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Snyder announces distribution of $100 million in federal funds to fight blight in five cities

Tuesday, August 20, 2013

LANSING, Mich. – Gov. Rick Snyder announced today that Detroit will get $52.3 million in federal funds for blight removal and approximately $37.4 million will go to four other Michigan cities to fund large-scale projects to stabilize neighborhoods, preserve property values and fight crime.

The governor announced in June that the U.S. Department of the Treasury approved $100 million for anti-blight efforts in Detroit, Flint, Grand Rapids, Pontiac and Saginaw through the Hardest Hit Fund. While Detroit will get about half of the funds, Flint will get $20.1 million; Grand Rapids $2.5 million; Pontiac $3.7 million, and Saginaw $11.2 million. About $10.2 million is being held in reserve to tear down additional abandoned properties that may become eligible for demolition during the pilot program and for unanticipated project costs.

The targeted demolitions represent a major expansion of an ongoing effort by the Michigan State Housing Development Authority (MSHDA) and other state partners to aggressively address blight in Michigan.

“With these federal funds, we’ll be able to launch large-scale demolition programs that strike at the blight that is weakening too many neighborhoods in these cities,” the governor said. “This aggressive anti-blight effort will help stabilize neighborhoods that have been struggling for years. As the abandoned properties come down, property values will go up, and crime will go down.  That will encourage the people who live in these neighborhoods to stay in their homes and be part of the revitalization of their communities.”

Step Forward Michigan, administered by MSHDA, has established several programs to steady the state’s housing market and curb foreclosures under the Troubled Asset Relief Program. The Hardest Hit Fund was created under that federal law in 2010. The $100 million blight elimination program has been designed to further enhance neighborhood recovery in these targeted areas.

“Our experience in responding to the foreclosure crisis taught us that there is a direct link between foreclosure and blight. We sought to modify the program to include blight removal because it offered a more holistic approach to helping our Hardest Hit communities recover,” MSHDA Executive Director Scott Woosley said. “We have greatly appreciated the governor’s leadership on this issue and the federal, state and local partnerships that have been forged during this process.” 

MSHDA’s team worked with officials from the five cities to pick the neighborhoods and properties that align with federal Hardest Hit program goals, to identify local resources needed and their availability, and to establish a timeline for the work.

They used a formula that weighed vacancy and blight elimination data, among others, to arrive at the award amounts. They then reviewed community plans to determine the amount requested, available pool of qualifying property and administration capabilities. Modifications to the formula award were then made accordingly.

“Neighborhoods across Michigan that have been struggling with the damaging effects caused by vacant and abandoned properties will soon see the benefit of these federal funds,” said Treasury Under Secretary for Domestic Finance Mary J. Miller. “The launch of this program seeks to prevent foreclosures by addressing blight in a way that has never been done before. We are proud to work with the leadership in Michigan on its rollout and hope it contributes in a broader way to the revitalization of these communities.”

Woosley explained that while this money has been set aside to address needs in five hardest hit cities, the program will be part of an ongoing MSHDA and state effort to spread demolition resources throughout Michigan.

“This new program is a critical next step in reducing blight in our urban areas, but it cannot be the last,” he said. “As our team worked on the program’s development we quickly recognized that the problem is much larger than the funding streams that, so far, have been dedicated to address it. We are hopeful that successful implementation of this pilot program will lead to more dollars being accessible, allowing us to continue this critical work for the people of Michigan.”

Demolition work is scheduled to begin later this month in Detroit and within several weeks in the other cities.

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