Blight Money for Detroit, Other Cities, Safe in Transportation Bill
On July 24, the Detroit Free Press published an article discussing a Senate decision to not rescind unspent money from the Hardest Hit Fund in order to help pay for a transportation measure (DRIVE Act).
Blight money for Detroit, other cities, safe in transportation bill
WASHINGTON — An updated version of a 6-year transportation bill unveiled on Capitol Hill on Friday morning no longer includes a provision to rescind money from a fund that is paying for blight eradication in Detroit and across Michigan.
As first reported in the Free Press on Thursday night, U.S. Sen. Debbie Stabenow, D-Mich., struck a deal with Senate Majority Leader Mitch McConnell to ensure that unspent amounts in the Hardest Hit Fund were not raided to help pay for the transportation measure.
An earlier version of the legislation, released early this week, proposed taking $1.7 billion in unspent funds from the fund, a move which, if enacted, could have devastated blight removal efforts in Detroit and other Michigan cities.
The new version of the bill to be considered on the Senate floor no longer even mentions the Hardest Hit Fund. The Free Press obtained a copy of the substitute version earlier Friday.
Speaking on the Senate floor, McConnell noted the removal, noting the objections raised by several senators, including U.S. Sen. Rob Portman, R-Ohio, who had been working on an amendment to save the funds if necessary. Michigan and Ohio are among the top recipients of Hardest Hit Fund money.
Thursday night, Stabenow told the Free Press that she had reached the agreement with McConnell, R-Ky., that would save the remaining amounts in the $7.6-billion Hardest Hit Fund, including that still unspent in Michigan’s $498-million allocation. The state has allocated $175 million to battle blight in 16 Michigan communities, including $100 million in Detroit.
The fund was created in 2010 to help stabilize neighborhoods and help homeowners stay in their homes in the wake of the housing crisis and the great recession. While some of the funds are being used for blight removal in cities across the nation, no city in the U.S. has had as much blight removal money committed to it from the federal government as Detroit, as the Free Press has previously reported.
“It’s a major victory,” Stabenow said Thursday night. “They were talking about trying to tweak it. I indicated to them that it was not going to work. It was totally unacceptable.”
Stabenow said Thursday that even though attempts had been made by the Environment and Public Works Committee to mitigate some of the losses to the fund, she still considered it unacceptable and was willing to place a hold on the bill, which could have stalled it for days, with the U.S. House set to leave for a month at the end of next week.
With that threat on the table, Stabenow said McConnell, who has made moving the legislation a priority, agreed to remove the provision from the bill, meaning funding would have to be found elsewhere but that the legislation could move forward.
If there were any attempt to reinsert the provision, Stabenow said, she would again move to stall its progress. But she added that the effort to remove the funds means she and other senators from states receiving the funds are going to have to be on guard for any effort to take it away again in future legislation. Under the law, the states receiving the funds have until the end of 2017 to spend all they have been committed. Eighteen states and Washington, D.C., received allocations under the Hardest Hit Fund.
“We’re going to have to watch very closely,” Stabenow said. “I’ve been indicating for some time I thought this was an area Republicans would want to go after.”
A Republican-generated report outlining the intention to go after unspent money in the Hardest Hit Fund complained that the fund has been ineffective and poorly managed and that now, with housing values recovered in much of the nation, the remaining money — there was about $2.4 billion of the original $7.6-billion allocation left as of the end of June — could be used to pay for infrastructure.
Stabenow, along with U.S. Sen. Gary Peters, D-Mich., and members of Congress from other states, notably Ohio, howled loudly at the proposal, arguing that cities like Detroit or the state could get stuck with potentially millions in bills incurred but not yet reimbursed by the federal government. As far as the state of Michigan was concerned, for instance, practically all of the total $498 million has already been committed to work scheduled or programs already underway, even though many of the bills haven’t come in yet or been sent for reimbursement.
Peters said late Thursday in a statement: “I strongly oppose the provision in the highway bill cutting the Hardest Hit Funds and was proud to work with Sen. Stabenow and my colleagues in the Senate to ensure Michigan cities that are bouncing back from the economic crisis are not at a disadvantage as they work to revitalize their neighborhoods.”
The loss of the program would have been “devastating to Detroit’s neighborhoods,” Detroit Mayor Mike Duggan said in a statement late Thursday that praised the victory by Stabenow, who he said “has been relentless over the last 48 hours leading the fight to restore this program.”
While it’s not known exactly how much Detroit, other cities and the state could have lost overall, it could have topped $100 million, depending on how the Senate defined “unspent” or “unobligated” funds. Meanwhile, it could have stymied an ambitious blight removal program in Detroit which has torn down thousands of properties, as well as those in older industrial-based municipalities across the state.
In Michigan, more than $340 million of its $498-million allocation had been spent as of June 30, leaving more than $150 million. But much of that has already been committed to projects around the state.
Stabenow, in a speech on the Senate floor Thursday, argued against the provision, calling any move to rescind money already promised to cities for revitalization efforts “outrageous,” especially since in many cases work has already been done but not yet been reimbursed by the federal government.
“Money they have been counting on, money they have been allocated, will be taken back,” said Stabenow, who added that more than a dozen cities in Michigan have been hiring contractors to tear down buildings or do redevelopment work “counting on the fact that they will be paid because we, the federal government, have given them, in writing, our word.”
In her speech, Stabenow talked at length about home values rising in Detroit as blight is removed and neighborhoods are redeveloped. She also noted reporting done by the Free Press about the dangers posed by a vast number of vacant structures around city schools and how the Hardest Hit Fund program is helping support efforts to tear down some of those buildings.
“For communities around this country, this is a big deal. Certainly this is a big deal for Michigan, and I can’t in any way support any effort going forward unless this is fixed,” said Stabenow at the time.
Please click here to view the article online.
Please click here to view the full text of H.R. 22 (Developing a Reliable and Innovative Vision for the Economy Act (DRIVE Act) online.
About Safeguard
Safeguard Properties is the mortgage field services industry leader, preserving vacant and foreclosed properties across the U.S., Puerto Rico, Virgin Islands and Guam. Founded in 1990 by Robert Klein and headquartered in Cleveland, Ohio, Safeguard provides the highest quality service to our clients by leveraging innovative technologies and proactively developing industry best practices and quality control procedures. Consistent with Safeguard’s values and mission, we are an active supporter of hundreds of charitable efforts across the country. Annually, Safeguard gives back to communities in partnership with our employees, vendors and clients. We also are dedicated to working with community leaders and officials to eliminate blight and stabilize neighborhoods. Safeguard is dedicated to preserving today and protecting tomorrow. Website: www.safeguardproperties.com.
