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Detroit Depopulates
Subject Demand
Topic Supply and demand
Key Words Population, investment, manufacturing, downsizing, efficient, immigration, commuting, telecommuting
News Story

The 2000 Census shows that Detroit's population fell below the one-million mark to 951,270, a 7.5 percent drop, in the 1990s. This is in spite of new housing developments, the building of two new sports stadiums, the revamping of public schools, and corporate investment in new offices in the city.

Detroit is not alone. Elsewhere in Michigan, the Lansing, the state capital, lost 6.4 percent, while Flint lost 11.2 percent. The reason is that many cities were over-reliant on manufacturing, which downsized to become more efficient. Added to this, immigration from outside the state was lower, and the harsh winters led some to settle farther south.

However, overall, Michigan grew slowly to 9,938,444, a 6.9 percent increase. In particular, Livingston County, which borders Detroit, Lansing, Ann Arbor, and Flint, grew 35.7 percent as people deserted the cities and commuted to work. Also, counties in the northwestern corner of the Lower Peninsula grew more than 20 percent due to available land, cheaper housing, and the ability to telecommute. The Grand Rapids population expanded because of the booming furniture industry and tourism to the Lake Michigan coast.

(Updated June 1, 2001)

Questions
1.

The population of an area affects the demand for housing. Draw a demand curve for housing in Detroit. If new housing developments decrease the price of housing, what happens to the quantity demanded? Illustrate on your diagram.

2. a) How do new corporate offices in the city affect the price of commuting for residents?
b) Given this, what happens to the demand for housing in Detroit? Illustrate the effect on the demand curve on your diagram.
c) In economic terms, what kinds of goods are commuting and city housing?
3. How do new sports stadiums affect the demand for housing in Detroit? Illustrate and explain your answer.
4. How do harsh winters affect the determinants of demand in the Detroit housing market? What are the implications for the demand for housing? Illustrate in a new diagram.
5. a) How does cheaper housing outside the city affect the demand for city housing? Show the consequences on your diagram.
b) In economic terms, what kind of goods are city housing and rural housing?
Source Jessie Halladay, "Economic downsizing causes some cities to lose residents," USA Today, March 29, 2001.

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