Washington — The year-end spending bill under consideration by Congress would allow the U.S. Treasury to transfer up to $2 billion more to the fund that helps cities such as Detroit and Flint combat neighborhood blight.
“We certainly expect tens of millions of dollars — at least — coming into Michigan” as a result of this, U.S. Sen. Debbie Stabenow, D-Lansing, said on a Thursday call with reporters.
The omnibus legislation would potentially be a major boost for the Hardest Hit Fund mortgage program, which was created for mortgage aid to help homeowners avoid foreclosure and has helped demolish thousands of vacant buildings in Michigan communities.
Under the provision, the Treasury Department would have until the end of 2017 to transfer unused funds from the Home Affordable Modification Program, which expires at the end of 2016.
When and how much of the $2 billion is transferred will be up to the Treasury Department, Stabenow said. She said money will still be available for individual homeowners through the Home Affordable Modification Program, which helps struggling homeowners avoid foreclosure by modifying loans to an affordable level over the long term.
“These were separate funds, set up as silos,” Stabenow said. “The key was that Treasury didn’t have the authority to transfer — to access funding that frankly is currently not being used and might not be used at all, while we have this huge demand in another part of housing.”
Rep. Dan Kildee, D-Flint Township, raised the possibility of transferring unused resources from the Home Affordable Modification Program (HAMP) with Treasury Secretary Jack Lew in March during a hearing of the House Financial Services Committee.
“We felt the programs were out of balance,” Kildee said in an interview. “The HAMP program was beginning to wind down, and the thought was that we should put the money where the overall need is.”
In the past, about half of the money allocated for blight removal has gone to Michigan and Ohio. About two-thirds of that amount is spent in Michigan — $498.6 million since the fund was established in 2010.
Stabenow, Kildee and Sen. Gary Peters, D-Bloomfield Township, led a bipartisan effort to negotiate the transfer and include the provision in the year-end bill, which would fund the federal government through September 2016.
Stabenow said the success in Detroit in particular, where some neighborhoods saw housing values increase significantly, “really helped us make the point.”
She was referring to an October report by the Skillman Foundation, Rock Ventures LLC and Dynamo Metrics, which found that the valuations of homes within 500 feet of demolition funded by the Treasury’s Hardest Hit Funds increased an estimated 4.2 percent.
Single-family home values within Hardest Hit Fund Zones — even areas not directly adjacent to demolitions — experienced values increases by up to 14 percent.
Peters stressed that the new option to shore up the Hardest Hit Fund will allow Michigan communities to continue the program’s success and attract new private investments to help communities grow.
“Urban areas all across the state of Michigan will now have additional funding available for what is an absolutely critical economic development tool in eliminating blight,” Peters told reporters.
“If you’re going to get people to move back into the areas, particularly the neighborhoods, you have to get rid of the buildings that need to be torn down.”
Metro Detroit cities that have benefited from the program include Ecorse, Hamtramck, Highland Park, Inkster, Pontiac and River Rouge.
Gov. Rick Snyder’s office has supported the effort and been in contact with the Senate and House leadership, along with congressional members. “Blight demolition efforts can play an important role in making our cities safer,” Snyder spokesman Dave Murray said.
Rep. John Conyers, D-Detroit, noted that more than 28,000 Michiganians have received assistance through the program, including nearly 9,000 residents of Wayne County.
Other cities across the state that received the aid are Adrian, Flint, Grand Rapids, Ironwood, Jackson, Lansing, Muskegon Heights, Port Huron and Saginaw.
The omnibus bill also includes $1.25 billion in funding for dredging through the Harbor Maintenance Trust Fund, which will help harbors large and small in Michigan.
Peters said he also worked to include $411.8 million in funding to upgrade the Stryker armored vehicles deployed in Europe, including $97.5 million for research and development on cannon upgrades and $314.3 million to install the cannons on the vehicle.
General Dynamics Land Systems in Sterling Heights is the research and development contractor for the Stryker program.
Rep. Candice Miller, R-Harrison Township, highlighted a provision of the omnibus package that would block any funds in the bill from being used to “divest, retire, transfer or place in storage or on backup-aircraft inventory status,” or prepare to divest any A-10 aircraft.
The Air Force has proposed retiring over five years the A-10 Thunderbolt attack plane — of which there are 18 at Selfridge Air National Guard Base.
The bill language prohibits the military from attempting to “disestablish” any units of the active or reserve component associated with such aircraft, which would include the 127th Wing at Selfridge.
Miller said the omnibus includes $144 million in additional funding next year to maintain the fleet, purchase additional ammunition and make avionics software upgrades.
“I believe the A-10 provisions included in the omnibus package before the House serve as an overdue acknowledgment of the critical role this aircraft — as well as the talented men and women who maintain and operate it — plays in our national defense,” Miller said in a statement.