Why are water bills unaffordable?

On July 18th, 2013, before a small gathering of court reporters and local activists, Michigan Governor Rick Snyder stepped out to a podium and confirmed an unsettling rumor: the city of Detroit was filing for bankruptcy.

No American city of its size or stature had ever so monumentally faltered. Yet, the news surprised no one. “It’s sad, but you could see the writing on the wall,” Terrence Tyson, a long-time Detroit city worker, told The New York Times, shortly afterward. “This has been coming for ages.”

Just 50 years earlier, Detroit had been a flourishing metropolis. As “the cradle of America’s automobile industry,” it had been the country’s fourth-largest city, with a workforce 1.8 million strong. But decades of racial tensions, restructuring, and industry decline took a toll: by the 2010 census, the city’s population had plunged more than 60%. Once a haven of economic growth, Detroit had morphed into what journalists deemed to be a “dystopia” -- a place largely reserved for the disenfranchised who had no means of escaping, and few employment opportunities.

For these residents, bankruptcy came with drastic consequences. An estimated $18-20 billion in debt, the city of Detroit immediately began struggling to recoup funds. The first source it turned to was the Water and Sewage Department, whose bonds accounted for roughly one-third of this debt.

Targeting people who owed the Water Department as little as $150, dozens of blue utilities trucks descended on the fringes of the city to shut off water in 24,000 homes.

And this was just the beginning.


A Brief History of Detroit: Migrations, Race, and Displacement

To fully understand why Detroit’s residents so commonly fall behind on their water bills, one must delve into the city’s history. And unfortunately, it is a history wrought with institutional, policy-backed racism.

The first black population burgeoned in Detroit around 1910, as a result of the first Great Migration of African Americans from the Southern United States. As the auto industry took off in the 1920s and 1930s, and as blacks fled from rampant racism and hostility in the South, this population gradually and steadily increased, and all-black neighborhoods began to pop up throughout the city.

But it wasn’t really until the early 1940s, at the onset of World War II, that Detroit experienced a substantial demographic shift. Between 1940 and 1950, Detroit’s black population nearly doubled, to 300,000 -- nearly all of which came to work low-paying defense industry jobs. The white community were threatened by the arrival of these black workers, and a series of riots broke out. The largest of these, the Detroit Race Riot of 1943, resulted in 34 deaths (25 of whom were black), 433 injuries (75% of which were black), and large amounts of property damage (most of which was inflicted on the city’s poorest neighborhoods).

As tensions mounted, Detroit urged young white families to move into the surrounding suburbs. At the same time, the city enforced Federal Housing Administration policies that refused loans in neighborhoods with “inharmonious racial or nationality groups”: white people in integrated neighborhoods were overlooked for loans, and blacks were altogether denied. Beginning in 1950, a “white flight” of massive proportions ensued, driven not only by racialized city policies, but by the bigotry of young white families. Meanwhile, redlining landlocked blacks in the city, and largely relegated them to housing projects.

“Most blacks had nowhere to go,” writes The Detroit News. “They were confined to pockets of the city, hemmed in by federal housing policies and activist groups that enforced segregation.”

By 1960, 1 in 4 white residents had left the city. At the same time, Detroit began making substantial renovations to the city -- often in “requiring” the demolition of black neighborhoods. A period of “urban renewal” ensued, in which thousands of African Americans were forced out of their homes.

As the civil rights movement spread throughout America, racial tensions in Detroit reached another boiling point: on July 23, 1967, a riot led to 43 deaths, 1,189 injuries, and 2,000 destroyed buildings.

In the 1970s, outsourcing tanked the auto industry, and unemployment rates in the black community spiked as high as 40%. As the city’s first black Mayor fought for the end of court-order segregation in schools, some 414,000 additional whites left the city. The white population in Detroit spiraled to below 35%; for the first time in its history, the city of Detroit became predominantly African American.

For those who remained in the city center, economic woes continued. Outsourcing led to poverty, and poor neighborhoods became susceptible to drugs and crime. The rise of crack cocaine in the 1980s racked the city: policy measures like the War on Drugs unfairly targeted African Americans, and incarceration rates skyrocketed. By 1989, less than 50% of Detroit’s black families were two-parent homes, down from 70% just a decade earlier; the average black household income decreased by 25%.

And then, in the 2000s, came mass foreclosures, most of which were largely due to shark loans who’d systematically targeted lower-income, black residents. For the city’s 85% African American population, the median household income dropped to less than 50% of the national average. Unemployment rates topped 23%. An astonishing 38% slipped below the poverty line. While blacks were disproportionately affected because of the institutional racism, a the 10% of white families that remained in Detroit faced similarly bleak economic prospects.

As a result, families increasingly found themselves falling behind on bills -- even for water, a resource their lives depended on.


Detroit's Water Problem

When Detroit’s city government began shutting off residents’ water access in the Summer of 2013, it came with very little warning. “Delinquent” customers -- those deemed to be either two months or $150 behind on their bills -- were identified and warned; if they failed to settle their debt within 30 days, a contracted demo man would come by and close the valves. The major problem with this? More than 50% of the entire city of Detroit were were behind, and unable to pay their bills.

In 2014, shut-offs continued to increase. By July of last year, The Atlantic reported that an estimated 100,000 Detroit residents -- roughly 1 in every 7 -- had been affected. Pregnant single mothers, the elderly, the disabled, families with young children: no one was spared from this scourge.

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In Detroit, water doesn’t come cheap. A series of price hikes over the years has put the typical resident’s monthly bill at around $70 -- some 60% higher than the national average. These rates have quadrupled since 1986, and have risen nearly every year since then, in an apparent effort to mitigate the city’s debt. For those who live in poverty and frequently miss their bills, this is a vicious cycle: many of their homes contain antiquated, inefficient plumbing systems that leak and raise the bills even more.

If a customer fails to pay his or her balance, the Water Department is permitted to “place the amount of any unpaid water and sewer bill on the City of Detroit Property Tax Roll as a lien for collection purposes.” In other words, the city can seize your property over a water bill.

This is precisely what happened to Detroit resident Bobbi Thompson. After falling behind $200 on her water bill, the city shut off her water; within a day, Children’s Protective Services came and took possession of her four daughters. It would take nearly two years of custody battles for her to get them back, and in the meantime, she lost her home. Cases like these are all too common in Detroit.

“People may own their home outright, after living there for thirty or forty years,” Detroit green Party member Lou Novak told The Progressive, “but because they can’t pay a $1,200 water bill, they’re going to lose their home.”

For its part, the Water Department offers enrollment in what it calls the “Detroit Water Fund.” If eligible, “the fund will pay up to 25% of a customer's monthly bill for up to 12 months;” after that, the customer is required to continue to pay their remaining portion of the bill each month in order to remain eligible.

There are obvious flaws with this -- the most obvious being that a poverty-stricken family’s situation is unlikely to improve within a 12 month period. To qualify, a resident must also fit a number of criteria: an outstanding balance between $300-2,000, a house that is leak-free, and an income that is at least 150% below the federal poverty line.

Given the rash of water shut-offs in 2014, and a resulting, widespread inability to pay, it was clear that a more promising solution was necessary.

That's where The Human Utility comes in.


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