Housing Blight Problem in Michigan - Case Study Example

Housing Blight Problem in Michigan Table of Contents Introduction 2 Housing Blight Problem in Michigan 2 Problems of the Blighted Housing 3 Proposal for the Solution of Blighted Housing in Michigan 5 Conclusion 10 References 11 Bibliography 13 Introduction Food, clothing and shelter are the three basic requirements of any human located anywhere of the world. With the advancement of technology and the development of the society hand – in – hand, the problems of houses being blighted for a long period of time is taking a serious toll. If one delves deep in to the root of the misery, one will easily find that sub – prime loans, economic depression and lack of employment is responsible for such problem (McConnell, 2009). Therefore, infrastructural growth and employment generation in the area can subsequently reduce sub – prime loans and economic depression thereby curtailing the rate of mortgaged house and blighted housing issues. Housing Blight Problem in Michigan Prior to having a thorough discussion of the problem, it is very much important to know what actually a blighted housing means. Sarah Crone from Kalamazoo Gazette reported on August 02, 2009, “By the city's definition, an abandoned residential structure that has been for at least 30 days both unoccupied and at least one of the following: is open to casual entry; has one or more windows boarded; has utilities disconnected; has been declared a dangerous building by the city of Kalamazoo's code of ordinances; is in violation of the city's housing code; is the subject of more than one year's worth of debt to the city; or is apparent to the public that the structure is unoccupied” (Crone, 2009). The problem with the Blighted Housing is too serious and in the Kalamazoo area, the number of houses blighted has increased considerably. In July 2008, the number of blighted houses across the city was 212 and the recent number has increased to about 250. This statistics firmly shows that there has been a considerable growth in the number of the blighted houses and as such no effective measures were taken to curb the problem, which is why the seriousness of the matter has increased day by day (Crone, 2009). Problems of the Blighted Housing The problem of blighted housings all over the United States is myriad and serious. Debra Watson and Anne Moore in 21st October 2008 noted that, once an affluent area of East Side, Detroit neighborhood is suffering from major housing problems because of the effect of the mortgage crisis. The report also states that about three-quarters of a million of people have already lost their homes all over United States and the foreclosure filling rates have increased up to 82.6% from the last year. This statistics were brought forward by the website, Foreclosures.com. In the same website, it was also reported that 107,500 homes were lost in the month of September only. The city of Detroit has the highest REO rates. The repossession rate for the major cities in US along with the real-estate or (REO) homes or the homes which are repossessed by the banks or the holders of the mortgages were 3.7 % in the year 2007. The area of Cleveland, Ohio was placed second position with a 3% REO rate (Watson & Moore, 2008). Another major problem associated with the blighted housing has been the problem of socio-economic regime. The real story will reveal a different kind of social reality altogether. A very recent sale of a house in Detroit which was foreclosed gives the true information and picture behind the original episode. In September, a modest two-story building with a capacity to accommodate a single family situated on the east side of Detroit near the Detroit City Airport was astonishingly sold for one dollar. The more astonishing statistics which comes on the way is that within a time span of less than two years, in November 2006, the same house was sold at a value of $ 65,000. This is an action and a resultant of sub – prime loans and adversity of mortgages. According to the Detroit News report of August 13, there are several properties which are enlisted in the same area now for the sale at $1. This list contains single family home and along with that a duplex too. In few cases, the subprime lenders are finding themselves to be the owner of the entire neighborhood of ‘deteriorating homes’. The most painful and troubling part of the story is that a representative of a firm that manages realty and sold the one dollar house states that “My 14-year old son could buy a block of Detroit property”. This shows that blighted housing really reduced prices of the properties in and around Michigan. Foreclosures are raising everyday all over United States, and have increased in many metropolitan cities across Michigan. Realty Trac released a figure that Michigan had a fourth rank nationwide in foreclosure filling in the month of August, with 13,605 cases. The rate of foreclosure fillings were raised to 17% over July levels and the rate were surprisingly at 1 for every 332 households. This rate is comparable with the national rate of one filling for every 416 households (Watson & Moore, 2008). The report of Association for Community Organization for Reform Now or popularly known as ACORN of 2006 was most shocking. The report says that “the city of Detroit was singled out as one of the cities likely to experience a housing disaster.” In the year of 2005, more of the half purchased loans made in the area of Detroit were considered to be the high-cost loans, “making the city particularly vulnerable to rate shock” the report noted. The report also stated that 23 metropolitan areas in the US were representing those areas where high-cost loans were taken by the home buyers with a rate of at least one out of three homebuyers