April 9, Detroit Mayor Mike Duggan announced that owners of 79 vacant homes in the Marygrove neighborhood will have three days to make arrangements to fix up their homes before the Detroit Land Bank Authority auctions them off to new homeowners. This marks the beginning of the mayor’s ambitious plan to target blight across the city. The plan was realized with the help of Talmer Bank, which will offer each bid-winning homeowner $25,000 of forgivable loans at the rate of $5,000 to be forgiven each year the owner lives in the home, for a maximum of five years. This proposal is worthy of praise. It’s an efficient form of blight removal and control because it maintains salvageable homes and also works with community members to guide the process.
Currently, blighted properties drive down the prices of the surrounding houses and neighborhoods, don’t generate tax revenue for the city and jeopardize the safety of the surrounding area. This new program aims to combat many of these issues, while also stimulating the rehabilitation of clearly salvageable properties in an important area of Detroit — Marygrove College, University of Detroit Mercy and Sinai-Grace Hospital are all in the neighborhood — with a free incentive to new homeowners. In the future, this new plan will serve to increase neighborhood safety, generate tax revenue and drive up the property values in the neighborhood.
However, Detroit must be cautious of the fact that not all homeowners of abandoned houses have left them intentionally, and that this program shouldn’t have an agenda to push new homeowners into the area while pushing community members out. In order to ensure that current homeowners receive adequate help and information in retaining their homes, the city should reach out to residents at risk of losing their homes and provide them with preventative assistance and help in acquiring control of their foreclosed homes. Furthermore, though the Detroit homes are salvageable, the Talmer Bank loans of $25,000 each may not be sufficient for full reparation. In the future, larger loans may be needed to fully incentivize homeowners to make the necessary repairs. Other land banks within the area — many of which are already involved in some sort of corporate giving in Detroit — should also partner with the city to help expand the scope and scale of the loans.
Duggan’s plan is a step in the right direction — many other cities such as Minneapolis and Baltimore have implemented similar programs to combat blight. A similar measure has been taken in New Haven, Conn., with the formation of a task force called Real Options Overcoming Foreclosure.
Blight removal is a major stepping-stone in the revival of Detroit. Duggan’s plan for forgivable loans will drive up property value, incentivize migration into the city and expand the tax base. Both Duggan and Republican Gov. Rick Snyder must help expand this program to a larger scale.