Saturday, March 9, 2013

What became of Detroit?

As Detroit approaches a new turn in its difficult journey over the past several decades, the imposition of an Emergency Financial Manager by the governor of Michigan (link), many people are asking a difficult question: how did we get to this point?

The features that need explanation all fall within a general theme -- the decline of a once-great American city. The city's population is now roughly 40% of its peak of almost two million residents in 1950 (link); the tax revenues for city government fall far short of what is needed to support a decent level of crucial city services; the school system is failing perhaps half of the children it serves; and poverty seems a permanent condition for a large percentage of the city. The decline is economic; it is political; it is demographic; it is fiscal; and it is of course a decline in the quality of life for the majority of the residents of the city. The poverty, unemployment, poor housing, poor health, and high crime that characterize the city must surely have an explanation.

There are several standard lines of interpretation that Michiganders offer each other -- the decline of manufacturing and the auto industry; the workings of race and white flight; the uprising of 1967; ineffective and corrupt city management; and a long and debilitating contagion of rustbelt-itis in common with Cleveland, Peoria, and Gary. Each of these has a role to play in the explanation, but it is complicated to see how these factors may have intertwined in the half-century of change that led to the Detroit of 2013.

The decline of manufacturing employment in Detroit and its inner suburbs is certainly a contributing factor to the economic decline of the city of Detroit, but these changes by themselves do not account for the major contours of Detroit's economic decline. In a careful review article on manufacturing employment in Michigan (link), Richard Block and Dale Belman show that the decline of vehicle manufacturing employment for the state of Michigan as a whole was measurable but slow between 1980 and 2001 (152). The loss of jobs has been much more significant since the beginnings of the 2007 recession; but Detroit's decline was well underway by 2007.

What about race and white flight? Certainly Detroit is a much more racially segregated city than it was in 1960, and this increase reflects the relocation of a substantial part of the white population to the affluent suburbs. So white flight is a fact. This racial demographic shift is often attributed to the aftermath of the 1967 uprising. But Tom Sugrue documents very convincingly that this process was already well underway by 1967. White flight predates the occurrence of the uprising by at least a decade (The Origins of the Urban Crisis: Race and Inequality in Postwar Detroit). This transformation of racial demography seems to reflect the vicious circle of urban change that characterizes several of the processes mentioned here. People care about the urban environment in which they live, and if they are unsatisfied and financially able, they will relocate to neighborhoods that provide better quality of life for them. But often their relocation leads to a slight worsening of the environment for others in the neighborhood, leading to a growing flow outward of the more affluent residents. Unfortunately in Detroit's history (like that of many other Midwestern cities) some of those preferences have to do with the racial composition of a neighborhood, resulting in out-migration that is disproportionately white and affluent. But this process has important consequences. Sustained shifting of patterns of residence that result in increasingly impoverished neighborhoods in the central city lead to decline quality of life and declining tax revenues for the city, and another round of relocation.

Another vicious circle in Detroit concerns schooling. The funding of the Detroit Public School system depends on the enrolled student count. Each year for at least the past ten years this count has been lower than the prior year. This means a continuing fiscal crisis for the schools, and a continuing downward spiral of funding and school population. Parents perceive lower quality as a result of reduced funding; they find alternative schools for their children; and the count declines further. But crucially, the quality of schools is a key determinant of the quality of life of a city and its attractiveness as a destination for young families. So declining school quality reinforces population loss.

Another important factor is the quality of housing and neighborhoods in the city. The city has a legacy of blight and decay that is very costly to deal with. The precipitous decline of population has left large parts of the city very sparsely populated, with a high number of abandoned buildings and vacant lots. This low density residential pattern makes it costly to deliver basic urban services like police, fire, sanitation, and infrastructure maintenance. So in addition to a declining tax base, the city has to deal with the challenge that its urban geography implies that services will cost more per capita than they do in more densely populated cities.

So what about the creation of new jobs as a way of combatting these downward spirals? Employers need a well educated workforce. Detroit's ability to educate its children and young adults is impaired; rates of basic literacy are low; and therefore it is difficult to persuade employers to establish new activities in the city. So it is predicable that job growth in the city will be slow.

