Media reports that Detroit has become the largest city in America to file for bankruptcy read like obituaries. Despite a 60-year decline and a shredded tax base, this once world-class city isn’t dead. But Detroit’s rebirth will require not only a fix for an immediate fiscal crisis, but also a long-term strategy for economic growth and population stability.
Negotiations between Detroit’s state-appointed emergency manager, Kevyn Orr, and creditors, unions, and pension boards have failed. Bankruptcy has become the city’s last option for shedding nearly $20 billion in debt.
Long-suffering Detroiters face an uncertain future that will almost surely include municipal layoffs, sales of city assets, higher fees, and the scaling back of already woefully inadequate services.
The specter of bankruptcy has dealt a psychic blow to the city. But Detroit’s leaders and residents cannot merely stand by and watch the process unfold. Drawing on their creativity and legendary love for their city, they must act now to improve — or at least maintain — city services and lay the groundwork for stabilization and growth.
Fiscal stability, while necessary, isn’t sufficient for Detroit’s long-term survival. The city needs to stop hemorrhaging population, especially working- and middle-class residents who bolster the tax base. Now more than ever before, Detroiters need a reason to stay and believe.
“Eliminating the debt and balancing the budget will create fiscal stability, but it won’t create growth,’’ John Mogk, a Wayne State University law professor and urban affairs expert, told The Blade’s editorial page. “The future of the city depends on its ability to stabilize the population and grow economically.”
Once the nation’s fourth most populous city, Detroit had nearly 2 million residents in the 1950s. Today, its population stands officially at about 700,000, but the real figure is probably closer to 650,000.
Between 2000 and 2010, the city lost 25 percent of its people. Among other things, they left for better schools, safer streets, more-convenient shopping, and lower insurance rates and taxes.
As many as 20,000 people a year continue to leave Motown. Those who remain are predominantly poor. One third of Detroit’s 139 square miles lie vacant.
Detroit’s transit system is among the nation’s worst. Nearly 40 percent of the city’s streetlights don’t work. Police response times are abysmal, and violent crime rates are among the nation’s highest. Detroit’s leaders cannot allow services to deteriorate further over the next two years if they want a sustainable future.
In the short term, bankruptcy could help shore up municipal services by enabling the city to spend the 35 to 40 percent of the current budget now devoured by debt to turn on streetlights, hire police officers and bus drivers, pick up trash, and demolish some of Detroit’s 78,000 abandoned buildings.
Detroit’s leaders also must prepare for economic growth by assembling, clearing, and cleaning up vacant properties, making large tracts available and shovel-ready for industrial and other commercial uses, or even urban farming and recreation. City leaders should work closely with Detroit’s active neighborhood organizations, and its art community, providing whatever technical, financial, and planning help they can.
They must also strengthen the city’s ties to the suburbs to prepare for regional economic development efforts, including mass transit. The Southeast Michigan Council of Governments, the region’s metropolitan planning organization, should develop an economic development plan that highlights Detroit’s role in the regional economy.
A federal bailout of Detroit is not in the cards. But the State of Michigan and the federal government should stand ready to assist Detroit, just as they assisted the U.S. auto industry.
Detroit’s problem are on the scale of a natural disaster like Hurricane Katrina. Even as the city restructures and cuts spending, it must find a way to spend more on public safety and other services needed to retain residents. The state and federal governments should provide limited and targeted aid to help Detroit grow as it emerges from bankruptcy.
More broadly, Detroit’s woes are a clarion call for a comprehensive urban agenda, a set of city-friendly policies that has been missing from the federal government for more than 40 years.
Other cities, including Toledo, are not immune to Detroit’s problems. Mismanagement, incompetence, and corruption aggravated Detroit’s decline. So did inflexible unions and myopic leaders who failed to grasp that a shrinking and poorer city could no longer sustain an outdated and bloated city bureaucracy and work force, as well as unsustainable pension obligations.
Cities must make clear-eyed assessments of their budgets and difficult but prudent decisions about health care and pension benefits. When municipal pensions and retiree benefits cannot be sustained, everyone loses.
That said, many of Detroit’s problems were beyond its control. The exodus to the suburbs started in the 1950s, aided by a new interstate freeway system and federal policies that encouraged suburban migration.
The decades-old shift in the U.S. economy from manufacturing to service has cost Detroit tens of thousands of good-paying jobs. More recently, the foreclosure crisis threw thousands of Detroiters out of their homes, crashed property values, and shredded the tax base.
Motown’s struggles are not only a cautionary tale for Toledo, but also a threat to northwest Ohio’s economy. Today’s economies are regional; they don’t recognize municipal boundaries or state lines. Detroit remains a recreational and cultural destination for many people in this area.
Over the next decade, Detroit’s population should bottom out at 500,000 to 600,000. Sustaining a healthy mid-sized city with a signature identity will take a coordinated effort by government, foundations, nonprofits, corporations, small businesses, and civic organizations. Such an effort has already launched a new downtown light-rail line, as well as other developments in Detroit’s downtown, midtown, and east riverfront.
As Detroit moves through the painful process of fixing its fiscal crisis, its leaders must work to hold on to residents and lay the groundwork for a smaller but healthier city.
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