Obviously the decline of the auto industry was a major factor in Detroit's fall but the civil unrest of the late 60s is what caused the "white flight" out of Detroit and into the suburbs. The city has remained unstable since for a slew of reasons, the biggest one likely being corrupt government.

There's just very little incentive to live in the city itself anymore between the lack of small businesses, crime, etc. I heard a story of a guy who purchased an entire block of houses, demolished them, built new condos and was waiting on city inspection so people could start moving in. Inspection took a while and in the meantime the newly-built condos were broken into and stripped of any valuable piping/wiring. Does that really a place you want to live in? The only reasons I go into the city are for sporting events, the occasional concert, or urbex.

The segregation of Detroit and its metropolitan area are SHOCKING. Look at this map: http://bit.ly/ptgVNe

The blue is African-Americans. The red is Caucasians. The all-too-clear division begins at 8 mile.

Some sort of link has to be established in order to unify the suburbs and the city. Hopefully the M1 rail project can be that link -- unfortunately, like I said in another comment, the rail has to stretch further into the suburbs for it to have any chance of success, IMO.