Finally, what about waste, mismanagement, and fraud in city government? Is this a primary cause of Detroit's decline? Certainly there are examples of each of these problems in Detroit's history. The current trial of former mayor Kwame Kilpatrick lifts the veil from some of these practices. But the current mayor's administration has a good reputation, and it hasn't been possible for the city to make progress on its fiscal crisis during his administration either. Bringing the volume of waste, mismanagement, and fraud down to "normal" levels won't solve the city's fiscal crisis.

If I had to single out a single fact out of this complicated story as the most important factor that led to these toxic changes, I would identify the mechanisms of racial residential segregation that Detroit has embodied for almost a century. For decades Eight Mile represented a key racial division in the city, and a plethora of mechanisms of exclusion conspired to maintain this division. If the city could have settled into a racially and economically mixed pattern of residence in the 1940s, much of this story would have been different. Population exit would not have reached crisis proportions; businesses would have been less likely to relocate out of the city; and a schooling system that was very successful in the 1950s could have maintained its effectiveness. This implies that Detroit is victim to the continuing tragedy of America's inability to heal its racial divisions and antagonisms. Doug Massey and Nancy Denton got it right in their important book, American Apartheid: Segregation and the Making of the Underclass:
Segregation increases the susceptibility of neighborhoods to these spirals of decline. During periods of economic dislocation, a rising concentration of black poverty is associated with the simultaneous concentration of other negative social and economic conditions. Given the high levels of racial segregation characteristic of American urban areas, increases in black poverty such as those observed during the 1970s can only lead to a concentration of housing abandonment, crime, and social disorder, pushing poor black neighborhoods beyond the threshold of stability. (13)
So how can Detroit imagine reversing this downward spiral? It's easy to say, though not easy to implement. If Detroit could improve its ability to provide decent, effective education for its children through graduation from high school, and if it could create a process through which tens of thousands of new jobs were created for young people every year, then much of the rest of the picture would change as well. Detroit's young people need education and opportunity; with these assets, they can make their city sing again.


russell1200 said...

I think the decline of urban manufacturing is the primary cause, but I think black flight may have been more important on some levels than white flight. The easing of the restrictions on where blacks were allowed to live coincides with the same time frame where manufacturing jobs were being lost. Did this accidentally cause the inner city blacks to lose their leadership when they were under the most stress?

Magickseeker said...

Living in Michigan all my life I can tell you the twp primary components are the decline in manufacturing and Education. Undereducated blacks from the era of segregation lead to their children not getting good help at home which lead to an inability to help their children learn, add to that the poverty and lack of proper nutrition that accompanies a lack of education and you already have a problem even before you get to a lack of education funding. As well, the heavy reliance on Laissez-Faire starting in the 70s and accelerating in the 80s brought about a drastic reduction in non-skilled jobs and the pay they bring.

Anonymous said...

ADDITIONALLY, Industrial relocation to the suburbs coupled with a lack of rapid transit sealed poorer urban dwellers into a prison of crime and unemployment with no means of escape. The city of cars became the victim of its own addiction.

The Oriole Way said...

Obviously, many of these issues are not unique to Detroit. Baltimore, especially, suffers many of the same problems. As you highlight, it is extremely difficult to pinpoint either a single cause or to identify a key break in cycle so that the decline can be reversed. Baltimore, for instance, has a property tax rate that is roughly double that of any surrounding county, schools that achieve far less, and notable problems with drugs and the associated crime. Middle class families (both white and black) that can afford a car and the gasoline required to commute have understandably fled to lower tax areas that provide higher services and more safety. But city government can't provide more safety and more education under the current revenue collection regime, and under the current revenue collection regime the city cannot attract a critical mass of middle class families that will create positive spillovers for education and safety. Thus, incremental change has little impact.

Rather, wholesale changes seem to be needed. Baltimore has wide swaths of neighborhoods that have exceptionally high vacancy rates (easily approaching or perhaps exceeding 70%). My proposal would be to essentially declare these areas Special Economic Zones. The neighborhoods would be demolished and rebuilt to better reflect Baltimore's current density and ability to provide services. Instead of block after block of rowhomes, small single family homes should be built surrounding neighborhood town centers that provide essential services (small retail centers and groceries) and offer higher density rental apartments. Within these zones, purchasers that move to the area from another jurisdiction could receive substantial tax breaks to narrow the cost differential between the city and the suburbs. Schools served by the neighborhood would draw from a special state funding mechanism to provide the signal to parents that quality is on par with suburban schools. In a new neighborhood like this, safety would likely be self-reinforcing, enabling little further expenditure on police forces.

