Detroit will not prosper without reversing population drain

Phil Power is founder and chairman of the Center for Michigan.

Well, well. Kevyn Orr is now firmly in the saddle as Detroit’s emergency manager. Mike Duggan’s campaign for mayor has evaporated, leaving Wayne County Sheriff Benny Napoleon in the driver’s seat. And Bob Ficano, the current Wayne County executive, is teetering on the brink of political extinction, trouble with the law – or both.

So where does all this leave folks like me who believe Michigan’s prosperity is deeply tied up with the future of our state’s two largest units of local government?

First, my impression is that Orr is doing a terrific job, and in the process has provided some real credibility to the entire emergency manager system adopted by the state.

He’s protected his back by reaching out to Mayor Dave Bing and the Detroit City Council, keeping them on the payroll. He finally appears to be bringing accounting clarity to Detroit’s famously opaque books. And he is aggressively making the argument to bondholders that it would be best to cut a deal with him rather than risk an unknown but all-powerful federal bankruptcy judge.

In other words, he’s offering bondholders a “haircut” in the form of a buzz cut rather than a potential total head-shaving. Of course, nobody has any idea how things will turn out, especially since the public employee unions are foaming at the mouth over proposed cuts in pensions and health care, let alone wages and work rules.

The public relations battle to frame the terms of the war is already beginning to take shape. Orr and much of the Detroit media are in the process of setting the stage as a conflict between the unions representing the 30,000 current and retired city employees and the 713,000 city residents the census found in 2010, a figure that has likely shrunk some, according to Data Driven Detroit.

If that’s the way most people see it, the unions will wind up on the very short end of the public opinion stick, and could face a hostile political environment far different from the one they are used to.

Second, it may be that some combination of haircuts to reduce unfunded debt and a complete restructuring of Detroit’s operations may result in a financially sustainable city over the long run. But the real question is what kind of city will it be? As the Bible teaches, you cannot live by bread alone. For Detroit to prosper in the future it must have both some kind of soul and some distinctive features that can attract people and their families to live in the city.

By now, it is pretty clear that a major – perhaps the main – factor in the city’s demise is long-term population decline. The U.S. Census shows the city lost more than 25 percent of its population from 2000 to 2010. Nobody seems to have hard data about what kinds of people who have left the city. Even ace demographer Kurt Metzger, who runs Data Driven Detroit, says that’s hard to pin down.

But most people I talk with say many of those who have left are educated and employed families with children – driven out by a combination of unsafe streets, unsteady city services and under-performing schools.

No doubt, there is real energy and optimism about Detroit’s Midtown neighborhood, near Wayne State University. Young, energetic and talented people are moving in, attracted by the terrific combination of low (but rising) housing costs and the prospect of remaking an entire city. Entrepreneurs like Dan Gilbert are slicing and dicing Detroit real estate like a Monopoly board.

Problem is, many of those young people may be living in Detroit but (as Bridge Magazine recently discovered) registered to vote in the suburbs. Why? Having an official Detroit address can mean you’ll pay thousands more in car insurance costs per year.

In other aging cities, the prospect of financial and political breakdown usually produces reform movements of various sorts, often led by exactly such young people. But if they don’t (or won’t) vote in Detroit, who’s going to manage the wholesale change in Detroit’s famously dysfunctional political culture that is needed to manage the long-run task of building a dynamic and exciting city?

The demographers say that history is to a large degree determined by demography. That means that even if Kevyn Orr is beyond successful financially, the future of the city is beyond dire … unless we all can figure out a way to re-energize and re-engage Detroit’s long-suffering residents and attract newcomers.

The ones, that is, who are willing to help build a political culture that can manage the long and difficult task of reconstruction.

Editor’s note: Former newspaper publisher and University of Michigan Regent Phil Power is a longtime observer of Michigan politics and economics. He is also the founder and chairman of the Center for Michigan, a nonprofit, bipartisan centrist think–and–do tank, designed to cure Michigan’s dysfunctional political culture; the Center also publishes Bridge Magazine. The opinions expressed here are Power’s own and do not represent the official views of the Center. He welcomes your comments via email.