DETROIT: Transit Did (and Does) Play a Part
On June 18, 2013, under the direction of the state of Michigan, the City of Detroit filed for bankruptcy, the largest municipal bankruptcy declaration in our nation’s history. According to the state-appointed emergency manager, Kevyn Orr, the city has amassed some $18 billion (give or take a few hundred million) in liabilities, against assets of $4 billion. Those liabilities include unpaid bills, health care liabilities and unfunded pension benefits.
Since that date, we have witnessed a veritable avalanche of articles and op-eds attempting to explain why poor Detroit went bust. Each piece sought to assign blame as viewed through the appropriate ideological prism. George Will sees only labor and political perfidy. Stephen Rattner sees yet another opportunity for the federal government to play Santa Claus. Cato’s Michael Tanner identifies the usual suspects, paramount being the unfunded pension program and retiree health care benefit liabilities. Tanner also aptly identifies the city’s anti-business environment and crushing local tax burdens on remaining residents as additional culprits. Some even see a racist plot to undermine governance of a mostly black city. Mind you, some governance has to be in evidence in order to be undermined. There was (and is) scant evidence of that. Others see insensitive corporate policies that mindlessly pursued profits to the exclusion of all other considerations (some truth to that). Still others have dusted off more prosaic existential motifs as the root cause of the city’s myriad ills (capitalism’s ultimate destination, liberalism’s ultimate destination, etc.).
Whatever the reasons for Detroit’s slow slide to oblivion, no one, in our view, deigned to mention another obvious culprit. That is, the city helped fashion its own noose by slowly destroying a viable transit system at the insistence of one General Motors (GM). After pursuing a strategy of crippling transit across the country by purchasing streetcar systems through intermediaries and quickly converting them to buses, GM buses, GM could hardly stand by and let Detroit successfully operate a modern streetcar system in the very heart of the world’s auto industry.
Little known is the fact that the city of Detroit had municipalized its streetcar system as early as 1922. Only San Francisco, among major cities in the U.S., had followed that course of action (in 1912) so early in the 20th century. Unfortunately, this did not ultimately insulate the streetcar from the strong anti-transit forces swirling around Detroit. Fast forwarding to the 1940’s, the streetcar system had become a campaign issue in the 1948 mayoral election with the victor, Eugene Van Antwerp, fulfilling a promise to maintain and improve the system. The defeated challenger would have junked it. Between 1945 and 1949, the city ordered 186 brand new PCC streetcars, the most modern available, to update the system. At the same time, the system was rationalized to recognize the shrinkage in patronage, especially in the off peak, and the need to retire older equipment on marginal routes. This rationalization was naturally in line with recommendations GM had made to the city to substitute buses on numerous streetcar lines. By 1952, the transit system’s backbone had been whittled down to four well-patronized streetcar lines, all served by modern PCC streetcars. GM kept bombarding the city government with plans calling for additional conversions. Bit by bit, the city finally caved under the pressure and the last streetcar ran in Detroit in April, 1956. It is telling to note that when the last route, the flagship Woodward Avenue line, was converted, headways were 90 seconds in the peak and 2½ minutes at midday. The line required 66 PCCs in the peak and carried over 70,000 weekday passengers.
So why was converting Detroit’s streetcar system so important an event? The reasons that we are investing in streetcars across America today were just as valid in the 1950’s. The streetcar helps bring and sustain economic development and typically draws a greater clientele than the bus. It reduces reliance on the automobile (obviously a non-starter for the automobile industry in Detroit). It encourages a walkable environment and binds and encourages cohesive neighborhoods. It is also a visible investment in the community that emphatically says we think transit is important. Developers and existing businesses all note this in their investment calculations. Take that away and you insert one more factor for fostering urban decay.
Abandoning Detroit’s scarcely depreciated PCC streetcars in 1956 (they ran for an additional 30 years in Mexico City) sent a clear message to the citizens of Detroit that transit was not important. And Detroit transit riders weren’t stupid. They knew that the replacement buses were smaller and slower and were no match for the larger, faster, and more comfortable PCC streetcars. One advantage that Detroit could have exploited was the work done in the 1930’s to widen Detroit’s main arteries (Woodward, Michigan, Gratiot and Jefferson). This gave Detroit’s streetcars plenty of room to make the most of their advantages. But GM saw only saw opportunities for additional automobiles on those roadways, not transit.
Now back to the present. We should note that in spite of the gathering dark clouds of bankruptcy, Detroit is actually now on track to restore rail service on Woodward Avenue. A ground-breaking privately initiated streetcar project will serve the rapidly redeveloping portion of Woodward Avenue between midtown and downtown. Called M-1 Rail, the project will receive private and philanthropic grants totaling almost $100 million of the $137 million cost. The federal government is chipping in $25 million. The co-chairs of M-1 Rail, Roger Penske of Penske Racing and Penske Automotive Group and Dan Gilbert, Chairman and founder of Quicken Loans, have seen the wisdom, indeed the necessity, of restoring quality fixed guideway transit in this corridor to help spark development. They have committed $3 million of their own money to the project. The Kresge Foundation is providing a $35 million grant. The line is expected to help generate over $500 million in new development along the corridor. Construction of the M-1 streetcar (M-1 is Michigan DOT’s highway designation for Woodward Avenue) begins this fall with the first streetcar scheduled to run in the Fall of 2015. The line will be 3.3 miles in length and feature eleven stations.
There is plenty of blame to assign in the slow descent of Detroit to its present sorry state. We all know that the population of Detroit has shrunk from about 2 million in 1950 to 700,000 today. And we know most of the vaunted automobile plants (GM, Ford, Chrysler) were moved to the suburbs, rather than investing in Detroit proper. The city was riddled with freeways, destroying and balkanizing viable neighborhoods, dispersing industry and commercial activity, and facilitating travel by rubber-tired conveyance and little else. Even today, the latest plans for the Detroit region center on a new $4 billion highway widening plan. There is also a new regional transit authority and a plan for a region-wide BRT system but I’m not holding my breath on that one.
This is also a tale of political fecklessness, when a city could not summon the will to adjust and live within its means. Herbert Stein (who was born in Detroit) once famously said that “if something cannot go on forever, it will stop.” Well, Detroit has reached this point. I can’t begin to predict how this bankruptcy will end and how any settlement will affect the municipal bond market (maybe it already has- Saginaw and Genesee Counties and Battle Creek, Michigan were forced to withdraw recent bond offerings). Detroit is only likely to be a winner if it can emerge with the necessary resources to improve and tailor city services to a population of 700,000, bereft, of course, of the crushing debts that it brought upon itself. The city will also need to get out of the way of the private sector and let it function freely.
Just remember, a key turning point for the city was in the mid-1950’s when Detroit was forced to walk away from a viable urban rail transit system. It is very likely that restoration of the streetcar on Woodward Avenue will be a key act in reviving a city that is already showing nascent signs of renewal. My money is on the private sector to successfully lead this resurgence. Detroit is not likely to capture its past glory but it can create a new path to prosperity through a newly invigorated private sector. The streetcar looks just like the vehicle to help make this happen. I’d say, all aboard!!!
Glen Bottoms is Executive Director of The American Conservative Center for Public Transportation and a confirmed optimist