Banks have been notoriously reluctant to issue mortgages in Detroit. Even when they do, people can struggle to close on a home because down payments are often high.
A new program from the city looks to address this issue. The Downpayment Assistance Program offers lower-income buyers up to $25,000 in grants they can put toward a down payment and other costs. We spoke to the co-author of a new paper looking at how the buyers can best use the program and whether the reluctance from banks to do loans in Detroit will hold it back.
We also heard from Wayne County after our story published on how it allows tax auction bidders to break the rules, and the response was… interesting. Elsewhere, renters struggle and organize for more rights, and find a receptive audience in Lansing.
As always, thanks for reading.
>>“The rent is too damn high”: Democrats in Lansing have started introducing a flurry of legislation geared toward protecting renters rights and making rent more affordable. One bill introduced before legislators went on summer break would prohibit landlords from using credit scores and criminal history as factors in selecting tenants. Another introduced Thursday would lift the statewide ban on rent control. Many other potential proposals are on the table, including limiting application fees, removing barriers to homebuilding and requiring landlords to pay for renter relocation if their building is condemned. The activity in Lansing is occurring against the backdrop of rallies organized by a coalition of housing advocacy groups that say high rent is burdening tenants. Around 40% of renters in Michigan make too much to qualify for rental subsidies but too little to afford rent at market rates. Unsurprisingly, most landlords are in opposition to the proposals, saying rents have plateaued and supply is set to go up in most parts of the state. (MLive, WLNS, Detroit Free Press, Crain’s Detroit Business)
>>One woman’s story: Some of the challenges facing renters are exemplified by Tonya Hogan. After her husband died of COVID-19 in January 2022, she was unable to make monthly payments on the home the couple was working to buy through a land contract. Since losing her home, she’s lived with family, in her car, shelters and finally a one-bedroom apartment in Melvindale thanks to a Section 8 voucher. Hogan faces several personal barriers to stable housing. She struggles to find consistent work because of her health issues, which include renal disease, back pain and mental health challenges. Other obstacles are systemic: lack of affordable and quality housing, difficulty using Section 8 vouchers and few effective support systems for unhoused people. The number of unhoused people has steadily increased since the pandemic, as has the time they’ve remained in shelters. (BridgeDetroit)
>>Secret deal? The City of Detroit is aggressively pursuing property owners who neglect their properties. But the Morouns seem to get away with some of the worst blight offenses in the city. Is it because there’s an agreement between the city and a powerful real estate family? Nat Zorach said the city granted a Freedom of Information Act request for a memorandum of understanding between the two parties. Zorach, who writes about urban planning and policy at The Handbuilt City, told Outlier Media that the city hasn’t provided him the document yet, only saying that it’s 39 pages. A source within the Buildings, Safety Engineering, and Environmental Department told him the agreement allowed the city to present violations to property owners prior to enforcement. The city also settled with the Morouns in December for just $50,000 for blight tickets on nearly 2,000 properties. (Handbuilt City, Axios Detroit)
>>Another lifeline: An ambitious but stalled project in Midtown looks like it will get yet another extension on brownfield tax credits from the state. The Michigan House of Representatives approved an extension on the construction timeline for The Mid, which now has until the end of 2026 to build part of a single building to keep more than $8.9 million in tax credits. The development near Mack and Woodward avenues, expected to cost $377 million in its most recent estimate, has yet to break ground. The developers said the project has been delayed by construction cost increases, which has made it difficult to secure financing. The tax credits had previously been extended in 2021 and were set to expire Thursday. Rep. Abraham Aiyash, who introduced the bill, said he wouldn’t advocate for another extension. The Michigan Senate still needs to approve the bill. (Crain’s)
>>Development news quick-hitters: Detroit property owner Michael Higgins died last week at the age of 74. The longtime landlord invested in Detroit real estate during the ’80s and ’90s when others were selling, but Higgins has recently faced legal troubles for unpaid bills and lack of progress at some of his developments… Ground will soon break on the Fisher House, where families of veterans receiving care at the John D. Dingell VA Medical Center in Midtown can stay for free… Several groups are looking to raise $25,000 through a crowdfunding campaign to revitalize the Lincoln Street Art Park near the Recycle Here! facility… Detroit named urban farming activist Tepfirah Rushdan as the city’s first director of urban agriculture. Rushdan will act as a liaison between the city and farmers. (Detroit Free Press, Detroit News, Model D, Outlier)
How to get $45K for your home’s down payment
One of the many barriers to buying a home in Detroit has been the high down payments necessitated by consistent undervaluing of real estate. A new city program is providing participants up to $25,000 in grants for homebuyers to put toward down payments and other costs.
A new paper published by a University of Michigan research center outlines how you can combine the city’s grant with others from lenders to unlock as much as $45,000. We spoke with one of the paper’s authors about why this program can be so useful and some of the potential pitfalls.
Checking a box
Last week, we published an article about how Wayne County consistently lets people bidding at the annual property tax auction break its own rules. The county says those with unpaid taxes or blight tickets can’t purchase property, and simply takes them at their word.
The Wayne County Treasurer’s Office provided a statement to us after publication, which provoked more questions than answers. The office said through spokesperson Darci McConnell that it does check prior to issuing a deed whether buyers are in violation of the rules, but “we do not preclude participation in the auction as the law does not mandate that condition.”
McConnell added that the treasurer’s office checks whether people are in violation by asking municipalities if buyers have any unpaid blight tickets. The city is currently suing one of those buyers, Dennis Kefallinos, for not maintaining four of his properties.
The city’s Director of Media Relations John Roach confirmed the county asks for this data, and the city provides it. The county declined to tell us what it does with that information.
Based on what we found while reporting this piece, the most likely answer is nothing.
Meanwhile, Salameh Jaser — another landlord who bought properties at the auction while accruing blight tickets — received demolition orders from the city at three of his properties.
(Hat tip to Eric Dueweke for spotting the limited liability companies linked to Jaser in the City Council agenda and forwarding them to us.)
Learn some spooky history
Looking for something to get you in the Halloween spirit? Preservation Detroit is giving tours of four Detroit cemeteries in October where participants can learn more about the history of these places — and who’s buried there.
One tour goes through the Elmwood Cemetery where some of Detroit’s most historically significant figures are buried. Preservation Detroit says the cemetery, which opened in the mid-1800s, was one of the first in the Midwest to racially integrate. Today, it’s a wonderful place for a stroll. The great landscape architect Frederick Law Olmsted gave it a redesign in 1890. Unlike much of Detroit’s flat terrain, Elmwood has hills.
The cemetery is the final resting place for Mayor Coleman A. Young, Gov. Lewis Cass, MC5 guitarist Fred “Sonic” Smith and Stroh Brewing Co. Founder Bernhard Stroh.
Preservation Detroit’s cemetery tours start Oct. 7 at Mount Elliott Cemetery. The Elmwood Cemetery tour is on Oct. 8.
See our Q&A with a Preservation Detroit guide last year to get a sense of what these tours are like.