Detroit land bank funds at limit as inventory grows

Christine Ferretti
The Detroit News

Jonathan Pommerville spends his time and money battling blight that’s overtaken his northwest Detroit neighborhood.

Volunteer Luis Cuenca helps students from the University of Michigan with cleanup efforts along Grayfield in Detroit. Community groups often use their own funds to cut grass, remove blight and board up run-down properties.

The 38-year-old Brightmoor resident, who coordinates volunteer activity for Northwest Brightmoor Renaissance, contends community groups like his working to keep the city’s neighborhoods safe are often forced to use their own funds to cut grass, remove blight and board up run-down properties.

And they are tired of footing the bills.

Historically, ownership of the neglected homes has been mixed, involving the city, Wayne County and private parties. But in recent years, a growing number has been directed to the Detroit Land Bank, which has become a central repository for most city property, much of it inherited from the county foreclosure tax sale when properties don’t sell.

“I’d like them to focus a little bit more on the areas that are being neglected, like ours,” said Pommerville, whose group has boarded up more than 80 homes and cleaned more than 80 lots since it formed last year.

“The tools, hardware and volunteers are provided by community groups. We absorb all of the costs.”

The land bank’s portfolio has ballooned to about 97,000 over the last few years as Wayne County foreclosures and Detroit-owned residential parcels have been transferred to its inventory for various programs.

City Councilwoman Mary Sheffield is concerned about the land bank’s ability to maintain, secure and adequately keep up homes.

In a closing resolution tied to the council’s 2016-17 fiscal year budget, Sheffield crafted language stressing the need for additional dollars to expand maintenance for all land bank properties, including dumping, snow and debris removal.

“Owners of vacant properties are being cited or sued via the land bank nuisance program, but the land bank itself is in possession of blighted properties,” Sheffield said.

Sheffield said it’s unclear where more dollars could come from, but suggested the land bank examine its demolition and staffing costs.

Hardest Hit Fund

The public authority, which also gains ownership of some of the most neglected homes through a nuisance lawsuit program, is dedicated to returning vacant, abandoned and foreclosed property to productive use.

The land bank is governed by a five-member board, four mayoral appointees approved by the City Council and one member selected by the head of the state’s Housing Development Authority. Its financing is provided through channels including property sales, government grants, philanthropic support, donations and service fees.

Jonathan Pommerville, a Brightmoor resident, coordinates volunteer activity for Northwest Brightmoor Renaissance.

Since May 2014, more than 8,000 houses have come down in Detroit. The vast majority of the city’s demolitions — about 6,000 — have been paid for with federal Hardest Hit Fund dollars, said Craig Fahle, a spokesman for the land bank.

About 67,000 of the land bank’s parcels are vacant lots. Residential properties make up the roughly 30,000 remaining. Of those, about half can likely be salvaged. The others are beyond repair and must come down, officials say.

The city has received about $130 million through its first three rounds of federal hardest hit funding and last Monday learned of its latest award of $41.9 million for the first part of its fourth round.

By law, the federal funds can be spent only within designated areas, and in Detroit, they are confined to land bank-owned structures. The hardest hit boundaries are regulated by state and federal governments and focus on neighborhoods most densely populated and with the strongest markets.

The land bank has been limited in its ability to secure and maintain parcels in parts of Brightmoor, sections of neighborhoods in the city’s District 4, an east side district that borders Grosse Pointe and the Detroit River, as well as District 3 on the city’s northeast side, and others that aren’t currently covered under the federal program.

“Our hands are really tied with what we can or can’t do,” Fahle said. “It’s a resource issue. It’s not a lack of desire.”

But officials, Fahle added, have been working to expand the program and say a request to increase the hardest hit boundaries is pending with the federal government that would allow it to reach about 90 percent of the city’s population.

“Our goal is to demolish every house that needs to come down,” Fahle said. “We are hoping that over the course of time, people will see that we are going at a steady clip, and we’re making serious progress.

“We are putting a dent in a problem that nobody had a way to wrap their head around before.”

Zones expanded

The centerpiece of the Duggan administration’s plan to deal with an estimated 40,000 blighted properties throughout the city, the demolition program has averaged between 150 to 200 knockdowns per week.

Fahle said officials are hoping to take down another 5,000 houses citywide this year.

Under the first zones established in January 2014, about 21 percent of the city’s population was covered in the hardest hit area. That May, an expansion brought it up to just over 50 percent and, in January 2015, it was expanded again to cover about 80 percent.

Mayor Mike Duggan, during a recent community meeting in the city’s District 4, stressed to a crowd of residents the land bank has ended up with many long-neglected properties, including county foreclosures. Demolitions are taking place, as are side lot sales to neighbors, but the process isn’t simple, he said.

“We’re getting through them,” Duggan said at Burns Seventh-day Adventist Church. “It isn’t the land bank’s fault they haven’t gotten through 97,000 yet. They are headed in the right direction.”

Once houses come online with the land bank, they are assessed to determine if they will go into the authority’s home auction or demolition pipelines.

Philanthropic supporters have aided in projects to address blight in many city neighborhoods. In addition, the land bank has launched programs to get neglected lots into the hands of residents and crack down on neglectful property owners.

To date, the land bank’s side lot sale program has put 3,700 vacant parcels into the control of residents for $100 apiece. The program launched in 2014, around the same time as the city’s nuisance abatement crackdown.

Under the abatement effort, 1,213 property owners have reached consent agreements to fix up and occupy properties; 1,258 others were turned over to the land bank.

It maintains about 300 properties bi-weekly that are moving through the sales pipeline and secures windows and doors. The average cost per board-up is $35 per window and $75 for a doorway, according to a January report provided to the City Council.

After a home is demolished in the hardest hit area the land bank is allocated $150 per year for five years to care for each lot.

The land bank worked with the city’s General Services Department during the 2015 lawn maintenance year to have its vacant lots in the hardest hit areas cut three times. Areas not in the program were cut twice.

Detroit’s General Services also aids in the removal of dead or dangerous trees. Illegal dumping complaints are tended to by the Department of Public Works, officials say.

For at least a year and a half, district managers from the city’s Department of Neighborhoods have provided plywood and helped residents and neighborhood groups board up some of the vacant homes, said Darnell Adams, the land bank’s director of inventory.

“When we get complaints and we can’t necessarily get to them, (the managers) work with community groups, and they’ll go out and they’ll board those houses up as a courtesy, and we are extremely grateful,” Adams said.

Fahle also urges residents dealing with dangerous trees, illegal dumping or other activity on the land bank’s vacant lots to report it via the city’s Improve Detroit app.

‘We’re sinking fast’

Diane Hanks lives in Detroit’s Riverdale neighborhood, a small area that abuts Brightmoor. The community is now covered under the expanded hardest hit boundary zone, but Hanks hasn’t seen progress.

“We’re sinking fast,” she said. “I know the city lacks resources. We hear that all the time, but the residents just can’t do it.”

The average demolition cost in Detroit is about $13,900 per house. In 2014, costs under the hardest hit program were about $14,000 per home. By 2015, the average shot up to about $16,000 per house.

The soaring costs and questions surrounding bidding practices led to scrutiny last year. Officials have said that the increases had been tied to new environmental standards and protocols.

Meantime, resident groups on Detroit’s west side have banded together to mow lawns, maintain play yards and alleys, and board problem properties.

It’s a job they have been eager to take on, said Carol Pickens, community strategist for the Littlefield Community Association.

“We don’t argue, fuss and complain about things like that,” said Pickens, who is part of a districtwide partnership that’s had positive results with the city and land bank. “We are more about making a solution.”

Staff Writer Candice Williams contributed.