To mark the 10-year anniversary of Detroit’s historic July 18, 2013, municipal bankruptcy filing, the Free Press is examining what has changed, what hasn’t, and why. Find more coverage atfreep.com.
Alease “Cookie” Moore loves her Cornerstone Village neighborhood.
It’s the simple things. Walking the streets, saying hi to neighbors sitting on their porches, planting crops at the community garden — beets, corn, sweet potatoes, herbs. She loves supporting the East Warren Farmers Market and local businesses like the Detroit Pepper Company, a Warren Avenue carryout spot that opened in 2019. She attends neighborhood meetings and advocates for her community as secretary of the Cornerstone Village Community Organization.
the city promised to crack down on blight by suing landlords.
10-year, $1.7 billion reinvestment plan.
Did it work? Are we better off?
retirees. Under state law, the city’s budget reserve is required to hold at least 5% of its projected recurring expenditures each fiscal year to cover a potential financial disaster or reduction in revenues. Detroit’s reserve was 11% of its expenditures in its latest adopted budget.
“Right after the bankruptcy, revenues certainly stabilized, and we’re starting to show some modest growth,” said Detroit Budget Director Steve Watson. “It was in the years just prior to the pandemic, income taxes really started to take off and show much more robust growth … where the bankruptcy assumed somewhere around a 2% growth rate per year in revenues, we’ve instead vastly exceeded that.”
At the end of the 2022 fiscal year, city income tax revenue was about $400 million — up from less than $250 million in 2014. The bankruptcy plan of adjustment — the court-approved document that charted a path forward as the city exited bankruptcy in 2014 — assumed that income tax revenue would be about $300 million in 10 years, Watson said. Increased revenues generated a surplus, which is now funding various initiatives, while allowing money to be set aside for rainy day and retiree protection funds. Watson said the developments have put the city in a stronger financial position in the long term.
Citizens Research Council. At the end of the 2022 fiscal year, Detroit reported more than $544 million in cash on hand, or more than 200 days’ worth of expenditures.
criminal record expungement that could boost employment opportunity in the city.
“Programs that are expunging (criminal) records on job applications, combined with skills training and increased apprenticeships, will go a long way to reduce crime by giving men in their late teens and early 20s hope and meaning,” Metzger said.
Home values
It wasn’t exaggeration or urban myth.
Buyers were picking up houses for the price of a cheap couch in areas of Detroit following the Great Recession.
Those bargain basement prices helped deflate the median owner-occupied home value to just under $43,000 in 2013. That’s according to U.S. census estimates in 2021 dollars from the annual American Community Survey.
But the rebound has been considerable, experts say, with help from an overall real estate market recovery paired with Detroit’s post-bankruptcy reinvestment in basic city services stirring more demand.
The most recent estimate shows that median owner-occupied home values rose to $69,300 in 2021, a nearly 62% increase since 2013. (The data is based on survey respondents’ estimates of how much the home is worth.)
according to the mayor’s office.
New mortgage loans in Detroit still remain low compared with other cities, according to research by Detroit Future City, with only 3,211 home purchase loans made in 2022. And Black applicants were denied home loans in the city at twice the rate as white applicants, the group found in 2020.
Williams Clark said it’s important to make sure the city continues to have a “diversity of price points,” where a wide range of people can buy into the American Dream of homeownership.
“So that people who are existing residents and other residents can benefit from that wealth creation, but there is also still opportunity for people to have access to those homeownership dreams and goals,” she said.
Poverty
Detroit has seen major gains in its households moving out of poverty.
So much that it has surpassed the improvement in most large industrial cities in the Midwest and Northeast since 2012, researchers say. One expert went as far as to call the progress “remarkable.”
“This is real success,” said Luke Shaefer, director of Poverty Solutions, an initiative at the University of Michigan that partners researchers, policymakers and community members toward alleviating poverty. “That’s transformational.”
In 2013, 40.7% of Detroiters were considered living below the poverty line, according to the U.S. Census estimates from the annual American Community Survey. But that number dropped to 30% as of 2021.
announced the city’s unemployment rate had dropped to its lowest level since the Bureau of Labor Statistics started tracking monthly jobless levels in the city in 1990.
Detroit’s unemployment rate in April was 4.2%, according to BLS figures. That rate has risen slightly since then, to 6.4% in May, but is still much lower compared with an average rate of 18.8% in 2013.
Study finds Detroit’s unemployment rate was 16% in March when including a group called “labor force rebounders:” residents who are retired, disabled, students, have family or personal obligations or otherwise choose not to work, but report actively searching for a job in the past month. This group of residents in other surveys may not be considered unemployed because they chose not to work and weren’t laid off recently.
DMACS’ surveys show that the jobless rate has improved from the beginning of the COVID-19 pandemic — when unemployment spiked to 43% — and from September 2021, when DMACS said the jobless rate in the city was 25%. The jobless rate is still higher, though, than its estimated pre-pandemic unemployment rate of 8%.
Lydia Wileden, author of the University of Michigan DMACS report, said the differences between BLS and DMACS data “suggests something about the employment situation is potentially being missed.”
High school graduation rates
While Michigan’s four-year graduation rate has hovered around 80%, Detroit’s has continually lagged behind.
Just before Detroit filed for bankruptcy in 2013, 64.6% of Detroit Public Schools seniors graduated, according to state data, compared with 77% of Michigan seniors. The school district’s four-year graduation rates for students has since ticked up to a high of 78.3% in the 2015-16 school year, and dropped again to 64.5% in 2020-21, at the height of the coronavirus pandemic, as students struggled to show up to school in-person.
signed a $617 million state bailout of the district. The deal restructured the district into two entities: One retired district to exist for debt retirement, and a new community school district with a locally elected board and revenue to operate.
District Superintendent Nikolai Vitti, who took the helm in 2017, has touted academic progress since then, including improved attendance. However, the pandemic set students back considerably, and Detroit continues to rank last among major city school districts in reading and math scores.
‘What about the neighborhoods?’
It’s difficult for many Detroiters to rejoice in the progress that has been made, with much left to be desired.
Karen Knox, an east-sider and executive director of the Eden Gardens Community Association, has noticed that police have been quicker to respond in emergencies, and there are far more working streetlights since the bankruptcy.
But she said she isn’t seeing enough businesses opening, or houses being built in lots where blighted properties were demolished. Illegal dumping, flooding and blight persist. She has seen long wait times for buses, and crime remains a top concern.
“Where did the money go?” asked Knox, 62. “Downtown is booming, but what about the neighborhoods? … No one is talking to neighborhoods and asking them what they want — look how we’re living.”
It’s a familiar sentiment. Detroiters were making the same complaints 10 years ago. But the tone is different. There doesn’t appear to be the same level of anger and desperation. And with poverty and unemployment way down, home values up and a city budget with some breathing room, the outlook appears far less bleak.
Source: freep.com