The newly appointed emergency financial manager of Detroit begins the Herculean task Monday of turning the once bustling capital of the car business back from the brink of bankruptcy.
Though Detroit still has its cultural centers, architectural gems, funky restaurants and packed sporting events downtown, the city has suffered an urban blight that has slowly eaten away at its neighborhoods.
"Detroit has become a ghost town," says Russ Wilson, who has lived in Detroit for all of his 47 years. "You can live on one block and live on a real nice block, and then the block over behind you can be so desolate and just deserted. It's horrible."
Wilson, a property owner and landlord in Detroit, says just two decades ago things were very different.
"The blocks were full of people," he says, "children playing, people had jobs. But now people have no jobs; they have no hope."
In the 1940s and '50s, at the height of auto manufacturing, Detroit was a booming metropolis. But as the auto factories expanded, they opened new plants in the suburbs, taking working-class Detroiters with them. Racial tensions also led to "white flight" from the city.
Over time, the suburbs have sucked the population out of inner-city Detroit, it dropped by a million since 1950, leaving empty neighborhoods, abandoned properties and very few residents from whom to draw tax dollars to pay for everything.
Those that remained, says Scott Martelle, author of Detroit: A Biography, are increasingly stuck in poverty.
"In Detroit in the last census, 1 in 4 people hadn't graduated high school," Martelle says. "That compares with 1 in 10 in the state of Michigan. Thirty-six percent of Detroiters live below the federal poverty level, compared with 16 percent statewide."
The city of Detroit is large, about 140 square miles, that's enough room to fit Manhattan, Boston and San Francisco inside with room to spare, Martelle says. But the population has declined to just over 700,000 — that's fewer than the number of people on the National Mall for President Obama's second inauguration.
Imagine that number of people paying city taxes for the roads, public transportation, education and emergency services for a 140-square-mile city. It's just not efficient.
Is Hope On The Way?
Last week, Michigan Gov. Rick Snyder, a Republican, took a dramatic step by taking financial control away from the city government and putting it in the hands of Kevyn Orr, his chosen emergency financial manager. The move is completely legal under state law.
Some Detroiters, like 56-year-old Keith Higgins, are happy that someone is finally doing something about the city, which has been on the brink of bankruptcy for years.
"There's not decent management taking place in this city," he says. "Financially, there's been misappropriation of funds. There's been stealing, there's been lying [and] there's been cheating." Detroit's former Mayor Kwame Kilpatrick was recently found guilty of federal racketeering and corruption charges
But other residents are protesting what they see as a violation of their rights, since they didn't vote Orr into government and he now controls their tax dollars.
"I think everybody is of two minds about this," journalist Stephen Henderson tells weekends on All Things Considered guest host Don Gonyea.
Born and raised in Detroit, Henderson has written about the city government and the feelings of residents for the Detroit Free Press, where he is an editor.
"Anyone who lives here can tell you how awful city services have become," he says. "People are literally dying waiting for ambulances. The things that we would expect any city to deliver at a basic level just do not happen here."
At the same time, he says, no one is thrilled about the idea of an appointed financial manager taking away power from the people they've elected. Coupled with the fact that a Republican governor made the appointment for a Democratic city, Henderson says, people are even more suspicious.
At this point, however, he says the law is what it is.
"This is the process that we've chosen as a state to deal with cities and school districts when they get into financial trouble," he says. "It's one thing to say you're not happy about this; I think it's another thing to indulge the unreality of the idea that you can now stop it.
"It's really sort of a distraction from the work that we need Kevyn Orr to start doing on Monday," he says.
Detroit has been dealing with a loss of population and financial troubles for years, but the tipping point, Henderson says, is when agreements made between the Detroit City Council, Gov. Snyder and the state treasurer didn't take place over the last 12 months.
"The governor just had enough," he says.
Detroit's cash problems, Henderson says, are connected to the decline of the city's population and tax base over a very long period of time, and no one has had a great answer for fixing it.
"Detroit right now is collecting half the income tax money that it was just 12 years ago," he says. "We've got to figure another way to either downsize, so that we are only spending as much as we are taking in, or find a way to get more revenue to the table."
A Tale Of Two Cities
Detroit's plight sounds really bleak, but other cities have been in similar positions and have pulled out of the downward spiral.
In 1995, Washington, D.C., faced huge financial, education and crime problems similar to those in Detroit. And like Detroit, D.C. was subject to an emergency financial takeover.
Anthony Williams was the man appointed to handle the district's financial crisis. He went on to become mayor of the city for two terms, but back in the late 1990s, he faced a job similar to the one Orr faces.
"My job was to essentially put in place a budget and financial plan that would bring the district back to solvency and ultimately financial recovery," Williams tells Gonyea.
He says financial accountability is key to turning around a city's social and governmental problems. It's also the key to public trust and the willingness of businesses and citizens to live in and invest in a community.
