Academic journal article The Journal of Law in Society

Depopulating Cities and Chronic Fiscal Stress: The Detroit Story

Academic journal article The Journal of Law in Society

Depopulating Cities and Chronic Fiscal Stress: The Detroit Story

Article excerpt

Table of Contents  I.   INTRODUCTION II.  BACKGROUND: THE DYNAMICS OF CITY FISCAL HISTORY III. METHODOLOGY: BUILDING AND USING A CONCEPTUAL      FRAMEWORK IV.  ANALYSIS: CHRONIC FISCAL STRESS IN THE MOTOR CITY      A. City Services and Operations (1938-2010)      B. Revenues      C. Expenditures      D. Spending Trends      E. A History of Fiscal Crisis      F. City Spending Adjustments V.   CONCLUSION 


Since World War II, there have been several episodes of urban fiscal stress as cities faced a struggle to balance revenues, spending, and service provision. (2) In one context, these fiscal struggles were related to state and national economic cycles. Revenues corresponded to economic activity and fell during recessions, forcing shifts in taxes or spending. However, beyond these cyclical events, structural causes of fiscal stress have also persisted for many American cities. Structural causes of fiscal stress may be related to population loss or changes in the makeup of the population, state and federal policy, and other factors that persist beyond economic cycles. These structural problems are likely to show up as the long run elimination of capital maintenance, run-up in debt levels, major increases in tax burdens, downsizing of certain services, and other strategies, regardless of economic cycles. (3) This paper, as part of a larger research project, seeks to identify these trends and explore the research question of how depopulating cities respond to chronic fiscal stress. A study of Detroit, MI from 1938 through 2010 will be used to highlight and analyze these issues.

The city of Detroit, Michigan was in many ways one of the great boomtowns in American history. Starting in the early 20th century, the city's population and economic growth accelerated at an incredible pace, along with the growth of the automobile industry and heavy manufacturing in the industrial Midwest.

This meteoric rise was met with an equally precipitous fall as the domestic auto industry faced new competition and changing technology in the 1960s. In many ways, the peak of Detroit occurred in the 1940s as the arsenal of Democracy. Since the 1950s, the population and wealth of the city has declined every decade. The population peaked at 1.8 million and has fallen to 775,000 in 2010. (4) For many across the globe, Detroit now represents the final stages of decay of a once great industrial city.

The city of Detroit was originally formed in 1815. (5) However, unlike some if its peers such as Chicago or St. Louis, Detroit's growth did not take off until the early 20th century and the formation of the domestic automobile industry. For example, Chicago's population grew tremendously between 1860 and 1890 from 100,000 to over 1,000,000. (6) At that time, Detroit was growing slowly and was not even in the top ten cities. Based on historical sources, an analysis of Census data from the United States, Chicago was one of the fastest growing cities in the country in the 19th century. (7)

The city of Detroit first entered the top ten largest American cities in 1910. (8) At that time, the automobile industry, particularly driven by Henry Ford and other entrepreneurs, was beginning to take off. In many ways, Detroit was the Silicon Valley of the early 20th century. The auto industry came about because of the concentration of horse-and-buggy and carriage makers in the southeast Michigan area. Henry Ford, who originally worked in the carriage industry, eventually became the first major producer of cars in the United States and centered his company in Detroit and nearby Dearborn. (9)

In 1910, as America's ninth largest city, Detroit's population was at 450,000. (10) By 1920, the city had shot up to fourth place and had grown to 993,000. (11) The need for labor in the auto industry drove this population surge. In fact, the auto industry was the largest economic sector in the country in the 1920s. …

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