Decline of Detroit

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An abandoned house in Delray, Detroit.
The city of Detroit has gone through a major economic and demographic decline in recent decades.
The population of the city has fallen from a high of 1,850,000 in 1950 to 701,000 in 2013. The
automobile industry in Detroit has suffered from global competition and has moved much of the
remaining production out of Detroit. Some of the highest crime rates in America are now occurring in
Detroit, and huge areas of the city are in a state of severe urban decay. In 2013, Detroit filed
the largest municipal bankruptcy case in U.S. history.
[1][2]

Contents
[hide]
1 Contributors to decline
o 1.1 Role of the automobile industry
o 1.2 Rise of the suburbs
o 1.3 1950s job losses
o 1.4 1950s to 1960s freeway construction
o 1.5 1967 Detroit riot
1.5.1 Economic and social fallout of the 1967 riots
o 1.6 1970s and 1980s
2 Problems
o 2.1 Population decline
o 2.2 Unemployment
o 2.3 Poverty
o 2.4 Urban decay
o 2.5 Crime
o 2.6 City finances
3 See also
4 References
5 External links
Contributors to decline[edit]
See also: Rust Belt
The deindustrialization of Detroit has been a major factor in the population decline of the city.
[3]

Role of the automobile industry[edit]
"Detroit rose and fell with the automobile industry."
[4]
Before the advent of the automobile, Detroit
was a small, compact, regional manufacturing center. In 1900 Detroit had a population of 285,000,
thirteenth largest city in the U.S.
[4]
Over the following decades, the growth of the automobile industry,
including affiliated activities such as parts manufacturing, came to dwarf all other manufacturing in
the city. The industry drew in a million new residents to the city. At Ford Motor's iconic and enormous
River Rouge plant alone, opened in 1927 in Dearborn, there were over 90,000 workers.
[4]

The shifting nature of the work force stimulated by the rapid growth of the auto industry had an
important impact on the city's future development. The new workers came from diverse and soon
far-flung sources. Near-by Canada was important early on, many of the workers came from Eastern
and southern Europe, a large portion of them being ethnic Italians, Hungarians and Poles. An
important attraction for these workers was that the new assembly line techniques required little prior
training or education to get a job in the industry.
[5]

The breadth of sources for the growing demand for auto assembly workers, however, was sharply
limited by the turmoil of World War I, and shortly thereafter by the very restrictive U.S. Immigration
Act of 1924 with its very limited annual quotas for new immigrants. In response, the industry - with
Ford in the forefront - turned in a significant way to hiring African-Americans, who were leaving the
South in huge numbers in response to the combination of a post-war agricultural slump and
continuing Jim Crow practices.
[6]
At the same time large numbers of southern whites were hired, as
well as large numbers of Mexicans, since immigration from most of the western hemisphere was not
restricted at all by new immigration quotas.
By 1930 Detroit's population had grown to nearly 1.6 million, and then to nearly 2.0 million by its
peak shortly before 1950. A World War II boom in the manufacture of war materielcontributed to this
growth surge.
[7]
This population was, however, very spread out in comparison with other U.S.
industrial cities. A variety of factors associated with the auto industry fed this trend. There was the
large influx of workers. They earned comparatively high wages in the auto industry. The plants they
worked at, belonging to different major and minor manufacturers, were spread around the city. The
workers tended to live along extended bus and street car lines leading to their work places. The
result of these influences, beginning already by the 1920s, was that many workers bought or built
their own single family or duplex homes. They did not tend to live in large apartment houses, as in
New York, or in closely spaced row houses as in Philadelphia.
[7]
After New Deal labor legislation,
auto-union secured wages and benefits facilitated this willingness to take on the cost and risk of
home ownership.
[7]

These decentralizing trends, however, did not have equal effects on African-American residents of
the city. They tended to have far less access to New Deal mortgage support programs such
as Federal Housing Authority and Veterans Administration insured mortgages. African-American
neighborhoods were viewed by lenders and the federal programs as riskier, resulting - in this period
- in much lower rates of home ownership for African-Americans than other residents of the city.
[7]

