Back in June, the U.S. Department of the Treasury had announced that five Michigan cities had been approved for a total of $100 million in federal assistance for blight elimination under a pilot program called the Hardest Hit Fund.
Gov. Rick Snyder has now announced that Detroit alone will get $52.3 million under this program for funding large-scale demolition of abandoned properties that will help stabilize neighborhoods, fight crime and preserve property values.
The remaining four cities will get $37.4 million, with $10.2 million being held in reserve for additional demolition projects and unforeseen costs.
Out of the $37.4 million, the City of Flint will get $20.1 million. Grand Rapids will get $2.5 million, while Pontiac gets $3.7 million and Saginaw $11.2 million.
The $7.6 billion Hardest Hit Fund (HHF) was created in 2010 under the Troubled Asset Relief Program (TARP). HHF provides assistance to the 18 states (and the District of Columbia) that were hardest hit by the 2007-08 housing crisis.
The funds are provided to each state’s housing finance agency, which then designs and administers programs using these funds to help improve the housing market and assist homeowners who may have lost their employment and are struggling to hang on to homes whose values have dropped below what they owe on the mortgage.
In this case, the Michigan State Housing Development Authority (MSHDA) is routing the federal funding through their Step Forward Michigan Program, which has already established several programs to stabilize the state’s housing market and reduce foreclosures.
The $100 million in federal funding to eliminate blight will be part of this effort to further enhance neighborhood recovery in areas already being targeted under Step Forward Michigan.
MSHDA Executive Director Scott Woosley said their experience in responding to the housing crisis had taught them that there was a direct link between blight and foreclosure. He said they had sought to modify the program and include blight elimination because it made for a more holistic approach to helping communities that were hardest hit recover.
Officials from Detroit and the other four cities worked with MSHDA’s team to pick neighborhoods and properties that aligned with the HHF program’s goals. The award amounts were calculated using a formula that took into consideration vacancy and blight elimination data.
Treasury Under Secretary for Domestic Finance Mary J. Miller said this program seeks to prevent foreclosures by tackling blight in a way that has never been done before. She said they were proud to work with Michigan’s leadership for the program’s rollout, and hoped it would contribute in a broader way for revitalizing the communities where it is being implemented.