Detroit, Flint get more money for blight fight

Jonathan Oosting
Detroit News Lansing Bureau

Lansing — Detroit will receive $41.9 million in federal funding to fight blight and Flint $13.9 million under a $74.5 million state plan approved by the U.S. Department of Treasury.

Gov. Rick Snyder announced approval Monday and said the state will use 75 percent of its total federal award from the Hardest Hit Fund to boost blight elimination efforts in Detroit and Flint.

The other 25 percent — $18.6 million — will be used to support mortgage assistance programs. The state is expected to re-open next month its Step Forward Michigan online application portal.

“These funds have been critical in helping people stay in their homes and avoid foreclosure while helping Detroit, Flint and other cities across our state eliminate blight and revitalize neighborhoods,” Snyder said in a statement.

The federal government in February made a $2 billion commitment to the Hardest Hit Fund. Michigan may receive an even larger award — up to $323.5 million — when the second round of funding is announced later this month.

“Although Michigan’s unemployment rate is now below the national average and a great example of our state’s continued success, the importance of these HHF dollars on Michigan’s reinvention cannot be underscored enough,” State Housing Development Authority Executive Director Kevin Elsenheimer said in a release. “They will be greatly appreciated by the citizens and communities that may still be lagging behind.”

The Hardest Hit Fund was originally established to assist homeowners facing foreclosure in the wake of the Great Recession but was later expanded to allow spending on blight prevention.

Detroit has been a major beneficiary of the blight demolition program, begun in 2013, having secured $127 million through the first three rounds of funding, according to city officials.

“This is more great news for the city of Detroit’s blight removal efforts,” Mayor Mike Duggan said Monday in a statement. “Thanks to this new round of funding, we will be able continue our efforts to take down vacant buildings at a rate faster than anywhere in the county.”

Since May 2014, more than 8,000 houses have come down in Detroit through various funding sources. The vast majority of the city’s demolitions — about 6,000 — have been paid for with hardest hit dollars, according to the Detroit Land Bank Authority.

Duggan on Monday noted the city has applied for another expansion of its hardest hit zones.

Initially in Detroit, about 21 percent of the city’s population was covered in the hardest hit area. Later expansions brought it up to just over 50 percent and finally 80 percent.

“If this expansion is approved, more than 90 percent of Detroiters will live in neighborhoods that are eligible for demolition using these funds,” said Duggan, adding the city is looking forward to competing for even more dollars in the next round of awards.

In Flint, a city consumed with a lead-tainted water crisis, officials say the latest federal blight allocation is a great boost.

“We welcome any sources of revenue as we try to recover in the city of Flint and get things back on track,” Kristin Moore, a city spokeswoman said Monday.

Hardest hit boundaries are regulated by the state and federal government and focused on neighborhoods most densely populated and with the strongest markets.

States receiving additional funds through the program will have until Dec. 31, 2020, to use their Hardest Hit money — an extension from the current program’s expiration at the end of 2017. If the money is not spent in a timely manner, Treasury officials said they would periodically redirect unused funds to states with higher spending rates.

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 — more than $440 million since the fund was created in 2010.

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Staff writers Christine Ferretti and Melissa Nann Burke contributed.