In 2013, Detroit became the largest city in the United States to file for bankruptcy protection. Now, a decade after this extraordinary move, Detroit businesspeople and locals are still living with the aftereffects.
While many analysts have pointed out that Detroit seems to be on its way back up, with businesses investing in the city’s downtown area, lower-income residents have claimed that they’ve struggled the most throughout these difficult last 10 years.
Why Detroit Filed for Bankruptcy
In 2013, Detroit was in debt by the billions. The city’s finances were a mess, as reporting had revealed that officials had mismanaged money for decades. Detroit had also seen a great population decline, which didn’t help bring money back into the struggling city.
Thus, the city filed for bankruptcy protection, which eventually led to Detroit being able to get rid of about $7 billion in debt. The city council and the city’s mayor worked to produce balanced budgets for its citizens three times in a row.
Now, the city’s finances seem to be back in order. Current Detroit Mayor Mike Duggan even claimed that the city doesn’t need any federal relief funds to help solve deficits.
During these past 10 years, more businesspeople and investors took a chance on Detroit — most notably, on downtown Detroit. For decades, the downtown area of this large city was largely boarded up. Businesses didn’t want to invest in this region.
However, once Detroit filed for bankruptcy, more investors felt willing to put money into the city. This resulted in downtown Detroit being cleaned up. Many of these previously boarded-up buildings were demolished or refurbished into trendy apartments and restaurants.
Some Detroit Locals Are Still Hurting
Detroit’s bankruptcy move had helped the city out in many ways. Duggan has explained that, with their balanced budgets, Detroit now has the opportunities to build more parks, more options for affordable housing, and to help out residents around the city.
Businesspeople who have flocked to invest in the city are also looking to continue to attract more money — and new talent — into Detroit.
However, while some areas of Detroit have noticeably flourished, reporting has also pointed out that many locals of this large city are still struggling. In many ways, these residents may have struggled the most during the last 10 years after Detroit filed for bankruptcy protection.
Even after a decade of notable work by city officials, Detroit still has high poverty rates. Many locals still report a low income, further highlighting the deep disparity seen between the now trendy downtown area and other impoverished communities in the city. Violent crime also remains a huge issue for these locals.
Many city government retirees also had their pensions cut during the bankruptcy filing. This resulted in the city’s bankruptcy attorneys demanding retirees pay thousands of dollars back in excessive interest payments.
For many Detroit retirees, this has been crushing. Various seniors have had to return to work, as their cut pensions didn’t allow them to stay retired.
Lower-income residents have also explained that this bankruptcy filing has made it harder for them to live in Detroit, especially as this income disparity has grown.
One resident, Duane Johnson, said, “It’s like a curse. Rent goes up. They are developing those new apartments or rehabbing that new house for people who make a higher income. And with that, it’s pushing people out.”