In contrast, the auto industry also gave rise to a very large and well-compensated layer of managers
and executives. There were also large numbers of attorneys, advertising executives, and other white
collar workers who supported the industry's managerial force. These white collar workers, already by
the 1920s, had begun to move to neighborhoods well removed from the industry's factories and the
neighborhoods of their workers. This upper stratum moved to outlying neighborhoods, and further, to
well-to-do suburbs such asBloomfield Hills and Grosse Pointe. Oakland County, north of the city,
became a popular place to live for executives in the industry. "By the second half of the twentieth
century it was one of the wealthiest counties in the United States, a place profoundly shaped by the
concentration of auto industry derived wealth."
[8]

These decentralizing trends, combined with the auto industry itself, which fed reductions in public
transit funding and service, made Detroit look much more like Los Angeles than the metropolises of
the East. Public policy was automobile oriented. Funds were directed to the building of expressways
for automobile traffic, to the detriment of public transit and the inner city neighborhoods through
which they were cut to get to the auto factories and the downtown office buildings.
[9]

These processes, in which the growth of the auto industry had played such a large part, combined
with racial segregation to give Detroit, by 1960, its particularly noteworthy character of a substantially
African-American inner city surrounded by mainly white outer sections of the city and suburbs. By
1960 there were more whites living in the city's suburbs than the city itself. On the other hand, there
were very few African-Americans in the suburbs. Real estate agents would not sell to them, and if
African-Americans did try to move into suburbs there was "intense hostility and often violence" in
reaction.
[9]

The auto industry too was decentralizing away from Detroit proper. This change was facilitated by
the great concentration of automobile production into the hands of the "Big Three" of General
Motors, Ford, and Chrysler. The Big Three were able to put nearly every smaller competitor auto-
maker out of business. While this corporate concentration was taking place, the Big Three were
shifting their production out of central Detroit. Between 1945 and 1957 the Big Three built 25 new
manufacturing plants in the metropolitan area, not one of them in the city itself.
[10]

The number and character of these new, suburban auto factories was a harbinger of future trends
detrimental to the economic health of Detroit. There was an interaction between factory
decentralization and the nature of the industry's post-New Deal unionized labor force. Ford Motor
was one of the first to undertake major decentralization, in reaction to labor developments. Ford's
workers voted to join the UAW in 1941. This led Ford to be concerned about the vulnerability of its
huge, flagship Rouge River plant to labor unrest. The workers at this plant were "among the
industry's most well-organized, racially and ethnically diverse, and militant." A strike at this key plant
could bring the company's manufacturing operations as a whole to a halt. Ford therefore
decentralized operations from this plant, to soften union power (and to introduce new technologies in
new plants, and expand to new markets). Ford often built up parallel production facilities, making the
same products, so that the effect of a strike at any one facility would be lessened. The results for the
River Rouge plant are striking. From its peak labor force of 90,000 around 1930, the number of
workers there declined to 30,000 by 1960 and only about 6,000 by 1990. This decline was mainly
due to automation
[10]

The spread of the auto industry outward from Detroit proper in the 1950s was the beginning of a
process that extended much further afield. Auto plants, and the parts suppliers associated with the
industry, were relocated to the southern U.S., and to Canada and Mexico. The major auto plants left
in Detroit were closed down, and their workers increasingly left behind. When the auto industry's
facilities moved out, there were dramatically adverse ripple economic effects on the city. The
neighborhood businesses that had catered to auto workers shut down. This direct and indirect
economic contraction caused the city to lose property taxes, wage taxes, and population (and thus
consumer demand). The closed auto plants were also often abandoned in a period before strong
environmental regulation, causing the sites to become so-called "brownfields," unattractive to
potential replacement businesses because of the pollution hang-over from decades of industrial
production.
[11]
The pattern of the deteriorating city by the mid-1960s was visibly associated with the
largely departed auto industry. The neighborhoods with the most closed stores, vacant houses, and
abandoned lots were in what had formerly been the most heavily populated parts of the city,
adjacent to the now-closed older major auto plants.
[11]

