Detroit is flush with cash nearly a decade after declaring bankruptcy, with hundreds of millions in pandemic relief funds available to spend.
The city received $827 million from the federal government over two installments in 2021 to address the consequences of COVID-19, which had a massive impact on Detroit’s economy and social fabric. Roughly 6% of Detroit’s allocation from the American Rescue Plan Act (ARPA) – or $52 million as of Dec. 19 – was spent in the first 18 months of the program. That’s enough to kickstart workforce development, housing stability, public safety and technology projects, but the pace of spending has raised some concern about whether Detroit is maximizing its rare funding opportunity.
Residents can track the city’s ARPA spending each week through an online dashboard. More about the programs, performance reports, open and approved contracts can be found on the city’s website.
There have been 78 projects implemented using ARPA funds, according to Detroit’s Office of the Chief Financial Officer. City officials say they’re planning to step up the spending in 2023, since any funds left over after 2026 must go back to the federal government. Mayor Mike Duggan’s administration has programmed 88% of the funds, which means most ARPA dollars are set aside for specific projects, even if they haven’t been spent yet.
A summer 2022 performance report outlines 43 of those projects, making note of Detroit’s recent history of financial hardship. Employment, private investments and poverty rates improved since the city’s 2013 bankruptcy filing. However, the pandemic caused steep job losses and exposed more Detoriters to the risk of eviction.
“Detroit’s residents experienced the impacts of austerity associated with a municipal bankruptcy, followed by a long and hard-fought recovery, only to have that recovery stalled by an extraordinary global pandemic,” the performance report states. “ARPA investments are an opportunity not only to address the direct harm caused by the pandemic, but also to mitigate the economic inequalities as well as educational disparities caused by decades of structural racism.”
Quarterly reports provide another look at the status of ARPA programs, which organizations are contracted to implement them and who is meant to benefit. The most recent report, released on Oct. 28, covers ARPA spending up to September 2022.
The City Council defined 15 ARPA-funded categories, partially based on public feedback from meetings and surveys over two months in 2021. These “buckets” represent a high-level look at Detroit’s priorities. Council members also received $500,000 to be shared evenly among their various offices each fiscal year from 2021 to 2024.
Here’s a look at how ARPA dollars have been distributed across the 15 spending categories:
Ruth Johnson, public policy director for the nonprofit Community Development Advocates of Detroit, said community organizations that received funds are making good use of the money. However, Johnson said she and her neighbors are left with many questions about Detroit’s process.
“There has been improvement in both how the administration and City Council has shared ARPA information with Detroiters,” Johnson said. “Some of those improvements have been upon the urging of community advocates like myself, but that is a good sign that they have been responsive to suggestions.”
The flip side, she argues, is “the city can and should be doing a better job of engaging Detroiters throughout the process.”
Johnson said the main way to get detailed information about an ARPA program is when a contract comes before the council for approval. She wants more opportunities for the public to weigh in, and earlier in the process. Johnson said she and some other residents find the funding categories confusing – what’s really the difference between intergenerational poverty 1 and intergenerational poverty 2, she asks.
One major point of interest among community development organizations, Johnson said, is a look at how well ARPA programs are working. The city is tracking the success of each using specific metrics reported to federal treasury officials. Regular performance reports show what the city expects to gain from each program, and how it will be measured, but the results weren’t ready for the latest report from last summer. City officials say Detroiters could see the results in an online dashboard by mid 2023.
“Is it better to have new business corridor projects such as parking lots, or look at how we can help current business programs expand or increase their reach?” Johnson said. “A surprisingly small percentage of money has been allocated for housing and community development.
“Given the housing crisis – both homeownership, for landlords, for renters, for homelessness – I would think many in the community would prefer that versus other uses, but what is the greatest need with the greatest impact?”
Detroit has limits on how it can use the federal cash. ARPA funds can only be spent to replace lost revenue, deal with negative impacts of the pandemic, pay frontline workers and make infrastructure investments. That covers a wide range of possible uses like cash assistance, improving school buildings, eviction prevention and more, according to the U.S. Treasury Department.
The city hired two companies to ensure compliance with federal rules about how ARPA dollars can be spent. The firms are paid with pandemic relief funds. AECOM Great Lakes, Inc. was awarded $15 million to provide compliance support and grant management services. UHY LLP received $1.5 to review those compliance determinations. Detroit also awarded a $1.27 million contract to Procurement Consulting Group, LLC, to work with city officials on the procurement of ARPA-funded contracts.
Meanwhile, the council is responsible for reviewing and approving ARPA contracts. The 2021 ARPA package states council members will continue meeting with Duggan’s administration about proposed changes to appropriations. Council members this year repeatedly called on Duggan to direct more resources toward affordable housing.
Duggan’s administration can suggest changes to the spending categories, which then require approval by the council, according to the CFO. Likewise, the council can’t make changes without a proposal from the mayor.