Of course, such a plan requires hurdling a host of political roadblocks and could very easily descend into a cesspool of corruption, "gentrification" anger, delay, and cost overruns. Most of all, such a plan would pit local governments against one another. The ideas may make sense at a regional level (reigning in sprawl, revitalizing the urban core, improving public safety and education), but many nearby jurisdictions would stand to lose. These problems are truly systemic, and creating a system capable of solving them is shockingly difficult.

jonathan said...

You miss a number of points and settle too easily on race. For example, Boston had similar issues with white flight and "red-lined" lending practices that led to "block-busting", but Boston is thriving. And if the reason was segregation, then you need to explain why metro Detroit is more comfortable with racial integration than so many other cities, including again Boston. Whites fled Detroit itself but blacks did too and while people thought cities like Southfield would crumble, they have remained fairly stable even as they've changed over from all white to majority black.

The question is more "why is a place like Boston more resilient than a place like Detroit?" One answer is density. Detroit was never densely populated. It is physically larger than Boston, San Francisco and Manhattan put together.

Another answer is the lack of a downtown employment core. Detroit had 3 of the largest industrial corporations in the world but none of them was headquartered in downtown - with Ford in Dearborn, Chrysler in Highland Park and GM some miles from downtown but in the city at the New Center. Because these companies did not locate downtown, their huge supplier networks did not either. This meant the downtown office core was never particularly large or dense. The downtown itself was quite large but it consisted of smallish buildings and assorted commerce. Again, that made downtown much less resilient.

Drifting back to racial segregation means you need to show why Detroit is worse than other segregated cities that have done better. I doubt that can be done.

Michael E. Smith said...

Edward Glaeser uses Detroit as his case study for declining cities in his 2011 book, The Triumph of the City. He attributes the city’s decline to a number of factors. First, the assembly lines in the automobile plants are what he calls a “knowledge-destroying idea,” “machines that reduce the need for human ingenuity.” (p.48). “When a city creates a powerful enough knowledge-destroying-idea, it sets itself up for self-destruction.” The automobile plants were highly successful for some time, but ultimately the kind of labor organization was not sustainable. Second, successive mayors of Detroit tried to fix the economy and right social wrongs, but the problems were too severe to fix at the level of the city. Mayor Coleman Young instituted an income tax. “The direct effect of Young’s income tax was to take money from the rich to fund services that helped the poor. The indirect effect of a local income tax is to encourage richer citizens and businesses to leave.” (p.59) Third, Detroit invested in buildings rather than in the education or improvement of people. In Glaeser’s view, pouring funds into things like the Renaissance Center or the People Mover monorail is not the way to revive a city—instead education and training are important. He compares this to Potemkin villages and calls it “The Edifice Complex.” Glaeser's account is more in-depth than I suggest here.

I am not an urban economist and I know little about contemporary cities. But Glaeser’s account is far more satisfying than blaming the city’s decline on segregation and discrimination (as other comments also suggest).

Anonymous said...

I find it interesting that people tend to focus on race/skin color way too much in these articles/studies. It's really behaviour, not skin color, that's a root cause here. Maybe someone should focus on that aspect of this issue.

dick c said...

This piece raises good questions. I grew up in Southfield, one of Detroit's 8 Mile Road neighbors, and I've always liked the city and though I've moved further away I still enjoy getting into town when I can.

Detroit's problems have always struck me as a sort of "perfect storm," with racial prejudices exacerbating the effect of other problems. While prejudice made it harder for blacks to climb out of poverty than whites, advances were being made. Detroit had a black business district and middle class neighborhoods in Black Bottom and Paradise Valley until the early 1960s when the I-75 freeway was constructed right through the area's middle. The riots followed soon after with white flight right on the heels of that. Of course some blacks left too, but the salient point is that much of the population with better incomes was leaving. All the while these things are happening the auto industry and it's jobs are continually being lured away.

The city, as has been pointed out, is spread out over a huge area. Supporting the infrastructure requires more than the current population can afford, so *everything* suffers. It would have been interesting to see if it might have been better for mayor Young to have spent more on people instead of buildings, but I suspect that wouldn't have been feasible. Raising money for structures that have a possibility of eventually paying for themselves is simply easier, and those projects weren't easily accomplished as it was.