Williams says Orr has a tough job ahead, but that he needs to start taking baby steps immediately and "just start doing things."
"Show people that there is intelligent life, that the light's on and somebody is home," he says. "Putting in place a program that shows people that for the first time, maybe in a long time, there will be every year, not only a budget for the current year, but a financial plan for the out years."
Williams acknowledges Detroit's unique problems, but is confident that this is the right step for the city.
"[The] sense that the city has been victimized over years and years — some of it may be true, some may not be," he says, "[but] ... we have to avoid re-litigating the past and look toward the future."
And if there's one thing Detroiters are good at, it's hanging tough and looking to a better future.
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Transcript
DON GONYEA, HOST:
This is WEEKENDS on ALL THINGS CONSIDERED from NPR News. I'm Don Gonyea.
On the show this week, the latest in service robot technology. Are we any closer to a Sci-Fi world of robot housekeepers? And the story of an integrated baseball team in Bismarck, North Dakota, that broke the color line a decade before Jackie Robinson signed with the Brooklyn Dodgers.
But first, we all heard the stories about the city of Detroit and its decades-long decline.
RUSS WILSON: Detroit has just become a ghost town.
GONYEA: That's Russ Wilson who has lived in Detroit for all of his 47 years. He's a property owner and landlord so he especially notices the urban blight that has taken over this once bustling industrial capital of the car business. There are still cultural centers, architectural gems, funky restaurants and big sporting events downtown. But in the neighborhoods...
WILSON: Twenty years ago, there was houses, the blocks were full of people, children playing, people had jobs. But now people have no jobs. They have no hope.
GONYEA: That's our cover story today: A look at the city of Detroit, which, by the way, is a place I consider home. What's ahead for the city, and can it be saved?
GOVERNOR RICK SNYDER: Today, I'm confirming my determination that a financial emergency exists in the city of Detroit.
GONYEA: That was Michigan Governor Rick Snyder, a Republican, at a press conference this month. Under state law, Snyder took financial control away from the city government and put it in the hands of an emergency manager, Kevyn Orr, who starts his new job on Monday. Can he make a difference?
On the brink of bankruptcy for years, some Detroiters like 27-year-old Kelli Holt are happy that someone is finally doing something. As she waits at the bus station, Holt says she feels stuck and unsafe in downtown Detroit.
KELLI HOLT: My family's here. And right now, financial difficulty is preventing me from moving anywhere. I was always safe as a kid walking in Detroit. But now, I can't go without walking up the street looking over my shoulder, making sure nobody's trying to rob me.
GONYEA: Also waiting for the bus, 57-year-old Keith Higgins. He thinks Detroit doesn't deserve all the bad press.
KEITH HIGGINS: The news is exaggerating to a degree. It's bad, but it ain't bad as they say.
GONYEA: But he does express frustration with the city government.
HIGGINS: There's not decent management taking place in the city. Financially, there's been misappropriation of funds, there's been stealing, there's been lying and there's been cheating.
GONYEA: The most recent and infamous example of that is Detroit's former Mayor Kwame Kilpatrick, who this month was found guilty of federal racketeering and corruption charges. As for the emergency takeover, many are protesting what they see as a violation of their voter rights. They didn't vote Orr into the city government, and now he controls their tax dollars.
STEPHEN HENDERSON: Well, I think everybody is of sort of two minds about this.
GONYEA: Stephen Henderson was born and raised in Detroit. He's written about the city for the Detroit Free Press where he's an editor. Henderson is also host of "American Black Journal" on Detroit Public TV.
HENDERSON: Anyone who lives here can tell you how awful our city services have become. You know, I mean, people are literally dying, waiting for ambulances. The lights are off in 45 percent of the city. The things that we would expect any city to deliver at a basic level just do not happen here. And I think everybody is getting tired of the idea of that being true and the delay in trying to fix that.
You know, at the same time, nobody is cheering the idea of an emergency financial manager, which sort of wipes away the Democratic process in the city for at least a short time, and takes the people we've chosen to try to fix things here and sets them aside.
GONYEA: And how much does it matter that it is a Republican governor, Governor Snyder, and Detroit, obviously, a hugely Democratic city?
HENDERSON: Well, I think that matters quite a bit. I mean, the fact that Rick Snyder is a Republican has almost everything to do with the people being suspicious of the motives and worrying about this being a political power grab.
GONYEA: The city government, the city council tried to fight this, tried to block it, went to the courts to no avail. It's now happening. There is an emergency manager. Has anything changed at city hall? Is there a sense, OK, this is happening, what do we do?
HENDERSON: You know, as you point out, it's a done deal. Kevyn Orr starts on Monday. It's one thing to say you're not happy about this. I think it's another thing to sort of indulge the unreality of the idea that you can now stop it now that it's happened. I mean, there's no point in that, and it's really sort of a distraction from the work that we need Kevyn Orr to start doing on Monday.
GONYEA: The city has been dealing with loss of population for decades now. And financial trouble - serious financial troubles are nothing new. But what was the tipping point? How did we get here?
