Ten months after emerging from a record $18-billion municipal bankruptcy, Detroit is functioning in ways unseen for months and even years — street lights are on, parks get mowed, municipal debt is sold on the public market and the police are training civilians to manage traffic at clogged intersections.
“It’s a madhouse,” said Joshua Elling, a community development executive whose usual 20-minute commute can sometimes take an hour.
This is the contrast of the remade Detroit. A vibrant downtown attracts young people, and a new streetcar line and arena complex rejuvenate a city accustomed to resignation. Yet the vast expanse of residential streets, where four of 10 live in poverty, map the long-term challenge. Surrounding neighbourhoods represent 95 per cent of Detroit’s land mass, roughly the size of Boston and Baltimore combined, and await revival amid 70,000 vacant buildings.
“Everybody likes a good comeback story, a good underdog story, and that’s what Detroit is,” said Luther Keith, executive director of Arise Detroit, a coalition of neighbourhood groups headquartered on the sprawling east side. “Where it goes, I don’t know.”
The Census Bureau deems the city the nation’s poorest. After losing more than half of its population and 90 per cent of its manufacturing jobs since 1950, Detroit became the nation’s first major city to file for bankruptcy protection, in July 2013. There is no template for a recovery of this magnitude. Despite indicators of increased housing sales, the city continues to lose population, dropping to 680,000 last year. The child poverty rate is 59 per cent. For most of the city’s 139 square miles (360 square kilometres) little has changed.
Downtown Detroit, however, thrives. Quicken Loans Inc and Blue Cross Blue Shield of Michigan are responsible for more than 15,000 jobs there. In downtown and midtown, 77 restaurants have opened since 2013, a 26 per cent increase, according to 7.2 SQ MI, a data project that tracks economic changes in the city. Over the same period, the number of retail establishments grew 13 percent, to 352.
Reminders of reality are never far away. A billboard promoting a homicide tip service features the picture of a man next to the inscription, “You know who killed me”.
“People understand it took us 50 years to get to this point — you can’t turn it around on a dime,” said Jed Howbert, who directs the jobs and economic development team for Mayor Mike Duggan. “There’s no hiding the fact that there are areas of the city that are so vacant that you’re rebuilding a neighbourhood from whole cloth.”
Duggan’s office has created programs to stimulate economic growth, including zero-interest home improvement loans and workforce training. The city has demolished about 6,800 homes since May 2014 and is averaging about 100 tear-downs per week. The Detroit Public Lighting Authority said it plans to re-light all neighbourhoods by year-end.
In its first return to the bond market since emerging from bankruptcy, the city sold $245 million in debt in August to repay loans and support projects, including fire department upgrades.
Almost 100 new police cars were given to the city by corporate donors led by Roger Penske, the auto-racing magnate and chief executive officer of Penske Corp, a transportation services company in the suburb of Bloomfield Hills. Adding to anecdotal evidence that life in the city is improving, Detroit was surpassed by St Louis as the nation’s murder capital last year.
The top priority, Howbert said, was population growth. The white population in this 80 per cent black city grew by almost 8,000 people last year, the biggest increase since 1950, according to a Detroit News analysis of Census data. While that influx helped slow the population decline, it underscored the reality that growth and opportunity are downtown, where many jobs require college education and professional credentials that poor Detroiters lack.
For many longtime residents, downtown’s success is a mirage and post-bankruptcy is a test of patience.
“We’re waiting for it to trickle down to us,” said Vanessa Standifer, 61, a retired pharmacy technician who lives in northeast Detroit. “Mayors try to make a showplace of their downtowns so people will come and spend money, but they’ve got to realise there are everyday people in the neighbourhoods."
Dennis Derby, an analyst and portfolio manager at Wells Fargo Asset Management, said investors wanted to see population growth and signs of sustainable recovery.
“It’s downtown and midtown that look like they’re showing revival, but we don’t know yet if that will result in positive growth across the city,” Derby said.
Others are doubtful that the downtown recovery can spread across such an expanse. “The vast part of the city is still in the doldrums, and I don’t see much chance of it coming out,” said Peter Eisinger, a retired professor of public policy and urban affairs who has written extensively about Detroit.
© Bloomberg