Due to the auto industry, Detroit was the fastest growing metro area in the country in the mid 1920s, attracting a huge number of workers from the rural south. It seems to me that this extremely rapid growth in population and the resulting development of Detroit's racial make-up set the stage for the current problems in ways that didn't happen in other cities. The explosive growth resulted in the extremely spread out layout of the city, and a sudden higher than average concentration of poor uneducated workers--white and black--which wasn't a big problem as long as there was work. That poor white segment was able to assimilate much faster and was then better prepared for the disappearance of the low skill factory jobs.

A very good piece on Detroit's industrial development: Detroit and the Great Migration, 1916-1929 by Elizabeth Anne Martin, (the links at the side are chapters, you have to scroll back up to get to the next)
A chart of racial percentages by city:
Detroit clearly differs from other cities. The racial problem isn't race per se, but the poverty inflicted on blacks and the difficulties they encounter in overcoming it. Washington D.C. has a comparable population percentage, but in 1900 it already had a much larger percentage.

jamzo said...

how come the growth of the suburb has not been mentioned?

The buildout of the Interstate Highway System and the development of the suburbs, industrial parks, shopping centers,...., are clearly related to changes in the state of cities which developed when industry displaced agriculture as a mainstay of economic life

federal and state government policy promoted economic growth models that benefited suburban exurban communities...urban communities did not benefit correspondingly...

detroit, baltimore, philadelphia, hartford, lowell, pittsburg, and many other cities did not prosper

however dallas, houston, phoenix, seattle, miami, atlanta denver, have prospered

some would celebrate it the inevitable destruction of "creative capitalism"

some would see it as the outcome of a political/social battle

Anonymous said...

Decades of unbroken Democratic politicians and union-controlled government and closed-shop private sector unionism are the principal factors that killed Detroit. High and increasing taxes to support a bloated and ineffective public sector run by union hacks and corrupt politicians bought by the unions drove business out of Detroit. Without private enterprise, everything else dies (unless you are DC or a state capital). It's not that complex as the apologists would like you to believe. White flight occurred throughout the country, and those other cities survived except for the heavy union-dominated and Democratic-controlled cities like Detroit, Newark, Camden, Cleveland.

Anonymous said...

I appreciate the fact that this article is not afraid to come out and name the glaring racial tension/divide problem that played a key factor in the City's downfall.

Another point to consider is who made up the white and black populations that emigrated to Detroit for work in its factories and automotive industry: a large majority were low-skilled, uneducated workers(black and white)from the South that brought with them their deeply ingrained bigoted and segregationist mind-sets. Racial separation and predjudices, on both sides, merely "relocated" from the South to Detroit's neighborhoods.

This new population didn't simply become comopolitan and integrated just because they lived in the North. Detroit never really had a chance.

wow gold said...

Keep this going please, great job!

Anonymous said...

I know nothing about Detroit, so reading these comments is really interesting. Keep sharing your thoughts.

TdB said...

I enjoyed the comments to this post very much.

ItIsWhatItIs said...

I am not trying to be a jerk, but racism and racial animosity are very much a part of our societies. One thing that continues to mystify me is that people think that somehow racism is against the law. Well, you can't legislate peoples thoughts. It is not against the law to be a racist. Weird...

ItIsWhatItIs said...

Oh, I really enjoyed the comments as well. I would like to come back and see more input, especially those from the Detroit area...

nargun said...

'the racial problem isn't racial per se" - no, it's cultural. Whites come from a culture of keeping up with the jones - classism, but fluid classism allowing for progression. Shamanistic, black, cultures increase likelihood of ego-death rituals causing lack of drive and enhanced sense of unity - but this is not a great survival trait for managing large cities.

Jim Pool said...

Thank you for this interesting conversation. A friend shared the link with my wife and I. I grew up in one Detroit suburb and now live in one of the older inner-ring 8 Mile Corridor communities.

Living here, I think about the issues raised in this conversation. I think many important issues have been raised. To the commenter from Baltimore, Detroit has tried Special Economic Zones (we called them Renaissance Zones), to mixed effect. My sense is that the commenter from Boston is raising some important and very helpful points.

It seems to me that Detroit and its people struggle under a real lack of hope - the feeling that tomorrow can be better than today. So why take care of your neighborhood or work hard at school, if you have no hope?

