projected to grow to nearly 7 in 10 within five years. Detroit’s population had dwindled from nearly 1.9 million in 1950 to 713,000 in 2010. Its once-vibrant neighborhoods were studded with nearly 150,000 vacant or abandoned houses and vacant lots, depressing already rock- bottom real estate prices. Indeed, the city’s financial crisis was a monument to decades of economic despair, which was accelerated by industrial disinvestment, suburbanization, racial inequality, fiscal mismanagement, dysfunctional city services, municipal corruption and total neglect. By 2013, the city’s tax base had eroded so substantially that there was simply no room for raising additional revenues through taxation, already the highest in Michigan. Borrowing ceased to be an option as Detroit had reached its statutory debt limitations and had bond ratings deeply below investment grade.
The financial crisis put retirees at risk of pension cuts and thr loss of their health care. And it jeopardized the future of Detroit’s most monetize-able asset—the Detroit Institute of Arts—whose world-renowned collection included masterpieces by Van Gogh, Rembrandt, Picasso and Matisse. Facing a potentially ruinous ending, some creditors pressed hard for the liquidation of the museum’s collection.
We Are Alive: A Grand Bargain for America’s City is the story of how Detroit climbed out of bankruptcy, forming both a cautionary and inspiring tale. In this real-life drama, people of all backgrounds and viewpoints found common ground in search of a solution to give Detroit a new lease on life. Whether the city’s recovery is inclusive across race, class and ethnic communities will determine whether the Grand Bargain that enabled the city’s exit from bankruptcy is a sustained success. This story will resonate with audiences from around the nation and the world, including those living in states and communities facing fiscal distress and nations where faith in democratic government and civil discourse is flickering.
By July 2013, the City of Detroit was flat broke and in the final throes of a decades-long slide toward insolvency. With more than $18 billion in debt, Detroit filed the largest and most complex municipal bankruptcy in history. But behind the cold text of its bankruptcy petition were the human costs of Detroit’s crisis. The most basic public safety and sanitation services —when delivered at all—were sporadic and haphazard. The city owed $3.5 billion in unfunded pension liabilities and had promised its retirees lifetime healthcare at a cost of about $5.7 billion, for which no funds had been reserved. More than 4 in 10 city dollars were being used to pay retiree costs and debt—and that number was