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This chapter examines the historical, economic, social, demographic, racial, and non-cooperative relationship between the State of Michigan and the City of Detroit that led to the bankruptcy decision. There is evidence that the seeds of Detroit’s bankruptcy were planted by the actions of investors, who reduced their investments in the city and increased investment in the suburbs over a period of 60 years. This resulted in increased unemployment, the outmigration of the white middle class, a decline in property values, increased housing abandonment, and reduced tax revenue for city services. This chapter shows that although Detroit has been experiencing severe economic decline since the 1950s, State of Michigan policies on the eve of bankruptcy were more concerned about the cost of assisting the city financially and regarded the problem as being due to the city’s fiscal mismanagement. Throughout Detroit’s history, the State of Michigan has played an active role in influencing the city’s social and economic decline, its financial problems, and its ultimate bankruptcy. Instead of elected officials of Detroit or the residents of the city, it was an Emergency Manager under the direction of a Republican Governor who made the decision who decided to place the city into bankruptcy.
This chapter examines the underrepresentation of Black and Hispanic-owned businesses in Metropolitan Detroit, where the central city is majority Black. It focuses on Black, Hispanic, and non-Hispanic white-owned businesses with paid employees instead of focusing on business ownership in which these three groups were sole proprietors. Businesses with paid employees are usually large firms that have an impact on employment because they have jobs in which the population in the City of Detroit are employed. The data were obtained from Crain’s Detroit Business database, the Survey of Business Owners, and the United States Small Business Administration Paycheck Protection Program Report. The results were that, after bankruptcy, Black and Hispanic-owned businesses were still extremely underrepresented, due in part to unequal access to capital and systemic racial discrimination.
This chapter summarizes the evidence given in the previous nine chapters: (1) changes in trends toward an inclusive city; (2) whether more racial equality occurred after bankruptcy; and (3) whether the data and analyses answered the question of whether Detroit met its overall objective of becoming a more racially inclusive city after bankruptcy. The answers were derived from examining gentrification, crime types by neighborhoods, racial differences in academic achievement by race, racial differences in white, Black, and Hispanic business ownership, and racial inequality after bankruptcy, especially in terms of homeownership. Most data were obtained from the United States Bureau of the Census 2011–15 and 2016–20 Five-Year Estimates databases; Crain’s Detroit Business Directory; the City of Detroit Open Data Portal’s Crime Incident Data; and Stanford University’s Opportunity Achievement file. The methods used to analyze the data were the Darden-Kamel Composite Socioeconomic Index and the index of dissimilarity.
Detroit is the first city of its size to become bankrupt and some policy makers have argued that, since then, it has entered a ‘new beginning’. This book critically examines the evidence for and against this claim.
Joe Darden analyses whether Detroit’s patterns of race and class neighborhood inequality have persisted or whether investments have led to improvements in academic achievement, homeownership, employment, and reductions in poverty and violent crime. He measures, quantitatively, the benefits and disadvantages of staying in urban Detroit or moving to the suburbs, and provides evidence to answer whether Detroit, after bankruptcy, is becoming an inclusive city.
This chapter examines: (1) the legal origin of the City of Detroit’s bankruptcy; (2) the summary of oral opinion and reasons why the decision was made for bankruptcy by Judge Steven Rhodes; (3) the demographic characteristics of the decision makers; and (4) the demographic characteristics of the creditors and of winners and losers resulting from the Plan of Adjustment. The legal origin of the bankruptcy can be traced back to 1937 when Congress enacted new municipal bankruptcy provisions to the 1934 Bankruptcy Act, which added a new Chapter IX to the Bankruptcy Act. The Plan provided for the adjustment of up to as much as $18 billion in secured and unsecured debt, and offered the greatest possible recoveries for the city’s creditors, while simultaneously allowing for meaningful and necessary investment in the city.
This chapter defines gentrification as a process that results in a change in the entire neighborhood from very low and low socioeconomic characteristics to at least middle, high, or very high socioeconomic characteristics. It also determines the location of the neighborhoods where gentrification occurred using geographic information system (GIS) techniques to map the location. The final three objectives are connected as follows: to determine whether gentrification resulted in an increase in the white population; to determine whether the white population and the Black population are less residentially segregated in the gentrified census tracts than they were before the tracts became gentrified; and to determine whether the City of Detroit’s Private-Public model for economic development leading to gentrification has provided useful assistance to neighborhood residents in their efforts to negotiate with developers in their neighborhoods through the process of “community benefits agreements.”
This chapter examines the social and spatial structure of the Detroit Metropolitan Area postbankruptcy. It also examines racial residential segregation through socioeconomic neighborhood characteristics. Data came from the US Bureau of the Census 2011–2015 and 2016–2020 Five Year Estimates databases. The Darden-Kamel Composite Socioeconomic Index was used to analyze Metropolitan Detroit by neighborhoods in order to determine the extent of class inequality, and the index of dissimilarity was used to determine the extent of racial residential segregation and socioeconomic neighborhood inequality by race. The inequality gap increased between the 2011–15 and 2016–20 censuses. This inequality has negatively impacted Black and Hispanic residents who disproportionately reside in neighborhoods of very low and low socioeconomic characteristics. Most whites, on the other hand, reside in neighborhoods with high and very high socioeconomic characteristics.
The objective of this chapter is to determine whether Black and Hispanic students receive an equal education to white students in Detroit after bankruptcy. Data were obtained from The Educational Opportunity Project at Stanford University. After bankruptcy, white students continued to attend districts that are ranked higher in test scores and resources received from the State of Michigan than those attended by Black and Hispanic students. Students must attend school in the district in which they live and, compared to Black and Hispanic students, white students live in neighborhoods with school districts that are higher in socioeconomic characteristics. In Metropolitan Detroit, students are racially segregated in separate and unequal schools and neighborhoods related to academic achievement.
This chapter provides data and analysis to show that racial and class inequality increased after bankruptcy in the Detroit Metropolitan Area. This inequality varied among five types of neighborhoods based on socioeconomic characteristics, and between the City of Detroit and the suburbs. Most of the data on inequality were obtained from the US Bureau of the Census 2015 and 2020 American Community Survey, and the federal Home Mortgage Disclosure Act. The results revealed that barriers remain to Black and Hispanic home seekers. Both groups continue to be more likely to have their mortgage loan applications denied than their non-Hispanic white counterparts. There was racial inequality among the following socioeconomic variables: percentage in poverty, median household income, educational attainment, occupational status, and homeownership. Inequality was greatest between Blacks and non-Hispanic whites.
This chapter argues that place matters in understanding why crimes occur in some neighborhoods more than others. Based on the theoretical concept of neighborhood effects, crimes are directly related to neighborhood characteristics where residents in concentrated poverty reside. Data were obtained from the City of Detroit Open Data Portal Datasets on crimes for 2015 and 2020 to see if crime rates changed after bankruptcy ended. This chapter uses the Darden-Kamel Composite Socioeconomic Index method to analyze the data. The highest crime rates occurred in two types of neighborhoods: very low socioeconomic characteristic neighborhoods and low socioeconomic characteristic neighborhoods. However, the data show that crimes after bankruptcy decreased in the City of Detroit in most neighborhoods.
