "holes" between projects are too long, your ineligible. If "holes" in your management staff are too long, your ineligible.

On top of that, Detroit requires you take a specific college course ( $18,000 ) as part of the licensing process for construction ( has nothing to do with building codes ) .

that doesn't sound like protecting other businesses, it more sounds like ensuring that the people doing the job are qualified to do so.

my dad is a self-employed plumber in upstate new york. he has been for the past 30 years, and before that for ~3-5 years he worked in supply houses for construction companys. he does not work within city limits(not new york city) because he doesn't want to take the course to get a license. however, to even apply for that license, you have to have at least 10 years worth of working experiance doing the job. this is done by working under other contractors for those years, and getting references from them. this is not because the people in charge want to protect existing businesses, it's because they don't want people that have no idea what they are doing creating unlivable conditions. Things have to be done by the codes the city/state/government creates, which means years of experience dealing with those codes, by working under people who have years of experience doing what it is you want to do.

The idea that you have to work under someone for 10 years to learn building codes is ridiculous. That is clearly in place to protect established contractors as it would drastically reduce competition. This should be evident by your dad's reluctance to do work inside the city despite the fact that he should be more than capable of the same work the licensed contractors are able to do. I'm not saying they shouldn't require licenses, I'm saying the requirements shouldn't be so onerous as to drastically reduce competition. Heavy regulation actually support monopolies who can afford to jump through all the hoops. They essentially are paying a tax to reduce competition.

first of all, it's not just about building codes, it's also about instincts in what works, what won't, little nuances, etc. stuff that you gain through years of experience. the reason my father doesn't want to take the course, is because their are yearly fee's associated with the license, and he gets plenty of work in the rural area's/town's(note that he mainly does new construction, not cleaning out pipes and stuff), that it's not really a problem for him to bother getting the appropriate licenses. I do agree that 10 years of experience is a bit high, and i'm sure if you knew the inspectors that give out the licenses the requirements could potentially be lowered. but none the less, It doesn't mean that anyone that realistically want's to get into the industry can't. it just means that you need to be very serious about doing it.

I see both sides. You don't want poor quality and cheap services/products mucking up the market. On the other hand, Detroit is only digging their grave deeper by having set up so much shit to wade through to start out on something that could potentially employ people and make use of the land covered by empty crackhouses.

In my area, you go in and take a 300 question test for a plumbing level 1 test. You can than go back in and take a much harder plumbing level 2 test.

If you pass the level 1 test, your allowed to work plumbing under some one who is a level 2. If you pass level 2 ( and have an OSHA certification ) you can run work, and open your own plumbing business.

It doesn't require 10 years experience - it requires an extensive knowledge of OSHA safety regulations, and plumbing codes.

For the hay of it, I looked up construction and demolition companies in the Detroit area. Relatively few exist, and all of them I phoned charge over 6 times the amount of money to build a 1,000sf house, as it does in my area.

Most Detroit buildings are left to fall down, due to the huge amount of cost to rip them down. I was quoted $95,000 - $350,000 to get rid of a 1,000sf house, which cost $4,000 - $10,000 here .