Monday, July 22, 2013

Detroit's demise, my take and how it could come back.

Ever since the City of Detroit filed for bankruptcy last week, there has been incessant debate as to why Detroit has floundered while some other rust belt cities flourished. People have pointed to the collapse of the auto industry (corporate bailouts of GM, Ford, and Chrysler), while others blamed the white flight and municipal corruption. Some folks have looked to Pittsburgh and pointed out the factors that make that city more successful. Some of it is factual, while some of it is rather mythical. I'm going to focus on the facts as well as on some of the myths.

Pittsburgh does have a diverse economy around its education and healthcare sectors as well as financial and recently natural gas and utilities. In my opinion, "eds and meds," and financial institutions have always been part of Pittsburgh's economy. UPMC, Carnegie-Mellon University, et al. did not just pop up over the last few decades. These sectors were just decimated by the presence of the steel industry. As the steel mills closed beginning in the 1970s and the city's (and region's) population plummeted, the city looked to reinvent itself around its universities and hospitals, which were already top-notch. CMU played a major role in landing a large Google office. UPMC is now the largest regional employer, and the University of Pittsburgh itself is very well-noted for its medical programs.

Yes, both Pittsburgh and Detroit peaked in population in 1950. I believe this was due to the exodus of the middle class out to the suburbs. Just about every larger city experienced this. From 1950 to 1970, Pittsburgh shed about 150,000 residents, but I think the bottom really fell out from 1970 to 2000. The steel mills began closing in the 1970s, and the plant shut-downs kicked into high gear in the 1980s. Greater Pittsburgh's population peaked in 1970 at roughly 2.7 million people. Today, it's around 2.35 million and showing signs of marginal growth.

Those are just some of the facts I recall learning when I took a US history course in college. I did address some myths with the discussion of the brief history above. I think the following myth is the biggest one that I think needs to be addressed.

"Geography played a role in the amount of sprawl. Pittsburgh's hilly terrain prevented sprawl from taking place, while Detroit is table-top flat, allowing for sprawl to spread out everywhere."

After World War Two, people started settling down to start families. At the same time, they were buying up land away from the urban centers. With the passing of the Federal Highways Act of 1956, which gave birth to our interstate highway system, urban living became less desirable, and more people began the exodus from the cities. Every major city has experienced some degree of sprawl regardless of geographical features. The Northeast Corridor is sprawl central. I'm sure Levittown, New York, and Valley Forge/King of Prussia, PA come to mind. King of Prussia is a very high growth area that is still getting larger.

Granted, those are all locations located along the heavily populated Mid-Atlantic region, which is mostly coastal plain. What about Atlanta, Los Angeles, or San Francisco? These locations also have a sprawl issue. Yet, their downtowns are still growing and are still vital in the overall health of the metropolitan area. Granted, they also contain large corporate offices or headquarters.

Here's my take

I think Detroit over the years has essentially dug its own grave. They have not set forth any policies to encourage growth. Jobs and businesses apparently continue to flee downtown, and middle and upper class residents continue to flock to the suburbs leaving the lower class in their wake. What does Detroit have that could be used as a strength to encourage growth? Who are the largest remaining employers, and do they have what it takes to spark some kind of turnaround?

To go back to the Pittsburgh vs. Detroit part of this discussion, what about education? There are colleges and universities nearby. Suppose they could establish a partnership with the private sector to spur job growth and development. Carnegie-Mellon used its computers and technologies connections to not only land Google, but they also assist with the growth and development of other small businesses. I don't know too much about the universities in greater Detroit or Michigan for that matter,  but they have to have some strength that they could put forward to land companies in the specialties they teach.

What happened to Detroit is a shame, and I hope the city can make a full recovery. The city needs to find its strengths, however hidden they may be, and build upon them. Pittsburgh's strengths have been in the eds and meds as well as the steel industry, but as I said earlier the eds and meds were not truly realized until after the industry collapsed.

Whatever strengths are uncovered, they have to be developed in the most sustainable manner possible. They need to build their assets that will benefit the community and its residents long term. For example, Google has transformed the eastern neighborhoods of Pittsburgh. That area for several decades was struggling, and now it is a hot bed for urban development.

To read a recent article comparing Detroit and Pittsburgh (and where I picked up some of my information), click here.