Economy

Will Detroit's Population Stop Shrinking?

For all the excitement about the rebuilding of Detroit and the money that has been put into its downtown by developers and large companies, the most pressing question for the city is whether its population will keep dropping. With an ongoing drain of residents, the tax base will continue to erode and housing and poverty problems will worsen. With a falling population, the city will never truly recover.

Detroit’s population in 2010 was 713,777. In 2015, the number had dropped to 677,116, so the 2016 number will be very telling. Many of the residents are wretchedly poor, a problem Detroit has been unable to solve and cannot in the future. The city’s poverty rate, according to the most recent Census numbers, was 40.3%. Median household income was $25,764, less than half the national average. It would take an unimaginable investment in education and jobs to meaningfully improve these numbers.

The renaissance of the downtown portion of Detroit near the Detroit River draws attention from the blight that exists as the city spreads out toward 8 Mile Road, its northern border. A drive through many of the neighborhoods shows that the city is still desperate to improve huge sections. Once again, the amount of money needed to do this is unimaginably large.

Like most major cities, Detroit’s financial health is tied to its tax base. The high level of poor people makes residents a very limited source of tax dollars. Detroit has given tax credits to new businesses. That may benefit the city long term, as those companies start to pay later. In the meantime, some of these companies are not direct net contributors to tax revenue.

So, what is the best measure of Detroit’s future? A net growth in new residents. Presumably, some of these will be people who work in the newly rebuilt downtown. Can they offset those who continue to flee? The 2016 count will be the answer. Will Detroit’s population drop below 670,000?

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