Artists Steve and Dorota Coy, who are major characters in Detropia. (Loki Films)

Heidi Ewing and Rachel Grady are the directors of "Detropia," a documentary released last year about the city of Detroit and what decades of industrial decline and population flight have done to it. It's on Netflix; I highly recommend it. It is their fourth documentary feature; they also contributed a segment to the "Freakonomics" documentary. Their second feature, "Jesus Camp," was nominated for an Academy Award for Best Documentary Feature in 2006. We spoke on the phone Friday morning; a lightly edited transcript follows.

Dylan Matthews: Thanks for taking the time, I really appreciate it.

Heidi Ewing: Thanks for having us. It's one of those films that I guess the time is still ripe for, especially right now.

Rachel Grady: We saw it coming, unfortunately.

Heidi Ewing: It was one of those things where people didn't want to hear the message of the film, necessarily.

Rachel Grady: Because it's bad news. People hate bad news.

Heidi Ewing: We were trying to do as positive a spin on it as possible, and we wanted it to be people who could leave but have chosen to stay, and there's so much darkness, so much desperation, that it was really hard to come up with the story that we did, where there's hope. There's always hope.

Dylan Matthews: One of the really powerful scenes in the movie is set at a town hall meeting, where Mayor David Bing is trying to sell the public on a plan to move folks toward the city center. What's happened with that initiative since you wrapped filming?

Rachel Grady: It was met with a really bad reaction. These are the citizens that have decided to stay. They're the ones, in general, that have put in all the hard work of keeping the city floating, so I think it's really devastating to them that they're the ones that have to move, after all their dedication to the city.

The other thing is that it's happening anyway, because services are shutting down very quickly in terms of safety — ambulances, police officers — and in terms of quality of life, like garbage pickup, or whether or not someone fixes the big hole in the road, in front of house, or if the city is mowing the large field across the street.

Heidi Ewing: They've cut services, already, to those areas. On paper it is a very smart idea to bring everybody into a few neighborhoods, because it is impossible to pay for services and manage such a vast tract of land.

When you look at Cleveland and Pittsburgh, and why they've done better than Detroit, besides diversifying their industries, the reason is that those are manageable spaces, especially a place like Pittsburgh. Detroit has this added issue of the industrialized wasteland. The sheer space makes it unmanageable.

One of the urban planners you see talking to the mayor in one scene is a really smart guy, and I turn on the radio the other day and there he was, being interviewed by "All Things Considered." The attempt to make it official, to get people to move, is going to come alive again. There's no financial incentive to get anybody to move, so they're trying to make it voluntary. I think if there was a financial incentive, many would leave, but that's a fantasy.

Dylan Matthews: The movie showcases one young artist couple that moved in precisely because the city's gotten so cheap — they got a very swank loft apartment for $25,000. And they aren't alone. What are they getting out of being there?

Heidi Ewing: They got a Whole Foods out of it, for one thing.

It is happening. It's all true. There are young people moving in, and you can get a luxurious pad for cheap. Most of the newcomers, they're not going to feel the bankruptcy, because they already live in the area that the city is focusing on developing and is policing, where [Detroit businessman] Dan Gilbert is buying up skyscrapers.

I don't think that couple will actually feel the bankruptcy, but the vast majority of the residents will. About 50,000 won't and they're all living within 20 blocks of that Whole Foods. People will continue to move in. They're not afraid of municipal bonds — they don't know what that means.

Rachel Grady: That's a very interesting question. I want to see what happens to those people when they have to have kids

Heidi Ewing: There are no schools for their kids. They'll have to leave.

Rachel Grady: A lot of things have to come together for there to be a functioning city. The schools are a big part of it, and the schools are some of the worst in the entire country. We'll see if they get scared off eventually.

Heidi Ewing: It's an interesting question, and it's just so interesting that if it weren't for the lack of jobs for young people, it wouldn't have happened.

Detroit is benefiting from this recession in that people who would have never moved to Detroit in another economy — they'd be in Chicago, New York — are moving there. Detroit offers this urban excitement, they can live for cheap, there's this little micro-economy with restaurants and shops for people with some means, so it's actually a boon for Detroit in a weird way. That is the reason that those people continue to come. It's all part and parcel of this non-recovering economy we're all living in.

A United Auto Workers meeting, in a scene from the film. (Loki Films)

Dylan Matthews: Detroit's collapse has happened despite the auto industry getting bailed out and U.S. automakers making a big comeback in recent years. What explains that decoupling?

