The big news from City Hall is that Mayor Coleman Young is a papa.

Blood test results released earlier this month proved that Young is the father of 6-year-old Joel Loving-just as the boy`s mother, a former city employee, had contended in her paternity suit.

Young, a bachelor, celebrates his 71st birthday on Wednesday. Speculation about the outcome of the blood tests has kept Detroit`s newspapers and radio call-in shows atwitter for months.

''Honk if you`re Mayor Young`s son,'' says one bumper sticker seen around town. The Detroit Free Press recently invited readers to judge for themselves by publishing side-by-side baby pictures of the mayor and the child.

On Friday the mayor broke his long silence on the matter. Thanking reporters tongue-in-cheek for their advice and solicitude, Young acknowledged the child was his and said he was ''prepared to fulfill my full responsibilities in that regard.''

But Young`s personal life is not likely to hurt his political fortunes. He has been Detroit`s mayor for 16 years and is widely expected to seek and win an unprecedented fifth term later this year.

His campaign war chest is bursting with nearly $5 million in contributions, and his bumper stickers-with unintended double meaning-proclaim ''Forever Young.''

Throughout the 1980s, most of Detroit`s electorate was willing to concede Young the title of mayor-for-life. He appeared to be the master of a well-oiled political machine that looked unstoppable.

But lately the machine has shown signs of grinding down. Over the last two years, Young has failed to persuade voters to approve casino gambling in Detroit, and voters twice rejected bond issues to expand the downtown convention center, a pet project of Young`s. Several candidates he endorsed for the city`s school board and local judgeships-a number of them incumbents- were defeated.

Young is part of the historic first generation of black mayors who came to power in America`s big cities during the early 1970s. But within the last few years, a new generation has been pushing the old guard aside.

In Gary, for example, newcomer Thomas Barnes ended Richard Hatcher`s 20-year tenure as mayor. In Newark, N.J., Sharpe James defeated Kenneth Gibson, who had had the job for 15 years. And earlier this year, Los Angeles voters sent Mayor Tom Bradley a warning when they gave him only a narrow re-election victory over token opposition.

Detroit voters also appear ready for a change. Polls show that most would prefer that Young not seek a fifth term, but that if he chooses to run, they will vote for him.

''If there were a formidable challenger out there, the mayor would be in trouble. But right now I don`t see one, so I think he`s safe,'' said Wayne County Clerk Jim Killeen, a longtime Democratic insider.

Many felt Kenneth Cockrel, a lawyer and former city councilman possessed of a razor-keen mind and tongue, would have been a formidable challenger. He had long been seen as the mayor`s heir apparent, and at age 50, he seemed content to wait until Young retired.

But when polls showed the mayor`s vulnerability, Cockrel told friends in March he was leaning toward running this time. A month later, he was dead of a heart attack.

That leaves Tom Barrow, a 40-year-old accountant with little political experience, as Young`s only real worry. Barrow ran against Young in 1985 and managed to poll 39 percent even though he was a complete stranger to most Detroit voters before the race.

Since then, the TV-handsome Barrow has put together a credible political organization and worked to stay in the public eye. Barrow clearly is a long shot, but not one the mayor can casually dismiss.

Campaigning hard on his ''time for a change'' theme, Barrow is making Detroit`s deteriorating neighborhoods, rotten schools, middle-class flight and staggering crime rate into issues the mayor cannot easily duck.

''I give Coleman Young credit for developing downtown, and I give him credit for being our first black leader and blazing the trail for a lot of other black leaders around the country,'' said Barrow. ''The first black mayors enjoyed a kind of Teflon effect, but subsequent black mayors will be required to deliver.''

Unlike Young, Barrow downplays Detroit`s racial divisions, a strategy that appears to be helping him among white voters, who make up about 35 percent of the electorate. Ethnic whites, who feel neglected and alienated by Young, have not turned out in recent elections, but if the race tightens, a strong resurgence could give Barrow a critical boost.

A nonpartisan primary is scheduled for Sept 12, with the top two vote-getters moving on to the November election.

Meanwhile, the crusty Young seems to grow more isolated and autocratic as his power in City Hall becomes nearly absolute.

Members of his inner circle admit that Young, a habitual solitaire player, rarely hears a dissenting opinion and that he does not easily delegate authority.

''It`s not that I try and do everything myself,'' he told the Free Press in 1987. ''I just want to know about every goddamn thing. That`s being hands- on.''

But critics say that what began as a highly successful reform administration has been transformed over time into an entrenched, smug bureaucracy that is out of touch with the city`s problems.