In an exciting development, the U.S. Treasury Department announced last week that Michigan may use up to $100 Million—or 20%—of its Hardest Hit Fund (HHF) allocation for strategic demolition of vacant properties. Part of the Troubled Asset Relief Program (TARP), the HHF was created in 2010 to stabilize housing markets and neighborhoods by assisting families in states most severely impacted by the fallout of the housing and economic collapse.
While demolition should be a last resort, the scale of vacancy and blight in many communities leaves few other options. Vast housing surpluses weaken local markets and threaten the health and safety of residents while straining municipal services. Treasury’s decision reflects a national best practice and builds upon a growing body of research demonstrating that the strategic use of demolition to remove blighted and dangerous buildings has a positive and stabilizing effect on property values, housing markets, and, most importantly, quality of life for residents.
This is good news for Michigan. This first-in-the-nation approval cements Michigan’s status as a leader in actively tackling blight and, more importantly, provides much-needed additional federal demolition dollars to the state’s hardest hit neighborhoods in Detroit, Pontiac, Flint, Grand Rapids and Saginaw. This innovative approach speaks well of our dedicated and entrepreneurial civil servants at the Michigan State Housing Development Authority (MSHDA). By tailoring a demolition program to operate within the HHF’s current regulatory parameters, MSHDA was able to eliminate the need for new legislation, which can be unpredictable and is increasingly rare in Congress these days.
The challenge now will be ensuring that this money is well spent—both in terms of cost efficiencies and maximizing positive social and economic impacts. While strategic demolition can stabilize property values and improve quality of life, ad hoc demolition can actually be detrimental. Demolition should not happen merely to achieve an arbitrary benchmark number; rather it should be employed in a surgical manner in conjunction with other tools as part of a larger blight elimination strategy. Focusing on those problem properties whose removal will achieve the greatest positive impact for the most residents is critical.
These new federal dollars come amidst a renewed focus on the use of demolition as a tool to stabilize neighborhoods in Detroit. In the last year, local demolition capacity has increased substantially through Detroit Mayor Dave Bing’s aggressive demolition goals, Gov. Snyder’s $10 million allocation from the state’s national mortgage foreclosure settlement to the Michigan Land Bank for demolitions in Detroit, and the newly-formed and controversial Pulte-backed nonprofit Detroit Blight Authority. For those familiar with Detroit’s history, a renewed focus on demolition is bittersweet. Detroiters readily acknowledge that a lot of properties need to be demolished. At the same time, previous administrations’ approach to demolition over the past four decades has been remarkably ineffective, (borrowing and) spending hundreds of millions of dollars on ad hoc demolition in an ever-elusive effort to eliminate blight, while unnecessarily removing cherished historic character along the way.
Detroit should organize all demolition activity according to a single plan informed by market realities, neighborhood strengths, community concerns and local preferences for historic preservation and density. Doing so will protect neighborhoods by preventing new foreclosures. Fortunately, much of the hard work has already been done through the landmark Detroit Future City framework, which provides an accessible guide incorporating all of these factors and more for strategic demolition activity and other investment, whether city, state, federal, or philanthropic. If embraced to guide demolition, Detroit Future City can help separate today’s Detroit from its less effective past.