Detroit in bankruptcy: How did it happen? - Crain's Detroit Business. The city of Detroit, which for years paid its bills with borrowed money, is the largest city in U.S. history to file for bankruptcy protection.
Here's a look at how the city spiraled into financial ruin and why it's in so much trouble: Detroiters struggle to survive without city water. How do you survive without running water for more than two years?
First, get a trash can. Put it under the roof to collect water to flush the toilet. Then, get a bucket and remember what your grandparents taught you in the early 1950s, before indoor plumbing reached all of rural America. “You use your brain. You scramble. Detroit aims to cut unemployment. The Duggan administration’s effort to chip away at unemployment in Detroit and revamp worker training will get a big boost this week with a new study outlining gaps in the ways that the city, workforce training providers and industry leaders prepare Detroiters for jobs.
Journal of Applied Research in Economic Development. City of Detroit Like it or not, the Detroit bankruptcy filing is a page turner.
What insights and lessons might an economic developer glean from it? That is our task in this issue. Since July 18th when the City of Detroit filed for the nation’s largest ever (in terms of debt) municipal bankruptcy, the Curmudgeon has been buried under an avalanche of different ideas explaining how Detroit got into this revolting situation. There have also been a pile of development-revitalization suggestions, as well as blame-placing.
The ever-reticent Krugman, for example, blames job sprawl and suburbs, and a ton of media folk blame the decline on the auto industry or they resuscitate age-old deindustrialization woes. What the Curmudgeon proposes is simply to step back a bit and subject some of these “causes of bankruptcy” to a review. Right off the reader might appreciate the Curmudgeon “take” on the bankruptcy filing. Anatomy of Detroit’s Decline - Interactive Feature. Detroit’s pension problems, in one chart. By Brad Plumer July 19, 2013 The Detroit Free Press has a long, detailed breakdown of Detroit's pension woes.
Here's the key chart: Detroit currently owes $3.5 billion on its pension funds and writes checks to about 21,000 retired city employees and their widows, most of whom get around $1,600 per month. After bankruptcy, few options for Detroit to grow revenue. Slash costs, fix the balance sheet and take money that was once tied to debts and spend it on police, fire and other city services.
That's the premise of Detroit's bankruptcy: short-term pain for long-term benefit, and cuts for Detroit's creditors, but better outcomes for residents. But of the $1.7 billion that Detroit's post-bankruptcy plan is expected to generate, only about $900 million comes from restructuring the city's debts. About $483 million comes from projected new revenues, $358 million from cost savings.
"We don't have $1.7 billion in the bank," said former Detroit emergency manager Kevyn Orr, who led the city through bankruptcy. "We think we've made our estimates reasonable. " Detroit To Officially Exit Historic Bankruptcy. DETROIT, Dec 10 (Reuters) - Detroit will officially exit the biggest-ever U.S. municipal bankruptcy later on Wednesday, officials said, allowing Michigan’s largest city to start a new chapter with a lighter debt load.
The city, which filed for bankruptcy in July 2013, will shed about $7 billion of its $18 billion of debt and obligations. “We’re going to start fresh tomorrow and do the best we can to deliver the kind of services people deserve,” said Mayor Mike Duggan. Once a symbol of U.S. industrial might, Detroit fell on hard times after decades of population loss, rampant debt and financial mismanagement left it struggling to provide basic services to residents. Later on Wednesday, payments to city creditors will be triggered under a debt adjustment plan confirmed by a U.S. Bankruptcy Court judge last month. Most Detroit Families Can't Afford Their Basic Needs: Report.
Two-thirds of Detroiters can’t afford basic needs like housing and health care, even when family members are employed, according to a new report.
On Sunday, the United Way released a study that found 40 percent of Michigan households, and 67 percent of Detroit families, are either under the poverty line or what it identifies as “ALICE” — asset-limited, income-constrained, employed. Yes, Detroit’s poverty rate is 38 percent, but the United Way study looks at the cost of living — factoring in housing, child care, food, transportation and health care — compared to income by county to identify families that are above the federal poverty line but still struggling. “There’s this whole other group of people — could be you or me — (who are) one failed transmission away from going over the cliff to poverty,” Nancy Rosso, executive director of the Livingston County United Way, told the Livingston Daily.
Read the full report here. Most Stressful Jobs Of 2014 10. Why isn't everyone buying cheap houses in Detroit as an investment? - Quora. The Detroit Bankruptcy. The Detroit Bankruptcy The City of Detroit’s bankruptcy was driven by a severe decline in revenues (and, importantly, not an increase in obligations to fund pensions).
Depopulation and long-term unemployment caused Detroit’s property and income tax revenues to plummet. The state of Michigan exacerbated the problems by slashing revenue it shared with the city. DetroitFactSheet 412909 7. The Rise and Fall of Detroit’s Middle Class. In 1973, Ron and Loretta Martin and their three sons moved into the yellow-brick Colonial across the street from my childhood home, on Detroit’s west side.
My father greeted them warmly, despite the fact that most of our neighbors saw them as blockbusters, part of a nefarious conspiracy by civil-rights groups to force integration and break up tight-knit white enclaves. The Martins were one of the first black families on our block. It took a lot of courage to be pioneers, those black families who crossed the city’s racial frontier. And it also took extra money. Black pioneers, as I discovered years later when I wrote a book about Detroit, were usually better off financially than the white people they moved next to.
Ron and Loretta were pioneers in another way. It was not always this way. But by the time the Martins moved in, those blue-collar jobs were disappearing.