Can Detroit’s latest plan to kill blight overcome the sins of the past efforts?
That’s the question Detroit voters face in November as Mayor Mike Duggan lobbies for a new $250 million bond, called Proposal N, to renovate an estimated 8,000 vacant homes and demolish 14,000 over the next four years.
On Tuesday, City Council voted to send the proposal to the Nov. 3 ballot. Last year, Council, after vocal community objections, rejected Duggan’s effort to get a similar bond proposal.
A bond essentially means the city will borrow the $250 million from Wall Street investors. The investors get paid back through tax revenue over time. City officials insist these bonds won’t result in higher taxes. Detroit voters will be asked to approve the city’s selling of the bonds.
“1 in 4 homes in Detroit has been subject to property tax foreclosure … We haven’t seen this number in American history since the Great Depression. So any blight bond that doesn’t put compensation at its center; compensation for these illegal assessments and then they were foreclosed upon at historic rates [should be rejected.]” — Bernadette Atuahene
Detroit’s has waged a war on blight for six years now, using $265 million in federal money. Since 2014, about 21,000 blighted structures have been demolished, and the Detroit Land Bank has sold 6,000 vacant houses to be rehabbed and occupied.
But the federal money is now gone. And the city is cash-strapped as the Covid-19 pandemic has wiped out $365 million in tax revenue, according to city officials.
Blight has been a persistent and enduring problem in the city of Detroit. It’s far too common to find scenes like one block of St. Clair Street on the northeast side.
The Detroit Land Bank Authority owns most of the block, according to city property records. That means the properties were lost due to tax foreclosure and are now controlled by the public agency. Among the Land Bank properties are three empty homes and one lot with a large hole filled with trash and weeds as tall as the two-story house.
“That house on the corner has been empty for 15 years,” said Kristal Leverett. She and her family have lived on the block for decades.
The properties were meant to be cleaned up and demolished the summer before the federal money dried up. But like most demolitions, they happen only when it is an emergency and could cause an immediate danger.
Leverett is not the only Detroiter who has lived next to empty and blighted properties for years. Five residents from different parts of the city told a City Council committee last week that they too live next to homes that have been empty for at least 10 years.
Proposal N is Duggan’s second attempt at an initiative to continue demolition in Detroit. His first proposal last year didn’t make it past City Council. The council needs to approve it before going on the ballot.
The first bond proposal became a forum for all the charges of corruption, favoritism and incompetence that have dogged the blight program so far. It also came at time of a devastating revelation that tens of thousands of Detroit homeowners were vastly overcharged in their city property taxes between 2010 to 2016, according to a Detroit News investigation.
“The sweet spot in this proposal calls for vocational training that yields employment opportunities. Any increase in those kinds of jobs and opportunities for Detroit really means a chance for upward mobility for so many,” — Charles Bailey
Homeowners paid a total of at least $600 million more than what they should have; individual homeowners were overcharged an average $3,700. Thousands lost their homes in foreclosure over the inflated taxes.
In the early 2000s, Detroit had one of the highest Black homeownership rates in the country. Now it is a city of mostly renters, according to an Urban Institute report from 2018.
The Detroiters who experienced foreclosure due to inflated taxes should have first priority to the homes the city says can be saved, several critics of Proposal N contend. Among those critics are Bernadette Atuahene. She’s a law professor who contends that policies on tax foreclosure results in Detroit being a “predatory city”
- As Michigan’s ban on property tax foreclosures expires, some in Detroit fear a new wave of people losing their homes
- Expect budget cuts in Detroit, city services impacted by coronavirus pandemic
- Resources to avoid property tax foreclosure for Detroiters
“One in four homes in Detroit has been subject to property tax foreclosure,” Atuahene said. “We haven’t seen this number in American history since the Great Depression. So any blight bond that doesn’t put compensation at its center; compensation for these illegal assessments and then they were foreclosed upon at historic rates,” should be rejected. A group that backs her stance is the nonprofit Coalition for Property Tax Justice.
State Rep. Sherry Gay-Dagnogo (D-Detroit) was a vocal critic of Duggan’s earlier bond proposal. She’s still reviewing the current proposal and hasn’t taken a stance. “What people need to pay attention to are the details for the accountability of money. There must be strong oversight,” to prevent further corruption and incompetence. Duggan’s earlier proposal still left too much potential that contractors could overcharge the city for work, she said.
Last summer, a contractor mistakenly demolished a house that was owned by a firm controlled by Gay-Dagnogo. The property was bought from the city land bank. “It’s my understanding absolutely nothing happened to him. He didn’t get prosecuted, he still has license to operate,” she said.
But the new proposal seems to have gained favor of many community groups and other residents who want more control in what happens to blighted homes in the neighborhoods.
Some key details in Proposal N:
Give preference to Detroit residents to acquire and reuse the properties in their neighborhoods.
It proposes partnering with Detroit Community Development Organizations, CDOs and other qualified groups to renovate homes and redevelop property in the neighborhoods.
CDOs are nonprofits that focus on improving specific neighborhoods. Many groups consider it a big step forward to participate more actively in the process of renovating up to 8,000 vacant homes.
“I’m glad the city has listened to community organizations and made these changes,” from the previous proposal, said Phyllis Edwards, executive director of Bridging Communities. The nonprofit is part of Detroit 21, an alliance of CDOs in the city.
“This is only one tool in the tool chest,” Edwards said. “We did not get here overnight in this housing crisis. We won’t get out of it with just one. But this is a plan to help us start to rehab and eliminate some of the blight.”
During the City Council meeting Tuesday, at least a half-dozen residents who said they represented various community groups spoke in support of Proposal N.
“It has been just short of Hiroshima over here as far as the blight goes,” said Kecia Escoe, a Nardin Park resident, to City Council Tuesday. She also owns a quilting business called Umi’s Comfort. “I am in support of N, and we will do whatever we can in this area to assist with that.”
More emphasis on hiring Detroit companies and Detroit workers.
There is a goal to have more than 50 percent of all work be done by Detroit certified companies. And those companies should have a workforce of at least 51% of Detroiters.
Of the 49 demolition contracts awarded through May, 2020, about 86 percent have gone to companies that are Detroit certified, city officials said
“This could be a great source of generational wealth because there’s a lot of opportunity for small contractors,” said Damian Ellis, director of operations at Gayanga Co., a Detroit-based construction company.
The proposal’s emphasis on renovations rather than demolition could translate into more jobs for Detroiters, said Charles Bailey, CEO of Lake Star Construction Services in Detroit.
“The sweet spot in this proposal calls for vocational training that yields employment opportunities,” Bailey said. “Any increase in those kinds of jobs and opportunities for Detroit really means a chance for upward mobility for so many,” he said.
After the City Council victory — a narrow approval with a 5-4 vote — Mayor Duggan issued a statement emphasizing the potential for more jobs and the goal of ridding the city of blight.
“I’m very pleased that the City Council today allowed Detroit voters to decide whether to renovate every house we can and rebuild our neighborhoods,” the statement said.