LANSING, Mich. - Gov. Rick Snyder announced that five Michigan cities have been approved to receive $100 million for blight elimination efforts under a pilot program approved today by the U.S. Department of the Treasury.
The demolition funds will be used in the cities of Detroit, Flint, Grand Rapids, Pontiac and Saginaw.
"This will be a major expansion of an ongoing effort by the Michigan State Housing Development Authority and other state partners to aggressively address blight," Gov. Rick Snyder said. "We will be stabilizing neighborhoods with a large-scale demolition of the abandoned properties that foster crime and push down property values. Getting rid of these properties will encourage more people to stay in their homes and be part of the effort to improve their neighborhoods."
"Neighborhoods across Michigan continue to struggle with the damaging effects caused by vacant and abandoned properties, which hurt home values and weaken efforts to revitalize communities," said Deputy Secretary of the Treasury Neal S. Wolin. "The Hardest Hit Fund is a federal program that enables states to take the local actions that they determine will best prevent foreclosures and strengthen the housing recovery. With these federal dollars, Michigan will launch a program to address neighborhood blight to help communities hit hard by the crisis and contribute to broader efforts under way."
"Today's announcement that Michigan will receive $100 million in federal funds to clean up blight in communities across the state is welcomed news," said Congressman Dan Kildee (D-Flint). "Freeing up federal money to revitalize and invest in cities, including both Flint and Saginaw in my congressional district, will strengthen neighborhoods and unlock greater opportunity for all homeowners. Since being sworn into Congress, one of my top priorities has been to secure this money to ensure cities and towns have the resources necessary to remove and repurpose abandoned homes. I'm pleased that the partnership between my office, the State of Michigan and the Treasury Department has resulted in millions of dollars in much-needed funds."
Step Forward Michigan, administered by MSHDA, has established several programs to steady the state's housing market under the Troubled Asset Relief Program. The Hardest Hit Fund was created under that federal law in 2010. The $100 million blight elimination program will be designed to further enhance neighborhood recovery in these targeted areas.
"Modifying the program to add blight removal offers a more holistic approach to helping our Hardest Hit communities recover," said MSHDA Executive Director Scott Woosley. "Members of our team have learned as we've dealt with the foreclosure crisis that there is a direct link between foreclosure and blight. This program is a critical next step in ridding these areas of abandoned homes, blight and the resulting crime and safety concerns that continue to drain property values. Inaction only would lead to more people walking away from their homes."
While this money will be set aside to address the needs in five of the hardest hit cities, the program will be part of an ongoing state effort to bring resources for demolition statewide. Recent programs include NSP1, NSP2, CDBG and most recently, the $25 million in foreclosure settlement funding. Woosley said MSHDA will continue to pursue funding opportunities to deal with any outstanding needs.
Snyder said there also are other opportunities for the state to step up its fight against blight, including a proposal now pending in the Legislature that would bar individuals with unpaid taxes or who own blighted houses from buying more property at auction. The bill, SB295, would prevent speculators from degrading good neighborhoods and encourage current owners to prevent blight by cleaning up their properties.
All of the Step Forward programs will continue to focus on and support foreclosure prevention across Michigan.
In addition to reducing crime in neighborhoods, blight reduction is expected to provide a fiscal boost to each city and its surrounding county.
"One of the objectives of this new program is to improve the tax base of each of the target cities," said State Treasurer Andy Dillon. "Since reducing blight has been known to increase property values within communities, this program will eventually translate into increased property tax collections. Additional revenues for these five cities will help ensure citizens receive the critical municipal services they need and expect."
Some processes and procedures still need to be established. MSHDA will work with the U.S. Treasury and in concert with the five cities to hammer out those details. Demolition projects are expected to be under way this summer.