Detroit had been in decline since it was rocked by race riots in 1967. Since then, there has been a real drop-off in investment and economic development in the city. Like a lot of other cities in the American northeast and Midwest, it was badly affected when factories moved south or out of the country, but was harder hit because it was a one-industry city. Most big cities have more than one industry, but Detroit’s economy was completely centered on the automobile. When the Recession hit, Detroit dealt a major blow along on top of the corruption and mismanagement.
Many areas of Detroit became abandoned by residents after business and companies left. Detroit’s abandoned buildings have become dangerous and a real eye sore. Detroit and many parts of Michigan experienced much more than Recession, it was more like a Great Depression for them. This was by far the largest municipal bankruptcy filing in United States history recording an estimated 20 billion dollars. According to Detroit News, “Detroit was the most impoverished major city in America with 39. 3 percent living below a poverty line of $24,008 for a family of four.
But Flint topped the list of Michigan’s poorest cities with 40. 1 percent of residents living in poverty. ” The poverty rates are incredibly high, residents in Detroit are struggling to preserve their homes and the overall safety of the community is terrible. A history like this can have a terrible outcome for future Detroit. We all hope to see Detroit rise again. In the previous paragraph we discussed the impact of bankruptcy but however there was a time Detroit was greatest city on earth. Detroit with its auto manufacturing background was hit very hard during the economic downturn of our country.
City planners intend to breathe new life into what many consider a dying city. Many people see Detroit as a dying city and people have lost vision for potential growth. Renewal of the city will bring back the glory to the beautiful city with its amazing cultural heritage, providing new small businesses with opportunities to help the city grow and rebuild neighborhood communities. Using Bond money, $185-million dollar projects are being started to help Detroit’s streetlight system. Installation has already been 80% completed. More than 56,000 new LED lights of a planned 65,000 lights are already installed. Many Residents are happy.
The city has responded to the people by lighting mostly neighborhoods and school areas. More than 7,000 homes have been torn down and replaced. The city destroys about 100-150 houses a week. This also creates jobs for the people as well. The city has added 80 new buses funded by the federal government, for the first time in 20 years, the city posted bus schedule. The city also has hired additional drivers. People are happy with the city’s buses are far more reliable now. Detroit’s unreliable garbage collection also had a boost.
The city has contracted with “Rizzo Environmental Services and Advanced Disposal. People are happy that reliable pickup was restored. The Major’s administration has devoted 40 Department of Public Works employees to help with illegal dumping. The crews average about 650 tons of illegal trash dumped a week. The city has also launched four new mobile applications to help people with reporting problems to the city and help connect the Police Department, monitor buses and paying for parking at meters. The city has also created a volunteer program with churches, community organizations and others to clean up parks. Also doubted up with workers to keep parks clean.
This is great because even with budget cuts, parks still running better than before. Ways to make Detroit better is to have a settlement agreement with the banks. Lenders are also responsible for the problems in Detroit. Banks gave loans to business that had a high risk of failing. Detroit should help pay for its comeback. Banks are discriminating against Detroit due to their past mistakes. A settlement with local banks could help hundreds of millions of dollars go around. Detroit business can prove that billions in lost property values and millions in property tax due to the actions of banks.
Then they can use the cash for comeback programs. Detroit is so far in debt, it needs a way to restart the city’s economy, which could be done if large corporations come to Detroit and start opening factories, which can produce jobs and help the city. The best way to do this would be to take advantage of the fact that Detroit has a large number of abandoned buildings. Detroit could use this to its advantage. Detroit can drop some of the expenses that normally occur when trying to build a factory and make it less expensive than building overseas companies.
In the previous paragraph we discussed Detroit’s Heyday now we discuss the beginning of Detroit decline where everything turns for the worst. Over the years, declaring bankruptcy has become incredibly simple. Because of this change, the number of people declaring bankruptcy has elevated to new levels. Today, bankruptcy is a common thing among companies and individuals. The American bankruptcy laws allow people to avoid paying their debts by offering the debtors a discharge without a very harsh consequence. The city of Detroit, Michigan filed for Chapter 9 bankruptcy.
One of the purposes of chapter 9 is to provide a financially-distressed municipality protection from its creditors while it develops and negotiates a plan for adjusting its debts. Chapter 9 is significantly different in that there is no provision in the law for liquidation of the assets. Detroit was once the leader in workers pursuing the American dream. At the early 1900’s an inventor named Henry Ford brought mass production of the automobile to this area, turning Detroit into a powerhouse of opportunity and economic success for many.
