Farley writes “Detroit in bankruptcy: What are the lessons to be learned?” for Detroit book

December 4, 2017

Reynolds Farley penned a chapter entitled, "Detroit in bankruptcy: What are the lessons to be learned?" for the 2017 volume Why Detroit Matters: Decline, Renewal, and Hope in a Divided City, edited by Brian Doucet.


Detroit’s city government ran out of funds to pay its bills in early 2013. Emergency Manager Kevyn Orr, with the approval of Michigan Governor Snyder, sought and received bankruptcy protection from the federal court. Detroit became the largest city ever to enter bankruptcy. There are four lessons that should be learned from the city’s bankruptcy:


  1. Local governments may have brighter futures after bankruptcy than before.
  2. The organization and financing of local governments in the US must change when there are massive demographic shifts and fundamental economic changes.
  3. The consequences of this nation’s history of racial inequality and the recent diminution of economic opportunities for those lacking either highly valued skills or an advanced education must be addressed.
  4. Urban planning and local governance must realistically deal with the likelihood of slow economic growth and population decline.

The first section of this chapter explains why the City of Detroit entered bankruptcy. A second section describes how the bankruptcy process was accomplished, since this strongly influenced the future of the city. Then, there is a discussion of the four lessons to be learned from Detroit’s bankruptcy.