Rep. Kildee says funds for blight, foreclosure relief will help neighborhoods
posted on April 21, 2016 1:50pm
WASHINGTON, D.C. — The scale of the fight against blight in Saginaw and other Michigan’s cities, strengthened since 2013 by a major infusion of federal funding, is about to get a whole lot bigger.
The U.S. Treasury has authorized the state to spend about $188.1 million from the Hardest Hit Fund on blight reduction mortgage relief efforts in Michigan, according to information released by federal officials Wednesday, April 20.
That effectively doubles the resources already in hand that could be used to clear away blighted homes in Michigan’s urban cores, according to U.S. Rep. Dan Kidlee, D-Flint Township.
“Obviously, that is a big boost,” Kildee said. “This will help, in terms of communities trying to rebuild their local economies.”
The congressman — who represents all of Bay and Genesee counties and parts of Saginaw County — is a key advocate of blight elimination efforts in the state, dating back to his term as treasurer in Genesee County.
After years of work chipping away at issues with blight in his hometown of Flint and elsewhere across Michigan, Kildee said it feels good to have helped secure such a large chunk of funding for the effort.
“I’ve been working on this since 1999,” he said. “Congress really helped me bring it to a scale that is equal to size of the problem.”
Michigan’s $188 million share is part $1 billion in funding approved nationwide. Of the allocations, Michigan claims the largest portion.
There are two reasons for that, according to Kildee.
“We have a demonstrated need,” Kildee said. “We have communities like Flint, like Detroit that have significant blight that is standing in the way of efforts to rebuild both of those places.”
The other reason Michigan is receiving the largest amount, he said, is because the state has demonstrated “the capacity to spend this money and to spend it really well.”
“In Michigan we have a demonstrated track record of being able to do it,” Kildee said.
Michigan has already spent about $130 million to demolish thousands of blighted homes in five communities — Detroit, Flint, Saginaw, Pontiac and Grand Rapids —and received authorization earlier this year to spend $55.8 million more on demolition projects in Flint and Detroit.
Michigan received a $74.5 million share of $1 billion in Hardest Hit funds released nationwide. Of that total, $55.8 million went to the blight removal projects in Detroit in Flint and $18.7 million of went to support mortgage assistance programs.
In that most recent allocation, Detroit received $41.9 million for blight removal and Flint received $13.9 million.
Michigan’s $74.5 million was the first phase and the $188 million the second phase of $2 billion in Hardest Hit funding released by Congress, after efforts by Kildee and U.S. Sens. Gary Peters and Debbie Stabenow.
Including the new funding, Michigan has received a total of $262.59 million from the Hardest Hit Fund this year.
The Hardest Hit Fund was developed under the Troubled Asset Relief Program signed into law by then-President George W. Bush in 2008 in response to the subprime mortgage crisis. It was initially devoted to mortgage-relief programs, but was opened up for use on blighted home demolitions in 2013.
Since 2010, Michigan has used $440.8 million from the Hardest Hit Fund to assist homeowners, remove blight and support other efforts to revitalize neighborhoods.
How the new $188 million will be divided among different programs and between Michigan’s communities is yet to be determined by the Michigan State Housing Development Authority, Kildee said. But he said he expects a “heavy emphasis” will be placed on blight-elimination efforts.
Major benefits of blight elimination, Kildee said, include making the community more attractive to residents and potential developers and can ultimately result in higher property values, lower crime rates and improved local economies.
“It’s a part of giving these communities a chance,” he said. “A chance to compete in the 21st century.”
Early reviews of the projects funded through the 2013 grants indicate the effort has positively impacted crime rates and property values in the communities.
According to a two-year study by the Land Policy Institute at Michigan State University, $3.5 million of demolition activity in Flint unlocked $112 million in improved property values for surrounding homeowners.
But there is less-quantifiable benefit that has been seen in the cities that started knocking down houses in 2013.
“To me, the biggest benefit always has been improving the quality of life for people living in neighborhoods,” Kildee said. “When they wake up in the morning and go out on their porch with a cup of coffee, what do they look at? Is it a burned-out house that has been sitting there for years? Or is it a community garden or a playground.”
For residents, the feeling that they live in “a community that is intentional” can impact their point of view and start a domino effect of positive change, the congressman said.
The new funding announced Wednesday could start flowing to communities granted access to the funds within six to eight weeks. It’s not clear yet which communities will qualify.
The $188 million is likely the last funding for blight elimination that will come from the Hardest Hit Fund, Kildee said.
But he said the fight to remove blight and rebuild cities like Detroit and Flint is by no means over.
“We will continue to look for every way and every source we can find to rebuild these great old cities,” Kildee said.
He acknowledged that demolition of houses is really only a first step. The positive changes that come after, Kildee said, are the ultimate goal.
“It starts with moving away the reminders of past failures,” he said. “Demolition is not the goal. Quality of life is the goal. Rebuilding these older communities is the goal. But we can’t get to the next step until we clean up what is there now.