the incline
Detroit, Michigan, created in 1701, it was a large trading post for merchants to barter their commodities to each other in a civilized, organized manner. Centered between the five great lakes, Detroit was set up from conception for a large volume of import and export, having direct ties to the oceans through Lake Erie’s path to the St. Lawrence River. The city demonstrated this with the spark of the automotive industry in the early 1900’s. Henry Ford, a Wayne County resident, invented the first production automobile, the Model T. This would head the boom of the automotive era, choosing Detroit as its home. With this incline, Detroit’s population of job seeking individuals grew exponentially to 1.85 million (Dewar, 2016). These workers needed somewhere to live, and Detroit’s most empty border lands would be a perfect place for these homes. Thousands of new homes were built for its just over a million residents in the span of just a few decades. In pair with these homes the newly established automotive giants built their factories close to these neighborhoods for a short commute for their workers. Things were looking good for Detroit.
the decline
At the peak of the automotive era, three main automotive companies controlled the business space in Detroit. Ford, GM, and Chrysler were the rising companies that founded their roots and production facilities here. With Ford and GM leading the space, Ford’s goal was to surpass GM’s 9.10 million production units in 1999 to 2005, by pushing their production lines to produce 9.15 million units (“Learning from the Slums for the Development of Emerging Cities”, Paredes et. al). From the same author, Toyota, a Japan based company, produced just under 6 million production units in the same time span. This Detroit-local production would not prove its stability as automotive makers would develop cost-effective business models that would better suit internationally, such as Japan or Germany. These new business models would indicate the spark of the decline of the automotive sector in Detroit. Transitioning into the 2008 recession, millions of workers were starting to lose their incomes, and their mortgage payments would inevitably start to creep up on them. Homeowners were advised by financial advisors to refinance their homes with a goal to extract equity. These mortgages would have outrageous interest rates, making the average Detroit residence’s salary of $28,000 (Karlinsky, 2017) unsustainable as payment for these loans. With this, average residential housing sales prices in Detroit fell from $57,000 to about $7000 between 2006 and 2010 (Hodge et al., 2014). Some homes were even being sold for just $10.
what can be done?
The only permanent solution for the city of Detroit is to demolish these dilapidated homes, and rebuild or repurpose the vacant lots. They cities government tried to create HPTAP (Homeowners Property Tax Assistance Program) which would attempt to help these homeowners but this would prove to not be a viable solution. According to University of Michigan in reference to this program, “... just a fraction of those eligible applied for this exemption that could have prevented foreclosure.” In similar situations as Detroit’s, “...using data on 6000 demolitions, concluding that the demolitions generated a $22.6 million net benefit” (Paredes et. al, 2017). Even though total demolition is not cost effective in the short term, if the vacant lots are properly repurposed, such as new homes or even turned into industrial properties, the profit from industrial revenue or new property taxes will rectify any debt the city will incur during the demolition process.
Personal testimony
Being born and raised in this area, I have experienced the detriment of these neighborhoods first hand. The neighborhood I personally lived in was lucky enough to not experience such a decline in quality of life; however, just going out to the store, or going into Detroit for whatever reason would put myself in this environment. These places are unsafe for people like me, but even more unsafe for those who have to live in these conditions. Going through grade school, I knew many children who lived in homes like these, and were not able to buy their own lunch or their own school supplies. It really was sad to see this, especially when government officials are siphoning money into their own pockets for personal gain.
