Detroit Resumes Blight Removal Program, Receives $42M in Funding

The procedures for the implementation of the program have changed after a two-month assessment by the MSHDA at the Detroit Land Bank.
Hardest Hit Fund Areas in Detroit

Hardest Hit Fund Areas in Detroit

Detroit—The city of Detroit is picking up its extensive blight removal program, two months after it was suspended following a Michigan State Housing Development Authority (MSHDA) review. Motor City has also received $42 million in federal funds for the initiative, the first installment of a $130 million allocation.

The assessment brought on changes in the implementation procedures of the program sponsored by the Hardest Hit Fund (HHF). From now on, two MSHDA employees will be housed at the Land Bank and Detroit Building Authority to provide real-time compliance support, input on process improvement and on-site assurance that all demolition contracts are bid appropriately. Also, bid packages will not include more than 50 houses and contractors will be obliged to disclose the names of all their subcontractors and limit their markup work to no more than 10 percent.

In addition, there will be regular quality control audits. As part of the new procedures, the Land Bank has established a $5 million escrow account fund to assure payment of demolition costs not eligible for HHF funding.

“We are the most successful city in America in the speed of blight removal, but we have not been the most successful in developing the kinds of controls a program of this size needs. Today we’re fixing that,” Mike Duggan, mayor of Detroit, said in a prepared statement.

In August 15, the blight removal program was suspended after the MSHDA discovered several internal commands that needed improvement in the way the Detroit Land Bank was managing demolition contracts.

The city of Detroit completed approximately 11,000 demolitions since 2014, with roughly 8,000 paid through the federal HHF program.

Image courtesy of the city of Detroit