Fixing Detroit's Doughnut Problems

(Bloomberg View) -- Detroit, as you've probably heard, is on the comeback trail. Its six-county, 4.3-million-population metropolitan area has, after a terrible 2000s, been adding jobs at a markedly faster pace than the rest of the country since early 2010. And the city itself, long a byword for urban despair and decline, is becoming known for things like great restaurants, art, real-estate finds and, of course, hipsters fleeing Brooklyn.

But it still has a really big doughnut problem. No, not a lack of fried, circular confections. Detroit and surrounding areas appear to be well supplied with those. The city does, however, have a surfeit of vacant and near-vacant neighborhoods spreading to the north, east and west of its resurgent downtown and midtown that civil engineer Charles Marohn, founder of the great Strong Towns website/social movement, last year dubbed "the doughnut of despair."

It's not a full doughnut -- the presence of the Detroit River on the southern edge of downtown makes that impossible. But I like the metaphor. I think it also can be applied to the way the Detroit area as a whole has developed since the 1960s: a doughnut of growing, mostly white suburbs that surrounded the shrinking, mostly black city and for the most part turned their backs on it. L. Brooks Patterson, the longtime (he was first elected in 1992) county executive of Oakland County, just to Detroit's north, summed it up for the New Yorker's Paige Williams in 2014:

"I used to say to my kids, 'First of all, there’s no reason for you to go to Detroit. We’ve got restaurants out here.' They don’t even have movie theatres in Detroit -- not one." He went on, "I can’t imagine finding something in Detroit that we don’t have in spades here. Except for live sports. We don’t have baseball, football. For that, fine -- get in and get out. But park right next to the venue -- spend the extra twenty or thirty bucks. And, before you go to Detroit, you get your gas out here. You do not, do not, under any circumstances, stop in Detroit at a gas station! That’s just a call for a carjacking."

Patterson's approach on the job has been similar. An excellent administrator if not exactly a diplomat or visionary, he has tried to position Oakland County as a distinct, smoothly running economic entity independent of the dysfunctional city along its southern border. In some ways, he's succeeded: Oakland County has 505,396 fewer residents than Detroit's Wayne County, but 9,234 more jobs. Its per capita personal income in 2015 was $63,454 to Wayne County's $38,512. But I suspect that the Detroit area's lack of a vibrant urban center has hurt even Oakland County's efforts over the past few decades to attract new industries and talented people, and that the area's stark racial and economic divides haven't helped, either.

From 1990 to 2010, payroll employment fell 9.8 percent in the Detroit metropolitan area, while rising 19.9 percent nationwide. Even other Rust Belt metropolises did markedly better: In metro Cleveland, employment also fell, but only by 3.8 percent. In metro Pittsburgh, it rose 7.6 percent, in Milwaukee 6 percent, in Chicago 5 percent. These are all cities that have struggled with problems similar to Detroit's. But none of them went full doughnut.

As food, doughnuts are OK (not any good for you, but tasty). As ways of arranging where people live and work, they cut us off from one another and seem to stymie political compromise and economic adaptation. As Wired's Adam Rogers wrote earlier this month about a giant new doughnut-shaped edifice in California:

Apple’s new HQ is a retrograde, literally inward-looking building with contempt for the city where it lives and cities in general.

Anyway, Detroit is now finally beginning to break down the old doughnut division between the city and its suburbs.  It has a vibrant center again, with (to go down Patterson's list) restaurants, an indie movie theater and other attractions -- likely soon to include basketball, with the Pistons on the cusp of returning to the city -- to lure people in from Birmingham or Royal Oak. When I was last in the city almost three years ago, I was still warned (by a Detroit resident, not a suburbanite) to be wary of gas stations. But carjacking is down a lot since then, and most other crimes are on the decline, too.

Downtown is still mostly surrounded, though, by that giant doughnut of troubled, in some cases abandoned, neighborhoods. And Detroit's overall population is still declining, albeit at a much slower pace than in the years before 2010.

Fixing Detroit's Doughnut Problems

So what is to be done? In his "doughnut of despair" essay a year ago, Marohn offered this suggestion:

I'm not going to pretend I know the answer, but if I had to start finding it, I would make a go at moving -- literally picking up and transporting -- the highest quality homes available within that doughnut of despair into the acres of underutilized parking lots in the downtown core. If that filled up, I'd start working on filling the neighborhoods directly adjacent. And then I'd work to help my people there as cheaply and affordably as possible so that they, too, can participate in the resurgence. So that they can build their own wealth and not be left behind on the margins this time.

In a response, writer Johnny Sanphillippo argued that this was a terrible idea ("right up there with the suggestion that the city should just cut off power and water to people in big chunks of the city to 'encourage' them to migrate"), and that the city would be better off with a more organic approach, allowing sparsely populated neighborhoods to reconstitute themselves as semi-rural villages, with rural-style services and light-touch regulation.

In a new paper that is actually what got me thinking about this subject, economists Raymond Owens III and Pierre-Daniel Sarte of the Federal Reserve Bank of Richmond and Esteban Rossi-Hansberg of Princeton University offer another approach: using a "quantitative spatial economics model" to determine which underpopulated census tracts in Detroit might benefit most from development guarantees to encourage the creation of critical masses of housing and services. Interestingly, the model churns out not just a bunch of tracts surrounding downtown, but also a mix of downtown-adjacent and farther-flung neighborhoods. That is, the map it generates doesn't look like a doughnut. It's a start!

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Justin Fox is a Bloomberg View columnist. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”

  1. Since employment bottomed out in metro Detroit in March it has risen percent. Nationwide the increase since then is percent.

  2. It's definitely not gone, though. In most other big U.S. metropolitan areas with large black populations, the once-stark line between city and suburbs has faded in recent decades. In metropolitan Atlanta and Washington, far more blacks now live in the suburbs than in the core cities. The Detroit area is still nowhere near that tipping point.

To contact the author of this story: Justin Fox at

For more columns from Bloomberg View, visit