Detroit was Broke. Through seven people’s stories, the author attempts to explain what went wrong, what went right, and what was the end result of Detroit’s trip through the Great Depression and bankruptcy.
Detroit was an urban oasis of jobs and industrial might until the 1960s. Then, race riots encouraged white flight to the suburbs reducing tax revenues. Deindustrialization and movement of factory jobs to other lower-wage countries decimated jobs in the city. Lack of jobs led to increased crime and mortgage defaults, which led to abandoned houses and squatters making them unsellable. Lack of jobs also forced subpar credit scores on local residents.
All of these factors led to opportunists buying these houses cheaply in bulk. After repackaging them, the investors used predatory lending practices to sell them to local residents who could not qualify for bank loans. The new homeowners were at an increased risk of default making them defacto renters of properties they were required to bring up to livable condition. And one missed payment and they were out with all their previous payments, improvements, and sweat equity lost with no legal recourse.
In the meantime, city government was forced into bankruptcy by the state. 30% of city jobs were cut. City bonds went into junk status making getting money substantially more expensive just when tax revenues were cratering due to the city resident issues detailed above.
How Detroit turned itself around from this domino effect of disaster after disaster makes an empowering read. The author attempts to not point the finger at race and Republicans for Detroit’s issues with minimal success. However, there were many issues caused by globalization and the economic crash that were clearly out of the city’s control. Overall, Broke is an intriguing story of failure, resilience, and hope—both individually through the seven people’s stories and on a national scale. 4 stars!
Thanks to St. Martin’s Press and NetGalley for a copy in exchange for my honest review.