By the 1970s and 1980s the auto industry suffered setbacks that further impacted Detroit. The
industry encountered the rise of OPEC and the resulting sharp increase in gasoline prices. It faced
new and intense international competition, particularly from Japanese and German makers. Chrysler
avoided bankruptcy in the late 1970s, but only with the aid of a federal bailout. GM and Ford also
struggled financially. The industry fought to regain its competitive footing, but did so in very
substantial part by introducing cost-cutting techniques focused around automation and thus
reduction of labor cost and number of workers. It also relocated ever more of its manufacturing to
lower cost states in the U.S. and to low-wage countries. Detroit's residents thus had access to fewer
and fewer good-paying, secure auto manufacturing jobs.
[11]

The leadership of Detroit was not passive in the face of the adverse trends that developments in the
auto industry posed. Because the city had flourished in the heyday of the auto industry, the city
made periodic attempts to stimulate a revival of the industry within the city. For example, in the
1980s the cities of Detroit and Hamtramck used the power ofeminent domain to level part of what
had been Poletown to make a parking lot for a new automobile factory. On that site there was built,
with substantial government subsidies, a new, low-rise suburban type Cadillac plant. The
new Detroit/Hamtramck Assembly employs 1,600 workers.
[12]
In the 1990s the city subsidized the
building of a new Chrysler plant on the city's east side, Jefferson North Assembly which currently
employs 4,600 people. These efforts, however, were an uphill struggle against overall trends in the
industry.
[11]
In 2009 Chrysler filed a Chapter 11 bankruptcy case, and survives in a partnership
with Fiat SpA of Italy.
[13]
while GM filed for Chapter 11 bankruptcy on June 1, 2009, and survives as
a much smaller company - smaller now than Japan's Toyota Motor Company.
[14]
A little over two
years after these major blows to the U.S. auto industry, the city itself went intoChapter 9 bankruptcy.
Rise of the suburbs[edit]
By the 1930s, Detroit had essentially reached its geographic limits, with its expansion stopped by
either going against incorporated cities or facing Michigan laws making it impossible to cross a
county line. The only townships bordering Detroit in 1950 that did not cross a county line were
Redford Township and Dearborn Township. By Michigan law, the majority of residents in a charter
township need to approve annexations, which prevented Detroit from annexing either of these
neighboring areas.
[15]
Michigan law further makes it impossible for one city to annex another without
the city being dissolved.
1950s job losses[edit]


Packard Automotive Plant, closed since 1958.
In the postwar period, the city had lost nearly 150,000 jobs to the suburbs. Factors were a
combination of changes in technology, increased automation, consolidation of the auto industry,
taxation policies, the need for different kinds of manufacturing space, and the construction of the
highway system that eased transportation for commuters. Major companies like Packard, Hudson,
andStudebaker, as well as hundreds of smaller companies, declined significantly or went out of
business entirely. In the 1950s, the unemployment rate hovered near 10 percent.
1950s to 1960s freeway construction[edit]
Freeway construction in the 1950s and 1960s cut through the most densely populated black
neighborhoods of Detroit. The demolition of buildings in Lower East Side, Lower West Side,
Paradise Valley, and the Hastings Street business district, and the subsequent physical barriers
caused by the freeways, split and reduced the thriving neighborhoods. In the 1950s, 2800 buildings
were removed just for the Edsel Ford Expressway (I-94), including jazz nightclubs, churches,
community buildings, businesses and homes.
[16]
The freeways also made commuting from suburban
communties a more viable alternative to living in the city limits.
1967 Detroit riot[edit]
Further information: 1967 Detroit riot
The summer of 1967 saw five days of riots in Detroit.
[17][18]
Over the period of five days, forty-three
people died, of whom 33 were black and 10 white. There were 467 injured: 182 civilians, 167 Detroit
police officers, 83 Detroit firefighters, 17 National Guard troops, 16 State Police officers, and three
U.S. Army soldiers.
2,509 stores were looted or burned, 388 families were rendered homeless or displaced, and 412
buildings were burned or damaged enough to be demolished. Dollar losses from arson and looting
ranged from $40 million to $80 million.
[19]

Economic and social fallout of the 1967 riots[edit]


Per capita income in Detroit and surrounding region from the 2000 census. The dotted line represents the city
boundary.
After the riots, thousands of small businesses closed permanently or relocated to safer
neighborhoods, and the affected district lay in ruins for decades.
[20]