Detroiters saw that dynamic in action last summer, when the council asked Duggan to reprogram ARPA dollars to renovate Detroit Land Bank Authority houses and lease them to residents at below-market prices. Duggan wrapped aspects of that into a larger $203 million housing plan announced last summer.
BridgeDetroit compared publicly available information to create a list of ARPA programs, sorted into three basic categories: Economy, housing and community.
The two largest ARPA-funded contracts reported by the city went to Detroit Employment Solutions Corp., the city’s nonprofit workforce agency.
The organization received $16 million in August 2021 to manage Skills for Life, a workforce training program for unemployed Detroiters, through 2024. Skills for Life provides childcare subsidies, transportation and housing referrals alongside career tools to help residents obtain better-paying jobs.
City documents show another $58.9 million is budgeted for Skills for Life to provide direct employment, job training, and career-building activities.
Blight remediation is among the top priorities for Duggan, with $87.8 million in ARPA funds earmarked for the clean up of industrial and commercial properties for future development through his office’s Jobs and Economy Team. In September, demolition got underway for the dilapidated Packard Plant.
DESC received $15 million to manage the Community Health Corps, which seeks to alleviate poverty by connecting extremely low-income families to wrap-around services and another $3.5 million to administer the Adult High School Certification Program, which helps adults receive their diploma and connects them to career development services. That program is open to adults at least three years past their original high school graduation date. Participants get a stipend of up to $200 per week for up to 10 months.
A small business program has $15 million budgeted for entrepreneurship grants. This includes financial support and specialized training for things like real estate, business plan development and legal assistance. Up to 65 small businesses could be served by the program, which is similar to Detroit’s Motor City Match.
The city, as of September, spent about half of $12.5 million in ARPA funding for a two-year summer youth employment program.
Renew Detroit is among the largest direct-assistance programs Detroit is using ARPA funds for. It provides home repair money for 2,000 low-income seniors and residents with disabilities. The first round focused on roof replacements, while a second round opened in October allowing homeowners to replace windows. Detroit allocated $27.7 million in ARPA funds for Renew Detroit, with help with an additional $15 million in state funds.
Another $8 million in federal funding is planned to help residents cover down payments and closing costs to purchase housing.
Low-income renters and first-time homebuyers at risk of being displaced due to foreclosure or rent increases could receive help through a $7.2 million effort. The Single Family Home Ownership Preservation initiative will create a lease-to-purchase program. Another $2.7 million will be spent to advertise property tax foreclosure prevention programs.
The city is building resources to inform low-income residents about affordable housing, including a website of available listings. The $6.5 million effort should result in nonprofits working together to streamline the enrollment process.
A $4.9 million landlord repair program aims to help “small landlords” obtain certificates of compliance required to rent properties in Detroit.
Homeless prevention services are slated for $2.7 million in ARPA funds.
Parks and recreation projects are already underway, including $20 million for a 30-mile Joe Louis Greenway trail loop. A number of smaller ARPA-funded projects seek to renovate community spaces and recreation facilities. That includes $2.9 million to turn eight alleyways across the city into community spaces.
ARPA funds will pay for a new $12.1 million recreation center in Chandler Park on Detroit’s east side. The complex will consist of 12,000-square-feet of multi-purpose rooms, classrooms, and support spaces connected to a 150,000-square-foot athletic fieldhouse. Another $4 million in ARPA funds will help expand the Farwell Recreation Center and add a gymnasium and locker room.
Six parks – AB Ford, Balduck, Greenview Wadsworth, John R Watson, Rogell and Tireman-Minock – will see $5.9 million worth of playgrounds, landscaping, picnic shelters, parking areas and other amenities.
Roosevelt Park in Southwest Detroit, which sits directly in front of Michigan Central Station, is set to receive $5 million in improvements as Ford Motor Co. redevelops the former train station into a new electric vehicle and mobility innovation campus.
A $14.3 million “Blight to Beauty” program will fund maintenance of the city’s 14 major corridors and the removal of over 1,200 dead and dangerous trees.
Lee Plaza, a historic vacant building in the Northwest Goldberg neighborhood, will have 117 housing units built through a $7 million renovation project. The building is considered a key catalyst for the development of adjacent neighborhoods, and one the most iconic buildings in Detroit.
Up to 41 nonprofits that typically struggle to obtain federal grants could receive a share of a $3.5 million neighborhood opportunity fund.
Another $10 million is planned to fund public health services related to COVID-19 vaccines, booster shots and testing. As of September, $4.3 million was spent.
This money will dramatically change Detroit by the sound of it. I just hope that by 2026 we’ve got all that money spent and that we’re very much ready for the fiscal cliff we’re approaching in 2027 and beyond. That’s probably why the federal government gave us such a large chunk of money to begin with. They trust Duggan and his admin to get it done.
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