Detroit: When you've hit bottom, the only way is up

Much ink has been spilled over the economic destruction of Detroit. But a new report suggests that the city has already hit bottom -- and is in the midst of a tremendous turnaround.

Much ink has been spilled in recent years over the economic collapse of Detroit.

As American automakers lost market share and shed jobs, the city slowly lost its tax base. And when the global economic downturn struck three years ago, it pulled the rug out from under a tremendous number of over-leveraged Americans -- including many in a city already sliding.

So what's a city to do when its primary industry is a shadow of its former self? Shrink. Already, the city has lost 25 percent of its population in the last decade. It's not the scale of that reduction that's surprising; it's the speed at which it occurred. A city just can't be expected to diversify its economy that quickly. A lack of jobs begets a lack of people, and that's part of why there are tens of thousands of empty houses in Detroit, exposed to vandalism and crime and everything a city does not want.

The problem? The city remains the same physical size. As its residents (and their tax dollars) left in droves, city officials faced maintaining roads, street lights and trash collection in a sprawling city built for a population of two million. (Today, there are 714,000 residents.) That's a tough economic card to draw.

This is hardly news in 2011. But a recent report in The Economist suggests that the city may have hit bottom -- meaning the only way to go from here is up, up, up.

The editors write:

Yet despite all the gloom, there is a bit of a sense that things might just be starting to turn, and the reason is simple: Detroit is now incredibly cheap. And that has drawn some admittedly rather pioneering types back into town.

A city's decline can result in two fates: a complete collapse and abandonment, or a sudden abundance of opportunity. For a city as popular and grand and noble as Detroit, it's the latter.

The sudden influx of entrepreneurial types as ushered in a rash of new ideas, from the construction of a dense urban core (appropriately, Detroit is known for being car-, not foot-, friendly) to a new light-rail line along Woodward Avenue called the M1, with organizations of all kinds working to stoke the business flames of a reborn city, from restaurants to real estate.

"For the first time in decades, there are a few green shoots in Detroit’s grim streets," the editors write. Soon, Detroit will stand for development, not dereliction.

The parable of Detroit: So cheap, there’s hope [Economist]

Photo: Lauren T./Flickr

This post was originally published on Smartplanet.com

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