Of the 1967 riots, politician Coleman Young, Detroit's first black mayor, wrote in 1994:
The heaviest casualty, however, was the city. Detroit's losses went a hell of a lot deeper than the
immediate toll of lives and buildings. The riot put Detroit on the fast track to economic desolation,
mugging the city and making off with incalculable value in jobs, earnings taxes, corporate taxes,
retail dollars, sales taxes, mortgages, interest, property taxes, development dollars, investment
dollars, tourism dollars, and plain damn money. The money was carried out in the pockets of the
businesses and the white people who fled as fast as they could. The white exodus from Detroit had
been prodigiously steady prior to the riot, totally twenty-two thousand in 1966, but afterwards it was
frantic. In 1967, with less than half the year remaining after the summer explosionthe outward
population migration reached sixty-seven thousand. In 1968 the figure hit eighty-thousand, followed
by forty-six thousand in 1969.
[18]

According to the economist Thomas Sowell:
Before the ghetto riot of 1967, Detroit's black population had the highest rate of home-ownership of
any black urban population in the country, and their unemployment rate was just 3.4 percent. It was
not despair that fueled the riot. It was the riot which marked the beginning of the decline of Detroit to
its current state of despair. Detroit's population today is only half of what it once was, and its most
productive people have been the ones who fled.
[17]

1970s and 1980s[edit]
The 1970 census showed that whites still made up a majority of Detroit's population. However, by
the 1980 census, whites had fled at such a large rate that the city had gone from 55 percent white to
only 34 percent white in a decade. The decline was even more stark considering that when Detroit's
population reached its all-time high in 1950, the city was 83 percent white.
Economist Walter E. Williams writes that the decline was sparked by race-based city policies which
caused more affluent whites to leave the city (sometimes known as "White flight"), reducing the tax
base, and leading to fewer employment opportunities and customers in the city.
[21]
The departure of
middle class whites left blacks in control of a city suffering from an inadequate tax base, too few
jobs, and swollen welfare rolls.
[22]
According to Chafets, "Among the nations major cities, Detroit
was at or near the top of unemployment, poverty per capita, and infant mortality throughout the
1980s."
[23]

Detroit became notorious for violent crime in the 1970s and 1980s. Dozens of violent black street
gangs gained control of the city's large drug trade, which began with the heroin epidemic of the
1970s and grew into the larger crack cocaine epidemic of the 1980s and early 1990s. There were
numerous major criminal gangs that were founded in Detroit and dominated the drug trade at various
times; most were short-lived. They included The Errol Flynns (east side), Nasty Flynns (later the NF
Bangers) and Black Killers and the drug consortiums of the 1980s such as Young Boys Inc., Pony
Down, Best Friends, Black Mafia Family and the Chambers Brothers.
[24]
The Young Boys were
innovative, opening franchises in other cities, using youth too young to be prosecuted, promoting
brand names, and unleashing extreme brutality to frighten away rivals.
[25]

Several times during the 1970s and 1980s Detroit was named the arson capital of America, and
repeatedly the murder capital of America. Often Detroit was listed by FBI crime statistics as the
"most dangerous city in America" during this time. Crime rates in Detroit peaked in 1991 at more
than 2,700 violent crimes per 100,000 people.
[26]
Population decline left abandoned buildings that
have become magnets for drugs, arson, and other crime. Such violent crimes has also
pushed tourism away from the city, and several foreign countries even issued travel warnings for the
city.
[26]

Around Halloween, a traditional day for pranks in late October, Detroit youth went on a rampage
called "Devil's Night" in the 1980s. A tradition of light-hearted minor vandalism, such as soaping
windows, had emerged in the 1930s, but by the 1980s it had become, said Mayor Young, "a vision
from hell."
[27]

The arson primarily took place in the inner city, but surrounding suburbs were often affected as well.
The crimes became increasingly destructive. Over 800 fires were set in the peak year 1984,
overwhelming the city's fire department. Hundreds of vacant homes across the city were set ablaze.
In later years, the arson continued, but the number of fires was reduced by razing thousands of
abandoned houses that often were used to sell drugs5000 in 198990 alone. Every year the city
mobilizes "Angel's Night," with tens of thousands of volunteers patrolling areas at high risk.
[28][29]

Problems[edit]
Population decline[edit]


