Mayor Duggan pledges blight-free Detroit neighborhoods by 2024
Detroit Mayor Mike Duggan is planning to ask voters to support a $200 million bond issue next spring to wipe out the city's blight by the end of 2024.
Duggan announced his plans Thursday morning during his keynote address at the annual Mackinac Policy Conference on Mackinac Island.
"We're going to take down 4,000 houses a year, and in five years by the end of 2024, we will not have a single abandoned house in any neighborhood in the city of Detroit," Duggan said to applause.
The city is positioned to post its fifth balanced budget and has paid down so much of its debt, Duggan said, "we could actually sell this bond issue with no tax increase."
Detroit has paid its back debt of schedule because revenues have been running higher than projections made during its bankruptcy. All the city will be asking voters to support is the authority to borrow off of its existing bonding capacity.
The mayor earlier in his address touted Detroit's progress with about $265 million in federal blight elimination dollars that has aided it in knocking down about 18,000 properties since spring 2014 as part of a massive demolition program.
Right now, he said, there's enough federal funding to take the city into the early part of 2020. The city, Duggan said Thursday, still has 18,000 more to take down.
"I have an obligation to every one of those families in every one of those (remaining) neighborhoods," he said.
Duggan said the city has other sources of funding for blight, including in Detroit's bankruptcy plan of adjustment. But the $200 million bond, if approved, would "get us most of the way there" in tending to the remaining 18,000 blighted residential structures, he told reporters after the speech.
Under federal rules, Duggan said, blighted houses had to come down. But under the city's own rules, they'll be able to use some of the funding to renovate them.
Detroit's demolition program has been the focus of state, local and federal reviews after concerns were raised in fall 2015 over bidding practices and spiraling costs.
In April, a federal investigation secured guilty pleas from two men as part of a lengthy criminal investigation into the demolition program.
The U.S. Department of Justice has signaled it doesn't expect to bring more charges against public officials for wrongdoing in the federal blight aid effort.
During his March budget address to Detroit's City Council, Duggan said the city will look toward a transition this fiscal year from a demolition effort controlled by the Detroit Land Bank Authority to a city-administered effort.
The city was provided $50 million per year toward demolition under its bankruptcy Plan of Adjustment.
The mayor said that he's had "very preliminary discussions" with council members about the bond proposal. He expects to send something to the panel in September.
"We're showing them that we can raise $200 million plus," Duggan said. "We can meet our other capital needs without raising taxes because our revenues and finances are running way ahead of schedule."
Detroit's Chief Operating Officer David Massaron said the city's debt-cutting plan had anticipated that all of Detroit's capital projects would be funded with surpluses. It didn't anticipate the city would have access to the borrowing markets as soon as it did.
Massaron said the 2019-20 budget adopted by the city council put "significant resources into blight."
The bond proposal is in its infancy and would require the approval of Detroit's council to go on the ballot. It would likely be a measure that would be paid over 20 or 30 years.
The hope, Duggan said, would be to have the issue appear on the March 2020 presidential election ballot.
"We would say to the voters 'would you like to have every abandoned house removed from the city with no new taxes,'" he said.
Massaron said officials are confident based on conservative estimates that the tax rate long term won't exceed the rate of 9 mills that's expected this year, which is up from 7 mills last year, he said.
Under state law, the levy has to be set sufficiently to pay the debt.
"We believe it won't be above nine (mills) and the ballot language will say that," he said.
The average taxable value for residential property in Detroit is $19,100, which at 9 mills, would be $171.90 per year.
Resident Angy Webb doesn't take issue with the prospect of a bond. But Webb, who is president of the Joy Community Association on Detroit's northwest side, said some streets in her neighborhood already are sparsely populated in the aftermath of demolition. She wants some assurances that as more houses come down, there's thought put into what will go up in their place.
"If you're going to tear down a lot of houses, you need to have something to replace those houses," she said. "Otherwise, you have streets that are more like farmland. That's not good at all
Eastside resident Jackie Grant, who is involved in a project that's knocking on the doors of some 65,000 residents at risk of foreclosure, said a bond issue is not the way to go.
Grant, who is president of the MorningSide community association, said while the mayor says that the bond wouldn't translate into higher taxes, it's "hard for me to believe" and "I don't think it's worth the risk."
"That would be a negative for the 65,000 homes that are already having issues," she said. "I just think we'd go down a rabbit hole like that."