Obama Celebrates Amidst Detroit’s Misery

President Obama arrives in economically ravaged Detroit on Wednesday for some kind of Motor City victory lap.

But, as he did when he accepted the Nobel Peace Prize in 2009, he is claiming the gold medal even though the race has hardly begun.

He will, indeed, find an auto industry that is thriving and a city that has marginally improved from the depths of its darkest days. But the numbers show Detroit continues to face massive challenges when it comes to crime, education, employment and other indicators of social well-being.

“Detroit has stabilized, but it’s not quite driving, yet,” said James Hohman, assistant director of fiscal policy at the Mackinac Center for Public Policy.

Obama will attend the North American International Auto Show to highlight the 2009 government bailout of General Motors and Chrysler and will celebrate, according to the White House, “the remarkable progress made by the city, its people and neighborhoods.”

But things are most decidedly not OK in Detroit. Since 2005, at least one in three houses in the city — 139,699 of 384,672 — has been foreclosed because of mortgage defaults or unpaid taxes, the Detroit News reports.

“The vast majority are houses, and the tally is so huge it shocked even those who spent years working on foreclosure in Detroit,” the News reported.

“When you see it on a map, it’s absolutely terrifying,” Chris Uhl, a vice president of the Skillman Foundation, which is working to prevent foreclosures, told the paper.

There is no question that these are good times for the auto industry. Cheap gas prices and low interest rates are drawing consumers back to sport-utility vehicles and other big cars that are the bread and butter of American manufacturers. The industry hit a record of nearly 17.5 million vehicle sales in 2015. That beat the previous mark set in 2000.

A mix of funds from state taxpayers and private foundations allowed the city to wipe out $7 billion in debts and emerge from the largest-ever municipal bankruptcy in late 2014 with $1.7 billion to spend on long-neglected repairs and services. Detroit boosters hope booming car sales will help transform Detroit, and there are some early signs that unemployment, crime and home value statistics — following a national trend — have improved.

In 2014, Detroit ranked last among the nation’s 50 biggest cities with a 16.7 percent unemployment rate.

But Detroit pretty much had nowhere to go but up. And it’s still not soaring high at all. Hohman said much of the good news focus has been in and near downtown. 

“It feels really nice,” he said. “But there are almost 700,000 and they don’t all live in those neighborhoods.”

The Bureau of Labor Statistics, which periodically tracks employment at the city level, found in 2014 that Detroit ranked last among the nation’s 50 biggest cities, with a 16.7 percent unemployment rate.

At one point, it earned the nickname “Murder City,” with the highest homicide rate among the nation’s big cities. Crime has receded somewhat since then, with 298 murders in 2014, down from 316 the year before. For 2015, the city recorded 295 homicides.

Still, it remains an unsafe city, even by the standards of other large, urban centers. For the first half of 2015, the most recent statistics available from the FBI, only St. Louis, Baltimore and New Orleans among the nation’s largest cities had a homicide rate higher than Detroit’s 24 per 100,000 residents.

While oversight from the state government seems to have helped the city of Detroit, similar measures have yet to turn around the city’s troubled school system. The citywide school system has a financial commission dating to the administration of former Gov. Jennifer Granholm. Yet, the system continues to flounder among declining student enrollment and poor finances.

Public school teachers staged a “sickout” earlier this month to protest working conditions. Officials say that without additional state aid, the system will be insolvent by April. The Legislature will consider a $715 million rescue plan.

While the city continues to bleed population, home values finally have begun to rebound. Few cities suffered more during the national housing collapse. In some neighborhoods, investors were able to scoop up properties for hundreds of dollars. So again, Detroit had no place to go but up.

“It’s not growing as much as the state average; it’s not growing as much as the national average,” said Hohman. “But it’s a big change from where it was.”

The gains have not been universal, however. ZIP code 48217 — dubbed by University of Michigan scientists as state’s most polluted — saw median home values drop from $41,264 in 2009 to just $15,000 last year.

They may love Obama in 90210, but in 48217, the celebrations for Obama’s visit will not be loud.