Economic development challenges facing older Michigan suburban communities

Older suburban communities have experienced many of the economic challenges of their adjacent central cities in some instances the difference as been one of scale.

Michigan State University Extension and many others have observed a decline in the city of Detroit’s population for more than 50 years. Many of the former Detroit residents moved to suburban communities just outside of the city’s boundaries. During that period, communities such as Southfield in Oakland County, and Inkster and Dearborn in Wayne County grew. Some suburbs grew into strong, economically diverse municipalities where they developed a mix of housing, commercial and industrial development. Other communities remained primarily bedroom communities where residents found affordable housing, but worked in other parts of the metro area.  As these communities aged, they too started to lose population to newer development farther from the central city. Now, first ring suburbs have older, aging housing stock and aging infrastructure with limited budgets and high property taxes.                

The housing crisis made a bad situation worse for these first-ring suburbs since their property values were lower than development in second- and third-tier suburban communities. The end result has been a substantial decline in revenue from property taxes and a limited ability to provide basic municipal services such as police and fire. For the smaller of the first-ring suburbs, significant population losses over a 20-year period can create serious sustainability problems in this relatively short period of time. Conceivably, a community of 25,000 residents could lose 40 percent of its total population over two census counts.  Such losses would wreak havoc on the vacancy rate and property tax revenue, the primary source of income for these communities.

Therefore, just like Detroit – a city that is working to attract residents into areas such as Midtown and Downtown – the first ring suburbs must work to attract residents and maintain the ones they currently have. They must become more creative in redeveloping vacant commercial properties and allow for more blended developments of residential and commercial.

For suburban bedroom municipalities where the majority land use is single-family housing, the quality, quantity and affordability of such housing will be critical to their long-term survival. Their challenges mirror many of the challenges Detroit faces. The major difference is the scale since many of these cities are significantly smaller. However, these communities will need to be just as creative if they hope to remain financially solvent and avoid the serve financial crisis that grips their adjacent central city.               

For more information or to speak with a MSU Extension educator, contact your local MSU Extension office.