Heidi Ewing: The metonym for the auto industry has always been Detroit — "Detroit's bouncing back today" and so on. They should stop doing that, because the fate of Detroit and the fate of the auto industry diverged long ago. The fact that Chrysler and GM are bouncing back does not affect the local economy, and I think people still don't quite get that.

Rachel Grady: Even the people who live there believe that. They're kind of living in the past, in terms of there reality of the situation. This has been going on for decades. It takes a while for people to embrace what's happening. There's so much nostalgia about Detroit by Detroiters.

Heidi Ewing: It's the most nostalgic place in America, for sure. There are still people who will tell their kids and grandkids about the good old days, and the kids get confused and think they lived through that.

You sit down with Mr. Stevens at the Raven Lounge [Stevens is a major character in the movie - Dylan] and they're hanging out in their awesome suits and talking about the good old days in the plant and making a middle-class lifestyle. It's inspirational what happened to Detroit and you're kind of in it, and it's an epic spot.

I was born in 1971, I lived eight miles outside the city, and I never saw the good old days. I remember Japan ravaging all my dad's competitors, and his business barely surviving. But we're all hankering for a time none of us lived through.

Dylan Matthews: The city's seen a really striking demographic shift in recent decades, going from being 84 percent white in 1950 to 83 percent black in 2010, and had a lot of tension around that, the 1967 riots being the most notable example. How has that history, especially the riots, shaped things today?

Rachel Grady: I think that it was devastating to the city. A lot of people pegged the riots at the end of the 60s to the big corner that the city turned in terms of viability and quality of life, etc.

The vast majority of white citizens totally abandoned Detroit and never went back. This actually played out in a lot of cities in America. There was white flight everywhere. It's just like everything else with Detroit — it's not even that it's extremely original, it's just the scope is bigger. The scope is to devastating levels.

Do other cities have infrastructure problems and white flight? Yes. Did their economies collapse because manufacturing disappeared? Yes. None of it is 100 percent unique, it's just that it happened at such a devastating level.

Heidi Ewing: There are also built-in racial divisions, with the highways and byways. It's a car-centric place, so you can divide black and white neighborhoods in a much more efficient way, so that it's very hard to get from one place to the next. And you're stuck with that.

That's another way that the races were divided in a very efficient way. It's not just emotional and psychological. In Detroit, that separation was strategic.

Rachel Grady: Another irony is that a lot of Detroiters don't have cars.

Heidi Ewing: The percentage is crazy high.

Rachel Grady: And the bus system — they're losing bus lines. In the movie, you see the woman pleading not to take her transportation away. Without the bus, you can't even go to your minimum-wage job. Every which way you turn, it's hard to live there, unless you have means.

Heidi Ewing: And even a very basic level of means.

Rachel Grady: Take a place like the Bronx, which has some persistent poverty issues even though the rest of New York City doesn't. They have public transportation. D.C. has this problem, east of the Anacostia, where it's hard to get into the city.

Heidi Ewing: It's always about will. Could a huge amount of investment come into Detroit and everyone get $5,000  to move? Are we going to bail out American cities? You can't liquidate a city and hire a new CEO, so is the government going to get into the business of federally bailing out cities?

The foundations are there for years — Ford, Knight, it is a hit list of foundations that are working in Brightmoor and trying to bring people into the city, so in a way it's become an NGO hotspot. It's going to take very radical measures to fix Detroit, and I haven't seen anything drastic and radical happen in this country in a long time. It's hard to see how this turns around. I really hope we're surprised.

Dylan Matthews: How insulated have the suburbs been from all of this?

Heidi Ewing: There's definitely been an uptick in crime in the suburbs in recent years. It's always going to permeate the suburbs, but it's pretty insulated, to be honest. Basically just a few of the bordering towns, like Southfield and Dearborn, and even maybe Ferndale — the closest suburbs to the city.

I think that their demographics have changed a great deal. Anyone who could leave has left. If you work for suppliers, like my father was, or as an engineer or lawyer, auto is still present there. A lot of houses went up for sale after the federal bankruptcy, but in terms of suburbs being affected by the goings-on in Detroit, not really.

One of Detroit's many vacant homes is demolished. (Loki Films)

Dylan Matthews: You joked that you can't hire a new CEO for a city, but Rick Snyder is sure trying with the city manager. What's been the reaction to that move?

