What can we expect from Detroit’s “rebirth”?

Larry You

In July 2013, the city of Detroit, next door neighbor to Windsor, Ontario - filed for bankruptcy, which made a new record for municipal bankruptcy in the US history. I believe some of you know the reasons behind this historic bankruptcy - fiscal problems.

Due to the contraction of the auto-manufacturing industry, which was once Detroit’s pillar industry, the population of the city declined rapidly since 2008 to 2013. Detroit’s $18 billion debit made it impossible for the city to handle these debts with few assets, but to file for bankruptcy. Eight years later, we can’t help but wonder if this city is still struggling from its previous bankruptcy or is the economy recovering or even climbing up. We will also see how Windsor, coped with the cross-border impact and the new connection between these two cities.

In recent years, the rebirth of Detroit has been obvious as Detroit has become the “comeback city” in America. Thanks to the partnership between city and state government, business leaders, and philanthropic community, the city’s $19 billion debt was restructured by these significant efforts.

In addition, private sector investments played an important role in Detroit’s revitalization. Significant investment capital added more business in the downtown Detroit business and entertainment area, which not only attracted more new residents but also gave more reasons for old locals to come back. Let’s take a closer look at the example of JP Morgan Chase’s commitment of $150 million to Detroit’s rebirth in 2019. An uninhabitable 56-unit building on Alexandrine Street with only 35 percent occupancy was renovated with a $6 million investment from JPMorgan Chase. Now the building is already close to full occupancy, with a skylight sending light into the lobby. Future predictions show that Detroit is moving forward as the economy that evolves. From the data from Forbes, “Detroit’s unemployment rate dropped to 5.3 percent in 2016, down from a high of 19 percent. The poverty rate is now 13.4 percent, a full point below the national average” (The JPMorgan Chase & Co.Voice Team).

Meanwhile, the city of Windsor, Ontario, which is across the river from Detroit, was was historically dependent on automotive manufacturing. Although Windsor did not suffer too many side effects from Detroit’s bankruptcy, Windsor should accelerate its economic transition to pursue long-term growth instead of relying on the traditional automotive industry. As more and more residents come back to Detroit, the infrastructure, business and entertainment industry in Detroit become more dynamic and will attract more residents from Windsor. People from Windsor frequently cross borders to take in sports games, jazz festivals, or to dine in some classic American restaurants in Detroit’s otherwise bleak core. The city of Detroit also created thousands of job opportunities for Windsorites. On the other hand, consumers from Detroit made a contribution to the growth of alcohol consumption in Windsor, as Ontario allows drinking at a younger age of 19, than does Michigan. “Windsor’s flashy casino was largely dependent on American customers when it opened in 1994, although it has become more domestically oriented since Detroit opened its own casinos” (Bill).

While it is good to see Detroit’s economic recovery is bringing benefits to both sides development and long-term growth; we need to take a cautious approach as the connection between Detroit and Windsor could be tested by potential trade war and other political factor. Continued cooperation, integration, and win-win strategy are the key to create values for both sides.