Detroit bankruptcy under the weight of urban sprawl and poor transport: Metro Manila has a bit to learn

Detroit bankruptcy under the weight of urban sprawl and poor transport: Metro Manila has a bit to learn

July 19, 2013

by benign0

Sad milestone for a once glorious city and a former citadel of American industrial power. Detroit, Michigan — the city itself and its surrounding metropolitan area home to the United States’ “Big Three” car manufacturers, General Motors, Ford, and Chrysler — yesterday filed for bankruptcy following a decades-long decline the sharpest of which was felt over the last year and a half.

[Photo courtesy Mashable.]

Between 2000 and 2010, the city’s population fell by 25%, from the nation’s 10th largest city to 18th. In 2010, the city had a population of 713,777, more than a 60% drop down from a peak population of over 1.8 million at the 1950 census, indicating a serious and long-running decline of Detroit’s economic strength. Commensurate with the shift of population and jobs to its suburbs or other states, the city has had to adjust its role within the larger metropolitan area. Downtown Detroit has seen an increased role as an entertainment hub in the 21st century, with the opening of three casinos, new stadiums, and a riverfront revitalization project. However, many neighborhoods remain distressed. The state governor declared a financial emergency in March 2013, appointing an emergency manager. On July 18, 2013, Detroit filed the largest municipal bankruptcy case in U.S. history.

The initial documents indicate only that the city’s assets as well as its liabilities each exceed $1 billion. But in his letter, Mr. Snyder said the liabilities were $18 billion.

Saddled by junk status from credit-rating firms, Detroit has had its ability to borrow almost completely shut off and reached its statutory limit to tax its residents to raise new revenue, state officials said. Mr. Orr had called the city functionally insolvent, and it recently missed a payment to the city’s pension system of nearly $40 million.

So far, the city has an agreement to pay some secured creditors 75 cents on the dollar on nearly $340 million in debt. In exchange, the city would get back $11 million a month in tax revenue from the city’s three casinos originally used as collateral to back the debt.

But negotiations with unsecured creditors, who were offered about $2 billion to cover $11 billion in debt, remain stalled.

Automobiles being transported by rail from Detroit c.1973 (Source: Wikipedia)

The gradual erosion of the city’s tax base can be traced to its long succumbing to urban sprawl following a misguided development focus on automobile use for its workforce to the detriment of high-density mass public transportation. In 1950, the city held about one-third of the state’s population. Over the last sixty years, the city’s density has gradually decreased and now has less than 10% of the state’s population, and the sprawling metropolitan area which surrounds and includes the city has more than half of Michigan’s population. An extensive freeway system constructed in the 1950s, 60s, 70′s, & 80′s encouraged auto commuting. In 1956, Detroit’s last heavily used electric streetcar line along the length of Woodward Avenue was ripped out and replaced with gas powered buses. It was the last line of what had once been a 534 miles network of electric streetcars. In 1941, a streetcar had once ran on Woodward Avenue every 60 seconds at peak times.

Because of the resulting sprawl, reportedly the worst among America’s major metropolitan areas, many jobs in and around Detroit had progressively become “beyond reach of the poor”.

Combined with an earlier Brookings Institution study on access to public transit, a portrait emerges of a metro area where many jobs are beyond the reach of low-income residents who lack transportation options and often live inside the city.

Besides potentially adding to commute times, a decentralized job market adds to pollution levels.

The Brookings Institution released its new report today showing that only 7.3% of metro Detroit’s roughly 1.4 million jobs lie within three miles of the city’s central business district. Another 15% lie within a 3-to-10-mile band from the downtown core.

The 77% of jobs that are found from 10 miles to 35 miles out are the highest percentage of decentralized jobs in any of the nation’s top 100 metro areas.

Unlike Detroit’s underpopulation problems, the Philippine capital and its vast suburbia collectively known as “Metro Manila” is, of course, suffering from a fundamentally different terminal disease — an explosion in population within a burdensome underclass of illegal settlers (more aptly known as “squatters”) that engulf the city in squalor, dump refuse that clogs waterways and traps flood waters, and complicate much-needed city planning and development further hobbling implementation of systemic solutions to the megalopolis’s horrendous and infuriating traffic mess. To Detroit’s degeneration into a barren wasteland, Manila had become a fetid shithole. And much of the shared causes of both cities’ decline can be traced to misguided approaches to mass transit development. Indeed, my colleague Paul Farol highlighted this in a recent article…

Right now, one of the key pressures driving people with low-incomes or informal sources of income to live in slum areas is poor public transportation.

Just assume that the average cost of a two way trip with a total length of 16 kilometers (8 kilometers one way) is anything from 50 to 100 pesos and at its worst, it takes two hours to complete one trip (including waiting time at boarding stations). This means that the average Pinoy has to shell out as much as 1/3 of his daily minimum wage and lose 4 hours of his time in traffic — often arriving at his place of work too frazzled to be effective or arriving home too tired to have any meaningful interaction with their family.

In a way, perhaps, the lousy public transportation we have could be the very reason why Juan is tamad (lazy), cannot attend to his duties as a father, and takes home such a small amount of money (around 250 pesos, assuming he is getting the full minimum wage).

The key lies in political will — specifically a willingness to consider the obvious solutions. A now-famous photo of buses deliberately clogging a major Manila highway that has for so long been making the rounds across social media resonates strongly in the way it illustrates just how obvious these solutions are. Indeed, it even introduces doubt as to whether congestion really is the fundamental problem that needs to be solved to fix Manila traffic as it points more to opportunities to address design issues around the way roads are laid out, the way public utility vehicles are deployed, and the way traffic rules are enforced across Metro Manila.

Then there is the obvious problem of how squatters are tolerated by the country’s politicians. No rocket science is needed to understand the concepts surrounding this simple issue. From the perspective of vote-salivating politicians, squatter colonies are easy pickin’ sources of winning ballots and bleeding heart rhetoric. One only needs to see this and the problem of Manila traffic from a realiist’s perspective to identify what the real next steps should be.

[NB: Parts of this article and photos used in it were lifted from the Wikipedia.org article “Detroit” in a manner compliant to the terms stipulated in the Creative Commons Attribution-ShareAlike 3.0 Unported License that governs usage of content made available in this site. Photo of buses clogging EDSA courtesy Boylit De Guzman.]