With the announcement of 62,000 property foreclosures with at least 37,000 occupied last November 2014, its safe to say that this feels like deja vu. Reminiscent of what the UN considered inhumane with the water shut-offs last year, Detroit citizens once again are face with a new challenge.
We can recall the water shut-off crisis that took place last year that turned off nearly 26,000 Detroit residents water. The cut off strategy implemented by Michigan’s Governor Snyder and carried out by Kevyn Orr caused a huge uproar among detroit natives as well as activists abroad.
Wayne county Treasurer Raymond Wojtowicz who inexplicably received an unprecedented bonus of $22,000 in 2012 initially opted foreclosing properties that were smaller than $2,000 since 2005. Raymond claims because of his limited staff, he could not handle the amount of tax delinquency that needed to be assessed. In 2012 there were over 40,000 delinquencies, and in 2013 over 36,000 owners had pasted dues. With Treasurer Wojtowicz bypassing past delinquent bills since 2005, and without notice to home owners, property tax bills accumulated to $364.5 million along with an interest rate of $100 million in addition. Just last year Wayne county alone had 56,000 foreclosures proceedings, 22,000 were actually foreclosed. This year is predicted to be much larger with 75,000 foreclosures proceedings, 62k attributed to Detroit.
President Obama last year was in talks of sending $100 million from the “Hardest Hit Fund Program” to detroit for demolition of blighted property in hopes of mitigating the $500 million already allocated to spend on blight removal by Kevyn Orr for the next ten years. Consequently this would have freed up 100 million that can be used to reduce city workers pension cuts. Obama administration along with other public officials determined to construct the The Blight Removal task Force in September 2013 with Loveland Technology leading in the blight removal task in surveying and estimating the cost of the whole city’s areas of blighted property. According to Loveland Technology, 100,000 (15% of Detroit’s population) Detroiters will be at risk for foreclosure. The Blight Removal Task Force estimated $850 million is what’s needed to address neighborhood blight in Detroit. Michigan so far has received $456 million in funding from the “Hardest Hit Fund Program”, “Fire escrow”, “NSP II” and “CDBG” with immediate access to $88 million. There’s still a gap of $394 million that’s not funded by federal programs.
Now how does Blight removal relate with foreclosures? One of the ways “The Blight Removal Task Force” defines blight property as Tax reverted property. Tax reverted property is foreclosed property from tax delinquencies. So far, there are an estimated 73,035 residential blighted properties. With Detroit’s already $364 million property tax debt, the residential blighted property will increase even more from non auctioned property, adding to the large budget for Blight removal.
Michigan State Housing Development Authority (MSHDA) has received some of the federal funding of the $456 million “Hardest Hit Fund Program” for aiding in foreclosures. The Michigan Homeowner Assistance Nonprofit Housing Corporation (MHA) acting through the Michigan State Housing Development Authority (MSHDA) designed forgivable loan programs to help homeowners who have had a financial hardship. Michigan homeowners can apply directly at or call 866.946.7432.