Heidi Ewing: You've got the expected reaction, which is that the white Republican governor is trying to take this city over. It's no coincidence that Kevyn Orr is a black man, and that was a very smart decision.

The city is so weary that it wasn't a shock, and I think a lot of people are like, "Maybe this will fix it, since it hasn't been working the way things have been working." It's not an overwhelming, "We're mad, we're upset, he should leave." I would not characterize the majority as having that reaction.

If you live in Detroit, you're not shocked it went bankrupt. Only people outside are surprised. That would be my takeaway. I don't know, Rachel, if you think that's…

Rachel Grady: I think that it's kind of like what Heidi was saying in terms of "Will we end up with a federal bailout or not?" An emergency manager was put in by the state, who could override the city government, and he lost. So a federal bailout, that's totally looking to be the future. But if people do lose their pensions…

Heidi Ewing: …it's going to be a s---show. I don't think people saw that coming. I do not believe that Detroiters or anybody saw this coming.

Rachel Grady: A lot of places have that on the table. A lot of civil servants across the country are going to watch what happens there. As Tommy Stevens said, it's coming to you. That's the last line of the movie. Talk about the nail in the coffin of the American dream. That's really pulling the rug out from people.

Heidi Ewing: Think about it. You're risking your life as a policeman, knowing you're going to get a pension when you're done, and they deny you that — it's unthinkable.

Rachel Grady: For me, it's the beginning of a much bigger domino effect. I don't know how it can't spread to everyone in this country.

Heidi Ewing: How many cities would be psyched to say, "We don't have to honor that? See ya."

Rachel Grady: It's either going to play out as a cautionary tale or a blueprint.

Heidi Ewing: I believe this is dramatic. This is big. Whatever goes down here does matter. There have been a lot of news cycles about Detroit. "It's coming back. It's dead. It's alive." It's so crazy. One Super Bowl ad and everyone says Detroit's coming back.

It literally happened. We were making the film and showing it at festivals, and everyone would be like, "This is so negative, I thought it's coming back."

Rachel Grady: People who've never been to Detroit say it's pretty negative.

Heidi Ewing: Eminem says it's back!

Rachel Grady: We're not trying to be negative nellies.

Heidi Ewing: We were very careful in what we allowed on the screen, to make sure we aren't ghetto-gazing or being exploitative, so we've seen these crazy cycles. This is a big deal, though. It is unprecedented. The last big bankruptcy, Birmingham, there's 600,000 residents, but it was $3 billion. This is $20 billion. The scale is different.

Rachel Grady: The other bankruptcies, almost all of them are tied to one big, public work that failed. Jefferson County was about a sewer system that didn't happen, went over cost. This is pensions that are draining the city. A huge part of it is the pensions.

Heidi Ewing: It's down to the bone, so then the pensions do come into play. We'll see. I don't know. It's a big question mark what happens next.

Rachel Grady: Not to be trite, but you never know. This is America. Americans are amazing, they really are.

Heidi Ewing: Tree farm! Lumber yard! Wind factory! Maybe some crazy s--- will go down in the Northeast and it'll make so much more sense to build in Detroit. I don't know. Unlikely.

Rachel Grady: We're rooting hard for the city.

Heidi Ewing: We're going to keep tabs on everything that's going on there.

Rachel Grady: And our advice is that everyone should.

Heidi Ewing: This cycle will move on. It's going to be exiled to, like, page A21.

Dylan Matthews: One outside-the-box proposal I've heard is to create a special type of visa for people on the condition that they move to Detroit. How much would that do, do you think?

Heidi Ewing: This is Bloomberg's brilliant idea. He said that on "Meet the Press." He was like, if I could wave a magic wand, I'd say that any immigrant can come to the U.S. — as long as they move to Detroit. It's a crazy idea, but it's kind of a good one.

Rachel Grady: It's a lot of things at the same time.

Heidi Ewing: I think it's a great idea, not going to lie. Immigrants have made this country great. That worked before. Let's do that.

Rachel Grady: The part of the city that hasn't taken as big a hit is the area where all the Mexicans live, and they're still a tight community. They can buy products from Latin America, there's a sense of a buzz. Not to over-exaggerate, though. People keep talking about Mexicantown, it was more like a Mexican-a-few-blocks.

Heidi Ewing: It does have restaurants. It is the most healthy place in Detroit, other than Midtown, and it was built by immigrants. Of course, if we can even pass an immigration bill is one question. But why not?