A native Metro Detroiter now living in Toronto, Isidoros Kyrlangitses, wrote an essay about the policies that allow Toronto to flourish while Metro Detroit has stagnated. He theorizes that Ontario's policy of allowing cities to only collect taxes through property taxes provides impetus for municipalities to focus on making land valuable. He contrasts this to Michigan's "home rule" policies that allow municipalities to tax according to their own preference, decisions which are usually implemented according to the immediate preferences of current interest groups versus long term vitality of the community.

One of the attractions the region had over Downriver Michigan was its growth. At the time I assumed the stereotypical Canadian reasons for growth; tighter gun control makes safe appealing cities and liberal immigration policies keep filling them with people.I later decided that these reasons disguise the fundamental differences in municipal governance between Ontario and Michigan. Ontario cities emphasize land value while Michigan cities emphasize services. The result is growing populations in Ontario cities, while cities in Michigan pursue revenue growth through services that do not necessarily translate into population growth.

From a first glance of the above table, Michigan cities appear to be strong, in control, and have the tools to create innovative city government.
So why have Ontario cities faired better in terms of population growth?
Ontario cities like Toronto only have the right to tax through property taxes, whereas Michigan cities like Detroit can charge any form of tax [[e.g. income or business tax).
This leads to Ontario cities having to boost property values to increase the tax base, while Michigan cities try to offload the tax burden from residents to businesses and services. The different approaches lead to vastly different outcomes in land use.
Cities in Ontario become much more flexible with their zoning laws since they want to increase density to increase property values. The idea is that a 40-story condominium with 300 units is worth more and generates more property tax revenue than a $5 million mansion on the same acreage.
The flexible zoning laws do not apply just to developers, but to homeowners as well. With a little work to meet fire codes, a basement apartment can be added to a residence, greatly enhancing the property value. The intensification encourages population growth, and therefore market growth for local business.
Michigan's older cities are developed to their boundaries and have a difficult time intensifying land use. City councils find it easier to create a new tax on non-residents than to convince existing voters that intensification is good, not simply a force for more congestion and traffic.
His proof that Ontario's strategy is better than Michigan's?

Fifty years ago Toronto was half the size of Detroit. Today Toronto is almost three times the size of Detroit.
Granted, that's not entire accurate: the Toronto is a little less than twice the size of Metro Detroit. But the fact remains that the Toronto area has grown by several magnitudes over the past half century while Metro Detroit's population completely stagnated during the same time, all despite Ontario and Michigan having very intertwined economies.

Full essay here: http://globalurbanist.com/2010/01/26...etroit-shrinks