Reading through all the reviews and comments, it seems to me that the multitude of issues coalesce around the common themes of character, planning and vision. All kinds of people - municipal leaders, community leaders, immigrating southern whites, and more - had animosity and hatred and fear of those who were different. Racism might be more than a character problem, but it certainly isn't less. Then there is the lack of vision and planning - to destroy Black Bottom, to keep expanding the suburbs, the failure to strengthen the central business district, and more.

Since I live here, most of the time I'm thinking about, "What can we do about this?" I've just started reading Edwin Friedman's seminal work, A Failure of Nerve: Leadership in the Age of the Quick Fix. It's my second time through. If Friedman is right, then what Detroit needs are leaders of character with creative vision for what Detroit can be and the necessary courage to carry it out. These leaders are needed in the municipal, business, educational, neighborhood, family and faith-based sectors. What Dan Gilbert and Quicken Loans is doing is one example of this, as are the institutions that gave employees incentives to relocate downtown. Also, the urban ag networks and urban and suburban faith-based groups working together are other smaller-scale examples.

For myself, I've personally committed myself to do this in whatever small ways I can, and to hopefully influence others to do the same.

Chaz Novit said...

What a pity, that in all the years of Detroit descent, most politicians believed there was no problem, just a little glitch that could be corrected by one solution or another--usually more spending, more taxes, more regulation, more government jobs. Its as if one is driving with the parking breaks on their car, and think nothing is really wrong. The evil of driving with parking breaks on is that we can be fooled into accepting this poor performance as normal for the car. performance in this case is defined as good abundant jobs, living wages, low crime, etc etc. But the double folly is losing what could have been in terms of true potential for the city. Its as if on a 20 mile trip, the driver halfway realizes the parking breaks were on. the gasoline has already been irreversibly wasted, the emergency break pads overheated and worn. perhaps it would be proper if all cities, mayors and bureaucrats look at the car an not guess if the car is humming smoothly, but suspect that there is a true higher potential for the prosperity of their city. they should know in advance, as a qualification to getting elected, what that may be. This is in fact the mindset of the entrepreneur. entrepreneurs, like jobs, gates, and bozos wake up every morning, and think what they can do today to improve their garden ( IE company), new products, streamline paperwork and productivity. few successful suspect that their is a ceiling to growth, and they aim to improve their outlook to reach that theoretical growth. in short, they inspect to make sure there is no hidden parking break on their journey, and this is exactly the blindness of bureaucrats. the major difference is that if Jeff Bezos doesn’t perform, or miscalculates a decision, his company will mercifully die. governments can remain in the failed purgatory living on as a zombie skeleton, , because of their power to siphon taxes, are not sustained by productivity, but by the blood and brains of its hostage population.

I will adventure to make some suggestions. Sadly, they are controversial suggestions that are not likely to ever be accepted. and certainly not implemented within the near future. But who knows how societies thinking might change in the distant future, lets say the year 2525. so here it goes..
1) declare Detroit the disaster, and failure that it really is, and petition Washington dc, and the Michigan state legislature for disaster exemption status.
2) under this disaster status, declare Detroit, and economic free zone, like an embarcadero.
3) eliminate all business and personal income taxes for 50 years or more, this includes no state or federal tax, since according to this crazy idea, Washington and Michigan allowed it by approving the economic disaster status.
4) eliminate all property tax for home owners and business.
5) government can collect only a 10% sales tax, or which 1% ( IE 10% of the 10% )goes to Washington, and some percentage goes to the state.
6) all expenditure mandates by Washington are canceled, and Detroit no longer accepts any federal funds.
7) all city costs are eliminated during the bankruptcy proceedings, and a new budget based spending less than 80% of sales tax revenue is enacted. The rest goes into a reserve account for emergency expenses ( of course we know the reserve funds will be misspent by the city anyway ).
8) no shenanigans with borrowing money, no municipal bonds.
9) all violent crime is cruelly and unusually punished, OK, at least harshly.
10) call in reform educators like Ken Robinson, and implement known solutions to better learning, and convert all public schools to a voucher system, which would allow eventual experimentation to a better model.
11) increase the police force at the expense of other government workers.
12) clear up title to all the vacant real estate, and sell at bargain prices to businesses in the production and service industries.( not real estate business or investors )
13) I don’t have a number 13 yet, but I'll think of one, or perhaps the readers have a bright idea that they can think of?