Detroit, other cities to get $100 million in federal funds to tear down vacant homes

Michigan will receive $100 million from the federal government to tear down thousands of vacant houses and clean up struggling neighborhoods in Detroit and four other cities.

The pilot program to address blight was approved Thursday by the U.S. Treasury Department, according to Gov. Rick Snyder.

The money comes from the Hardest Hit Fund and will be used in Detroit, Flint, Grand Rapids, Pontiac and Saginaw. The fund was created in 2010 to help states struggling through the economic and mortgage crisis.

“We will be stabilizing neighborhoods with a large-scale demolition of the abandoned properties that foster crime and push down property values,” Snyder said. “Getting rid of these properties will encourage more people to stay in their homes and be part of the effort to improve their neighborhoods.”

It isn’t clear how much money each city will receive.

Flint had more than 5,800 vacant homes and Grand Rapids over 2,700, according to estimates in the 2010 U.S. Census. Detroit has more than 30,000 vacant and abandoned houses.

Detroit Mayor Dave Bing has made it a priority throughout his term in office to tear down as many dangerous houses as available money would allow. He said Thursday that he hopes the city gets its fair share of the $100 million.

“This additional money will go a long way toward enhancing our blight removal program and increasing the number of vacant structures that we can knock down,” he said. “Currently, we are on track with our 4-year-old demolition plan to tear down 10,000 dangerous structures by the end of this year.”

Detroit – and Michigan itself – were among the most affected places by the national foreclosure crisis, as thousands of people lost their jobs and then their homes when mortgage payments could not be met. Left empty, the houses often become havens for drug use, prostitution and other crime. In Detroit, they have been used as dumping grounds for murder victims.

“Members of our team have learned as we’ve dealt with the foreclosure crisis that there is a direct link between foreclosure and blight,” said Scott Woosley, executive director of the Michigan State Housing Development Authority. “This program is a critical next step in ridding these areas of abandoned homes, blight and the resulting crime and safety concerns that continue to drain property values.” It had been unclear if state housing authorities could use the Hardest Hit Fund for residential demolitions, according to U.S. Rep. Dan Kildee, who earlier this year asked Treasury officials to expand use of the money.

Kildee, a Democrat from Flint, later introduced a resolution to reallocate the funding.

“Freeing up federal money to revitalize and invest in cities, including both Flint and Saginaw in my congressional district, will strengthen neighborhoods and unlock greater opportunity for all homeowners,” he said.