This Automotive Industry has been controlled by Detroit’s economy for many decades. Detroit declared bankruptcy in July 2013 and said they were in debt for about $18. 5 billion which they had accrued in past two decades. The city’s finances were bad since the 1950 due to the race riots and fights. The city debt stared to get worse in the 1990, that’s when officials realized things were getting bad but didn’t make the right decisions. Mayor Kwame Kilpatrick, who resigned as major after being convicted of 24 felony counts. He was also sentenced to four months in jail after pleading guilty.
Also, there was a loan for 1. 4 billion intended to fix up the pension system and stabilize interest rates. Then Detroit’s credit rating went down which lead to change loan terms and stuck down Detroit’s credit rating. There are many reasons why Detroit failed one is that the population collapsed in the past decades. Detroit at one time was the four largest city in 1950 with 1. 8 million people. In the 2010 census, the city had fewer than 700,000 residents. Detroit has the highest unemployment rate of any major city in the nation.
This is both a cause and effect of the population situation. With few jobs, so people go elsewhere. The high cost of the city’s government drivers, employers away and make other people less willing to relocate there. Other big reason us that Detroit has 18 billion in general obligation debt. A lot of the debt is due to the result of public pensions. Detroit has about 3 billion in unfunded pension liabilities. The city was buried in pension cost because it had too many public workers. Even though Detroit’s populations had cut down its public sector just kept growing.
In 2011, the city had more than 12,000 employees more than other comparably sized city in the country according to The Detroit News. There was also a lot of corruption going on Former mayor Kwame Kilpatrick, a Democrat, was convicted in March of 24 federal felony offenses, including mail fraud, wire fraud, tax evasion, racketeering and extortion. Prosecutors said he gave out jobs to friends and family, wasted city tax dollars on fraudulent contracts and pocketed more than $1 million in illegal kickbacks. Also the crime was going up and the police had no way to respond.
Much of the city’s financial trouble was due to the public pension to pay for retired teachers, city employees, cops and firefighters. The average response time for an emergency call was 58 minutes. All these actions have had many negative effects on the citizens of Detroit. Now I will discuss how Detroit has improved over the years and how it can go back to being the great city it once was. Detroit with its auto manufacturing background was hit very hard during the economic downturn of our country. City planners intend to breathe new life into what many consider a dying city.
Many people see Detroit as a dying city and people have lost vision for potential growth. Renewal of the city will bring back the glory to the beautiful city with its amazing cultural heritage, providing new small businesses with opportunities to help the city grow and rebuild neighborhood communities. Using Bond money, $185-million dollar projects are being started to help Detroit’s streetlight system. Installation has already been 80% completed. More than 56,000 new LED lights of a planned 65,000 lights are already installed. Many Residents are happy.
The city has responded to the people by lighting mostly neighborhoods and school areas. More than 7,000 homes have been torn down and replaced. The city destroys about 100-150 houses a week. This also creates jobs for the people as well. The city has added 80 new buses funded by the federal government, for the first time in 20 years, the city posted bus schedule. The city also has hired additional drivers. People are happy with the city’s buses are far more reliable now. Detroit’s unreliable garbage collection also had a boost. The city has contracted with “Rizzo Environmental Services and Advanced Disposal.
People are happy that reliable pickup was restored. The Major’s administration has devoted 40 Department of Public Works employees to help with illegal dumping. The crews average about 650 tons of illegal trash dumped a week. The city has also launched four new mobile applications to help people with reporting problems to the city and help connect the Police Department, monitor buses and paying for parking at meters. The city has also created a volunteer program with churches, community organizations and others to clean up parks. Also doubted up with workers to keep parks clean.
This is great because even with budget cuts, parks still running better than before. Better ways to make Detroit better is to have a settlement agreement with the banks. Lenders are also responsible for the problems in Detroit. Banks gave loans to business that had a high risk of failing. Detroit should help pay for its comeback. Banks are discriminating against Detroit due to their past mistakes. A settlement with local banks could help hundreds of millions of dollars go around. Detroit business can prove that billions in lost property values and millions in property tax due to the actions of banks.
Then they can use the cash for comeback programs. Detroit is so far in debt, it needs a way to restart the city’s economy, which could be done if large corporations come to Detroit and start opening factories, which can produce jobs and help the city. The best way to do this would be to take advantage of the fact that Detroit has a large number of abandoned buildings. Detroit could use this to its advantage. Detroit can drop some of the expenses that normally occur when trying to build a factory and make it less expensive than building overseas companies.