As Detroit's abandoned houses have been demolished, gaps in the previously urban environment have emerged,
which is sometimes called urban prairie.
Further information: Demographic history of Detroit
Long a major population center, Detroit has been going through a major reduction in population; the
city has lost over 60% of its population since 1950.
[30]
A Michigan web site compares Youngstown,
Ohio to Detroit on a much smaller scale due to its own economic problems.
[31]

Detroit reached its population peak in the 1950 census at over 1.8 million people, and decreased in
population with each subsequent census; as of the 2010 census, the city has just over 700,000
residents, adding up to a total loss of 61% of the population.
[32][33]

A major change in the racial composition of the city also occurred over that same period; from 1950
to 2010 the black/white percentage of population went from 16.2%/83.6% to 82.7%/10.6%.
[34]
Due to
the prevalence of the one-drop rule in assigning African-American race in the 20th-century United
States, arguably a better comparison figure from 2010 is 84.3% marking African-American even if
they marked some other race, and the 7.8% non-Hispanic white population of Detroit in 2010 might
be a better figure to use for comparison figured.
[35]
Approximately 1,400,000 of the 1,600,000 white
people in Detroit after World War II have left the city, with many going to the suburbs.
[36]

Unemployment[edit]
According to the U.S. Department of Labor Bureau of Labor Statistics, of the 50 largest cities in the
country, Detroit has the highest unemployment rate, at 23.1%.
[37]

Poverty[edit]
The U.S. Census Bureau's Statistical Abstract of the United States: 2012 ranks Detroit last among all
71 U.S. cities for which rates were calculated in percentage of the city's population living below the
poverty level. The individual rate living below the poverty level is 36.4%; the family rate is 31.3%.
[38]

Urban decay[edit]


This map shows vacancy rates of housing units in Wayne County, Michigan, and also in the city of Detroit.


Dance floor of the Vanity Ballroom Building in 2010.


The Film Exchange Building in 2012.
Detroit has been described by some as a ghost town.
[39][40]
Parts of the city are so thoroughly
abandoned they have been described as looking like farmland or even completely wild.
[36]

A significant percentage of housing parcels in the city are vacant, with abandoned lots making up
more than half of total residential lots in many large portions of the city.
[41]
With at least 70,000
abandoned buildings, 31,000 empty houses, and 90,000 vacant lots, Detroit has become notorious
for its urban blight.
[39][42]

In 2010 Mayor Bing put forth a plan to bulldoze one fourth of the city.
[43]
The plan was to concentrate
Detroit's remaining population into certain areas to improve the delivery of essential city services,
which the city has had significant difficulty providing (policing, fire protection, trash removal, snow
removal, lighting, etc.).
[39]
In February 2013 the Detroit Free Press reported the Mayor's plan to
accelerate the program.
[44]
The project has hopes "for federal funding to replicate it [the bulldozing
plan] across the city to tackle Detroits problems with tens of thousands of abandoned and blighted
homes and buildings." Bing said the project aims "to rightsize the citys resources to reflect its
smaller population."
The average price of homes sold in Detroit in 2012 was $7,500; as of January 2013 47 houses in
Detroit were listed for $500 or less, with five properties listed for $1.
[40]
Despite the extremely low
price of Detroit properties, most of the properties have been on the market for more than a year as
buyers balk at the boarded up, abandoned houses of Detroit.
[40]
The Detroit News reported that more
than half of Detroit property owners did not pay taxes in 2012, at a loss to the city of $131 million
(equal to 12% of the city's general fund budget).
[45]

The first comprehensive analysis of the city's tens of thousands of abandoned and dilapidated
buildings is set to be completed in Spring 2014.
[46]

Crime[edit]
Further information: Crime in Detroit
Detroit has some of the highest crime rates in the United States, with a rate of 62.18 per 1,000
residents for property crimes, and 16.73 per 1,000 for violent crimes (compared to national figures of
32 per 1,000 for property crimes and 5 per 1,000 for violent crime in 2008).
[47]
Detroit's murder rate
was 53 per 100,000 in 2012, ten times that of New York City.
[48]
A 2012 Forbes report named Detroit
as the most dangerous city in the United States for the fourth year in a row. It cited FBI survey data
that found that the city's metropolitan area had a significant rate of violent crimes: murder and non-
negligent manslaughter, forcible rape, robbery, and aggravated assault.
[49][50]

