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How Detroit Went Bankrupt

The 2008 financial crisis really hurt Detroit, but the city has been crumbling over the last six decades.

1. The 1960s: The Riots

Three Lions / Getty Images

• Since 1950, the city’s population has declined in every census.

• Following a police raid on a bar, the deadly Detroit riots occur July 23–27, 1967. The Michigan National Guard is sent in by the governor, and the president sends in army troops. Over 2,500 stores are harmed or completely destroyed, almost 400 families lose their homes, and more than 400 buildings are beyond repair. The losses from the riots add up to an estimated $40 million to $80 million in repairs. 43 people are dead.

• People begin leaving downtown for neighboring suburbs and take their businesses with them.

2. The 1970s: Arson Capital

Jason Reed / Reuters

• After the riots, crime continues to rise. Detroit becomes the arson capital of America. For a number of years, the city has the highest murder rate in America.

3. The 1980s: Population Continues to Plummet

Paul Sancya / AP

• The trend of declining population that began in the ’50s accelerates.

• Gangs and drugs spread throughout the city. Some of the most notorious gangs are the Young Boys and the Chambers Brothers.

4. The 1990s: Violent Crime, Abandoned Buildings

Rebecca Cook / Reuters

• From 1990 to 2010, crime rates in Detroit have had a ratio of about 2,700 violent crimes per 100,000 people.

• Buildings are simply abandoned, and then whole lots, followed by entire streets in the dark. These areas become prime locations for arson, fires, and theft.

5. The 2000s: Auto Bailout

Rebecca Cook / Reuters

• The 2000 census shows the population has fallen by 25% to 700,000. At its largest, Detroit listed 1.8 million residents in the 1950 census.

• 2008 brings the auto industry demise and bailout. Factories close and jobs disappear.

• Mayor Kwame Kilpatrick is charged with 24 felony counts of mail fraud, wire fraud, and racketeering.

• The estimated median household income is around $26,000.

• One in every three residents lives below the poverty line.

• Areas are so sparsely populated that there aren’t enough people to support municipal necessities. The city tries to demolish empty areas to condense the city, but the tens of thousands of buildings and labor cost too much.

• In 2012, half of Detroit’s property owners are unable to pay their taxes.

6. 2013: Bankruptcy

Carlos Osorio, FILE / AP

• More than half of the city’s residential lots around the city are abandoned.

• The average price of house sales last year was $7,500. There were also a handful of properties put on the market for $1.

• People move downtown in an attempt to pour money, resources, and jobs into the city.

• Many of Detroit’s historic landmarks have gone forgotten. The iconic Masonic Temple almost closes its doors in June because it cannot pay taxes, but an anonymous donor writes a check to save the theater; his identity is later revealed to be musician Jack White, a Detroit native.

• On March 25, Kevin Orr steps in as emergency financial manager.

• On July 18, the city files for Chapter 9 bankruptcy.

• Detroit is approximately $18.5 billion in debt.

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