what detroit needs is a manufactured hype that the city will recover within a certain amount of years. this will lead to people buying up & rehabilitating buildings and moving in. a new mindset will do the city well.
The city will never regain the population and grandeur it once had. Detroit (the city) has lost around 1 million residents since the 50s. About 30% of residential lots in the city are vacant and a further 10% of existing houses are abandoned. You really have to see it to believe it, there is nothing comparable in the Canadian context. There are literally hundreds of blocks scattered throughout the city with only a handful of houses left. Some are completely cleared.
Where did the houses go?
Most were burned down. Several thousand buildings were burned in the riots of 1967. Devil's night is notorious for massive arson sprees. During the 1980s, around 800 houses were burned each year on Devil's night alone.
The city has also had a long standing program of demolishing vacant homes, which serve as havens for drug addicts and squatters. This is set to accelerate, with over 3000 homes slated for demolition in the next year.
What happened?
Detroit's suffering is due to a confluence of events.
The extensive freeway system built in the 50s and 60s destroyed neighbourhoods and cut them off from each other. But even worse, they paved the way for a massive exodus to the suburbs. This exacerbated white flight, which was further spurred by the riots of 67, busing and the election of Coleman Young as Mayor in the 70s. Mayor Young fanned the flames of racial tension between the white suburbs and black city. The end result is that by the 80s, many neighbourhoods in Detroit were nearly 100% black. The city has obviously suffered severe economic decline with the collapse of North American manufacturing and the decline of the American auto industry. The city became very poor and crime ridden, which is now what Detroit is most well known for. The bad reputation made Detroit even less desirable to businesses and residents. By the 90s, middle class blacks were fleeing the city if they could afford it, leaving the city even more impoverished. The huge losses to its tax base, coupled with rampant political corruption and incompetent municipal government, left the city's finances in shambles. They city simply cannot afford to maintain its infrastructure, leading to a downward spiral of inadequate municipal services that made the city even more undesirable. Further population losses resulted from changes to social assistance. In the past, welfare was focused on sustaining poor mothers in a limited lifestyle. By the 90s, the focus changed to moving people off welfare and into the workforce. Since there are no jobs in Detroit, many who were previously subsisting on welfare were forced to move, basically abandoning unsellable homes.
So Detroit's downward spiral is due to a complex mix of economic woes, racial tension and politics, unanticipated consequences of social programs, corruption, incompetence, deindustrialization and suburbanization.
But I must say, considering the mess Detroit is in, the downtown area is doing relatively okay.