COVID-19 Impact on Michigan Communities: Risks, Interventions, Resources

There is no question. Michigan communities are encountering and will continue to feel the impacts of the COVID-19 public health and economic crisis.  As unemployment skyrockets, state and local revenue sources diminish, and public health costs soar, immediate action must be taken to preserve homes and businesses now and into the future.

To help, the Community Progress Michigan Initiatives team has assembled a list of critical resources to support urban, suburban, and rural communities across Michigan in assessing risks, planning interventions, and staying tapped into important recovery information moving forward.

• RISKS: The impacts the COVID-19 crisis could have on Michigan communities’ problem property inventories 
• INTERVENTIONS: Local actions we can take now to prevent an increase in problem properties
• RESOURCES: Additional Community Progress and Michigan/National information and resources to help communities address COVID-19 in Michigan.  

 

Risks to Michigan Communities

Prior to the crisis, many Michigan residents were already struggling to afford housing costs and many communities already faced with the challenges of vacant, abandoned, and deteriorated properties. Statewide unemployment is now above 20%, with some counties hit much harder and 8% who’ve filed are still without payment. Even as the state reopens, many tenants, homeowners, and businesses will struggle to pay rent, mortgages, and property taxes. Property owners strapped for cash, are more likely to defer property maintenance and needed repairs. These trends will only exacerbate Michigan’s current vacant property inventory, which exceeds more than 380,000 non-seasonal housing units, and add to the public health costs of poor–quality housing.  

• Rise in Evictions: Michigan’s eviction moratorium is currently set to expire on June 11. The federal moratorium on federally subsidized rental properties or those with a federally–backed mortgage won’t end until late July, but only covers an estimated 28% of rental units in the U.S. In 2017 45% of renters across the state were overburdened (paying more than 30% of income), suggesting an already high number of vulnerable renters prior to the COVID-19 crisis.

   

 

• Increase in Property Tax Forfeiture and Foreclosure: Community Progress examined data from the State Treasury Department by county to observe the relationship between unemployment and property tax forfeiture during the last economic downturn. The table below shows that Michigan counties are at a higher risk of property tax forfeiture when unemployment increases.  

 

 

• Growth in Mortgage Foreclosure:  In 2017, 20% of Michigan homeowners were already cost-burdened (paying over 30% of their income), an improvement from 30% during the Great Recession. While the impact is anticipated to be less severe than the foreclosure crisis with stronger protections in place, the potential is still great, especially as Michigan remains a predominantly homeownership state.  

 

 

How State, County and Local Governments are Taking Action Now to Prevent Vacant, Abandoned, and Deteriorated Properties  

As we point out in a recent blog, local governments should be thinking about what they can do now to limit the negative impacts this economic downturn could have on their community, and seeking out state level and private sector support in these efforts. The decisions made now will have lasting impacts on the health, safety and financial well-being of Michigan residents. While this represents only a sliver of what’s needed, below are some early examples of interventions implemented by state, county and local government to keep people housed and prevent future vacancy.  

• Efforts to provide more time to pay on mortgages, property taxes, and rent for property owners economically impacted by crisis.  
  • Wayne County issued a property tax foreclosure moratorium for 2020. Other communities could consider this, with an exception for vacant properties so as not to delay their potential reuse and re-occupancy.  
  • New York has extended its eviction moratorium for residential and commercial tenants until late August while it works to expand rent relief options to support tenants and landlords. 
• Efforts to provide payment relief on mortgages, property tax and rent for homeowners, businesses and tenants economically impacted by crisis.  
  • Many cities like Monroe, LA, and counties like Hennepin County, MN across the country have established or enhanced rental and homeowner assistance funds and programs by leveraging local, state, and federal funding (e.g. CDBG and ESG) as well as partnerships with private organizations. Click here for a summary of rental assistance examples.  
  • Michigan established minimum mortgage protections including a 90-day forbearance period, 90-day late fee relief, and no adverse credit reporting for late payments by borrowers through the MiMortgage Relief Partnership. These protections help address the gap of homeowners without federally-backed loans (who are covered under the CARES Act protections).  
  • Ann Arbor, MI will provide property tax relief by waiving penalty charges for late property tax payments.   

 

COVID-19 Resources from Community Progress 

Community Progress is committed to providing communities with guidance, so you are well-equipped to mitigate community instability and vacant, abandoned, and deteriorated properties. Our COVID-19 Resource Center is updated regularly with information on local, state and federal actions being taken. For specific inquiries or to share how your community is addressing these challenges in Michigan, please contact: Payton Heins, Associate Director of Michigan Initiatives at [email protected]  

• General VAD Prevention 
  • Blog: Preventing Post-Covid-19 Vacancy: 6 Interventions Local Governments Should be Thinking About Now 
• Code Enforcement
  Code enforcement will play a central role in monitoring the potential fall-out from the crisis and enhancing outreach to property owners in need of resources to maintain and repair their homes and buildings. Michigan communities have a number of code enforcement tools like Rental Registration and Vacant Property Registration, as well as nonprofit organizations and flexible CDBG funding to assist in their response.  
  • Webinar: Strategic Code Enforcement: A Critical Tool for Supporting COVID-19 Neighborhood Response, Thursday, May 21, 12 pm 
  • Blog: We Will Need Code Enforcement Now More Than Ever: Three COVID-19 Responses to Protect Neighborhoods 
  • Publication: Revitalization in Michigan: A Guide to Transforming Vacant, Abandoned, and Deteriorated Properties Through Code Enforcement – Available Summer 2020 here! 
• Land Banks 
  Every community in Michigan has access to a land bank – either at the state, county or city level – which manage Michigan’s most challenging properties. They, like local governments, will play a critical role in the state’s long-term recovery.  
  • Webinar: Land Banks, Land Banking Programs and COVID-19: Strategic Considerations for a Long-Term, Equitable Recovery, Thursday, June 4, 12 pm 

 

Michigan and National Resources 

Many Michigan and national organizations are advocating for critical funding at the state and federal level, as well as putting out informative webinars and other resources to support local community stabilization efforts.  

Michigan 

• Community and Economic Development Association of Michigan Blog 
• HUD CDBG, ESG, HOPWA Allocations by City/County 
• Michigan Economic Development Corporation COVID-19 Resources
• Michigan Municipal League COVID-19 Resources 
• UM Poverty Solutions: Interactive Poverty and Well-Being Map 2020 by County 

National

• Consumer Financial Protection Bureau Mortgage and Housing Assistance 
• Eviction Lab COVID-19 Housing Policy Scorecard by State 
• International City/County Management Association Coronavirus Crisis Response: Resources for Your Community 
• National Association of Counties: COVID-19 County Response Efforts and Priorities 
• National League of Cities Covid-19 Local Action Tracker
• National Low-Income Housing Coalition COVID-19 Resources 
• National Low-Income Housing Coalition: Properties Subject to Federal-Eviction Moratoriums – Searchable Database  
• Urban Institute’s COVID-19 Job Loss Map, searchable by County or Metro Area