Detroit Foreclosure Crisis

 More than just an empty house

empty house interiorIn the late 1990’s and early 2000′s lenders pushed subprime mortgages and mortgages with exotic terms in many of Detroit’s working class and middle class neighborhoods. Then the recession hit, and the foreclosure crisis spread to include homeowners with conventional mortgages who’d lost their jobs.

The combined effect has been devastating to Detroit’s neighborhoods. By late 2011 foreclosure had touched one in every four habitable houses in the city – more than 63,000 of them.

Even in middle-class neighborhoods, hundreds of houses sit vacant, vulnerable to neglect and vandalism. Those vacancies drag down property values and erode residents’ confidence in a neighborhood’s future, fostering more neglect and blight.

”Vacancy and increasing blight undermine residents’ confidence in the future of their neighborhood,” said University of Michigan urban planning professor and project co-leader Margaret Dewar. “They then delay maintenance of their own properties, and their fear that the neighborhood is declining becomes self-fulfilling.”

Helping neighborhoods fight blight

houseIn some neighborhoods, community-based organizations are fighting back – taking advantage of government and philanthropic programs designed to help head off blight and strengthen housing demand.

Dewar helped found a coalition called the Detroit Vacant Property Campaign, which gives community organizations some of the tools to fight blight, including help to:

  • Keep people in their homes by educating homeowners and buyers about mortgage and property tax foreclosure processes.
  • Develop a vacant property strategy.
  • Build neighborhood capacity

But to date, no one has evaluated the programs to figure out what works, where, and why.

“We don’t know how successful residents and community-based organizations have been or what hurdles they have encountered because these efforts are so recent,” Dewar said.

Formative evaluation of community-based efforts to save Detroit neighborhoods from the blight of mortgage foreclosures, a CARSS-supported project, aims to answer those questions so ongoing programs can be refined and improved.

 Understanding what works

With CARSS help, she and U-M urban planning colleagues Lan Deng and June Thomas will evaluate revitalization efforts in the Grandmont-Rosedale and MorningSide/East English Village neighborhoods, where residents have worked with community development corporations to board up and maintain vacant properties and to buy, rehabilitate and sell foreclosed houses.

As the project progresses, the team will work with Michigan Community Resources and community-based organizations to focus their efforts in neighborhoods that can bounce back, using interventions with the best chance for success.