According to Detroit officials in 2007, about 65 to 70 percent of homicides in the city were drug
related.
[51]
The rate of unsolved murders in the city is at roughly 70%.
[52]

City finances[edit]
Further information: Detroit bankruptcy
On March 1, 2013, Governor Rick Snyder announced the state was taking over the financial control
of the city from the local government.
[53]
The state is requesting a review team to look over the
financial state of the city and determine if an emergency manager is needed to take over control of
city spending from city council.
[53]

On March 14, 2013, Michigan's Local Emergency Financial Assistance Loan Board (ELB) appointed
an emergency financial manager, Kevyn Orr, effective on March 25, 2013.
[54]
In mid-May 2013, Orr
released his first report on Detroits finances since he took the job.
[55][56]
The results were generally
negative regarding Detroits financial health.
[55][56]
The report said that Detroit is "clearly insolvent on
a cash flow basis."
[57]
The report said that Detroit will finish its current budget year with a $162 million
cash-flow shortfall
[55][56]
and that the projected budget deficit is expected to reach $386 million in less
than two months.
[55]
The report said that costs for retiree benefits are eating up a third of Detroits
budget and that public services are suffering as Detroit's revenues and population shrink each
year.
[56]
The report wasn't intended to offer a complete blueprint for Orr's plans for fixing the crisis;
more details about those plans are expected to emerge within a few months.
[56]

After several months of negotiations, Orr was ultimately unable to come to a deal with Detroit's
creditors, unions, and pension boards
[1]
and therefore filed for Chapter 9bankruptcy protection in the
Eastern District of Michigan U.S. Bankruptcy Court on July 18, 2013, the largest U.S. city ever to do
so, with outstanding financial obligations to more than 100,000 creditors totaling approximately $18.5
billion.
[58][59][60]

Detroit rose and fell with the automobile industry. Before the advent of the automobile, Detroit
was a small, compact, regional manufacturing center. In 1900 Detroit had a population of
285,000, thirteenth largest city in the U.S .
The new workers came from Eastern and southern Europe, a large portion of them being ethnic
Italians, Hungarians and Poles.
the industry - with Ford in the forefront - turned in a significant way to hiring African-Americans
in response to the combination of a post-war .
By 1930 Detroit's population had grown to nearly 1.6 million, and then to nearly 2.0 million A
World War II boom in the manufacture of war materiel contributed to this growth.
They earned comparatively high wages in the auto industry many workers bought or built their
own single family or duplex homes.
the auto industry also gave rise to a very large and well-compensated layer of managers and
executives. white collar workers begun to move to outlying neighborhoods, and further, to well-
to-do suburbs such as Bloomfield Hills and Grosse Pointe. Oakland County, north of the city,
became a popular place to live for executives in the industry.
Public policy was automobile oriented. Funds were directed to the building of expressways for
automobile traffic, to the detriment of public transit and the inner city neighborhoods .
These processes, in which the growth of the auto industry had played such a large part,
combined with racial segregation to give Detroit. . By 1960 there were more whites living in the
city's suburbs than the city itself. On the other hand, there were very few African-Americans in
the suburbs.
This change was facilitated by the great concentration of automobile production into the hands
of the "Big Three" of General Motors, Ford, and Chrysler. Between 1945 and 1957 the Big Three
built 25 new manufacturing plants in the metropolitan area, not one of them in the city itself.
Ford Motor was one of the first to undertake major decentralization . BECAUSE OF THIS labor
force of 90,000 around 1930, the number of workers there declined to 30,000 by 1960 and only
about 6,000 by 1990. This decline was mainly due to automation.
Auto plants were relocated to the southern U.S., and to Canada and Mexico. there were
dramatically adverse ripple economic effects on the city. This direct and indirect economic
contraction caused the city to lose property taxes, wage taxes, and population . Now the
neighborhoods comprised of the most closed stores, vacant houses, and abandoned lots.
Detroit's residents thus had access to fewer and fewer good-paying, secure auto manufacturing
jobs. A little over two years after these major blows to the U.S. auto industry, the city itself went
into Chapter 9 bankruptcy