HENDERSON: Well, I mean, last year, the city was facing one of its - the cash crises where the governor and the treasurers - the treasurer intervened at that point to say, look, we've got to have a set of agreements to prevent this from happening again. Over the last 12 months, though, what we've seen is that the steps that were agreed to in that agreement didn't take place. So many of the things that we were supposed to do, city council stood in the way of. The mayor, to some extent, was unable to convince them - the governor just had had enough and decided that this was the only way to get things fixed.
GONYEA: But it sounds like there's just a lack of confidence in institution. Certainly, the city government, the city council, but also in the state government and perhaps even this emergency manager.
HENDERSON: Yeah. Well, I think everybody here has heard - you know, I'm a Detroit native. I grew up here in the '70s and '80s. How long we've been talking about the city government turning itself around? The cash problems that we're having now are connected to the decline of the city's population and tax space over a very long period of time. And nobody really has had a great answer for fixing that.
Detroit right now is collecting half the income tax money that it was just 12 years ago. I mean, if you're managing a business that has half the revenue it had 12 years ago, I mean, you'd be looking for a new business to be in. Cities don't have that option, really. We've got to figure another way to either downsize so that we are only spending as much as we're now taking in or find a way to get more revenue to the table.
GONYEA: And that gets us to one of the major problems of Detroit, the so-called donut hole effect. In the 1940s and '50s, at the height of auto manufacturing, Detroit was a booming metropolis. But racial tensions led to white flight from the city. Additionally, auto companies opened new plants out in the suburbs, taking jobs and workers with them. The population of Detroit itself has dropped by a million since 1950, leaving empty neighborhoods, abandoned properties, and too few residents and too few tax dollars to pay for everything.
SCOTT MARTELLE: This is a city that's 140 square miles.
GONYEA: Scott Martelle is the author of the book "Detroit: A Biography."
MARTELLE: The Detroit Free Press, one of the local papers, years ago, did this wonderful graphic where they superimposed a map of Manhattan, the city of Boston and the city of San Francisco over the city of Detroit, and they fit in with plenty of room to spare. So think about that for a second. I mean, that kind of space with 700,000 people in it at this point.
GONYEA: Seven hundred thousand people, that's fewer than the number of people on the National Mall for President Obama's second inauguration. Imagine that number of people paying city taxes for the roads, public transportation, education, police services for a 140-square-mile city. And those people left are increasingly those stuck in poverty. Scott Martelle says the numbers tell the story.
In Detroit in the last census, one in four people hadn't graduated from high school. That compares with one in 10 people in the state of Michigan overall. Homeownership in Detroit, 54 percent versus 74 percent in the rest of the state. Perhaps the most intriguing number here is the poverty level. Thirty-six percent of Detroit has lived below the federal poverty level compared to 16 percent statewide.
It sounds really bleak, but other U.S. cities have found themselves in dire financial situations. In 1995, the city of Washington, D.C., faced huge financial education and crime problems. And like Detroit, Washington, D.C., was subject to an emergency financial takeover.
Anthony Williams was the man appointed to handle the district's financial crisis. He went on to become mayor of the city for two terms. But back in the late '90s, he faced a job similar to that facing Detroit's emergency financial manager.
ANTHONY WILLIAMS: My job was to essentially put in place a budget and financial plan that would bring the district back to a solvency and then ultimately financial recovery.
GONYEA: Mayor Williams says it all has to start with accountability.
WILLIAMS: I guess there is an understanding that financial accountability is key to public trust, which is key to settled expectations and the willingness of businesses and citizens to live in and invest in a community.
GONYEA: And Mayor Williams thinks Detroit's emergency manager, Kevyn Orr, needs to start by taking some baby steps immediately.
WILLIAMS: Just start doing things, get some points on the board that show people, you know, there's intelligent life, that there's a light on in the house and somebody's home, so to speak. So that's, for example, collecting revenue, just basic receipts, creating an environment where people have an understanding bills are going to be paid.
GONYEA: Mayor Williams also acknowledges Detroit's other problems.
WILLIAMS: There are a lot of racial issues, a lot of alienation from the suburbs, a lot of sense that, you know, the city has kind of been victimized intentionally or unintentionally over years and years and years. Some of that may be true, some of it may not be. I guess the point I'm making is that, you know, we got to kind of like avoid re-litigating the past and look toward the future.
GONYEA: And looking to the future is one thing Detroit is good at, says author Scott Martelle.
MARTELLE: You don't give up. You know, you don't acknowledge weakness. You just keep, you know, soldiering on and on and on. You know, none of you guys from Ohio or Illinois or Florida, you know, can throw rocks at Detroit. That's our job to do.
GONYEA: And speaking for myself as one who proudly wears his beat-up old Detroit Tigers baseball cap all over the country, I can attest to that sentiment. Transcript provided by NPR, Copyright NPR.
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