taking loan to buy the house. All these statistics put forward the issues which are to be revised time and again and attention at the government level is must to solve and negotiate the problems related to blighted housings. Along with this, the statistics and various reports from several sources also point out to number of socio-economic factors behind the problem which are also needed to be given a second thought (Watson & Moore, 2008). Proposal for the Solution of Blighted Housing in Michigan The problem of the blighted housing is serious to the extent that it needs the attention of the government immediately. Various government and non-governmental organizations have come forward with number of effective measures to fix the problem. David Shearson of The Detroit News reports that Detroit Mayor Dave Bing requested President Obama to visit the abounded property sites of the city. The abandoned site in and around the city is nearly about 70,000 properties. The effective interference and national fund support can really carb out the problem of blighted housing in the areas of Michigan as it has taken a shape of national disaster. The comments and the anti-comments will not launch anyone to any kind of solution. The gut issue is at some other plane. Detroit has unemployment rate of almost 28% and strikingly Michigan has the highest unemployment rate. The unemployment rate of Michigan is at 15.1% which is high above the national average of 10.2%. This is a serious issue and need to be resolved first and treated with a topmost priority (Shepardson, 2009). By generating more and more career oriented problem, vocational education and training and sources of employment in the areas of housing blight. Mayor Bing said to the reporters: “We need help and we need help on a direct basis”. But seeking help is not a very feasible option; taking some measures to secure the economic depression of the area which is consequently increasing blighted properties is the utmost need of the time. The city of Michigan is securing $237 million in federal money in order to build up a fast transit train along the Woodward in Detroit. This is done to add a value of about $125 million in the private sector and the funding has been secured so far. Mayor Bing also adds that he is hopeful and strongly feels that the issue is going to get resolved by 2010. This kind of infrastructural measure is important and is beneficial in the growth of the region. All these effective measures can solve the problems of the blighted properties in the states of Michigan by supporting the economy of the region (Shepardson, 2009). Michigan State Housing Development Authority or popularly known as MSHDA announced and committed funding of a sum of about $25 million over next four years and the funding was done keeping in mind, the eradication program of blighted properties in the eight cities of Michigan. These eight cities of Michigan are eight ‘cities of promise’ that includes Benton, Harbor, Detroit, Flint, Hamtrack, Highland Park, Muskegon Heights, Pontiac and Saginaw. These policies were announced by Governor Jenifer M. Granholm and Michael DeVos, the executive director of the MSHDA. One of the poignant steps in rehabilitant or eradicating the problems and the victim of the blighted properties can be achieved through MSHDA. MSHDA is a quasi-state agency. The work of the body is to provide financial and technical assistance to the victims of the blighted properties in Michigan through the partnership of public and private sectors. The work of MSHDA is to provide, preserve and create housing facilities which are affordable and decent. Along with this, the body also takes due care of the economic development of the region to curb the economic depression and consequent blighted properties. The body focuses on the community development program and addresses housing issues. MSDHA also provides home loans which are exempted from taxes. This loan rendering process should be duly encouraged and this can be taken as a major and effective measure to fight for the safe neighborhood and eradicate blighted properties. Governor Granholm also said, “By providing resources to eliminate blight, we will help make neighborhoods safer for citizens and more inviting for business and economic investments”. These words by Governor Granholm have weight and by following the plans and development activities of MSHDA, the issues of blighted properties can be effectively reduced. The blight eradication problem is an issue involving a round about economic development because the socio-economic issues are interlinked with each other in order to achieve a safer neighborhood many other social and economic facets are to be seriously considered. The blight eradication program has many goals which consequently will lead to safe neighborhood and make it more attractive. Few such goals are: Improving neighborhood safety for children Increasing the use of deconstruction (salvaging/recycling usable materials) in place of and/or in conjunction with demolition to remove unwanted structures and rebuild communities Substantially increasing the number of blighted residential structures demolished in each of the cities through strategic demolition activities Increasing the use of holistic, market-based neighborhood revitalization plans tied to the neighborhoods where blight is being addressed with MSHDA funds Increasing income and skills of homeless persons in the cities (PR Newswire, n.d.) It is firmly believed that the measures suggested by MSHDA are real and effective. If these measures are followed efficiently and executed properly then blighted housing problem in Michigan can be taken under control. The Cities of Promise is an effective initiative taken by Governor Granholm with a vision to re - develop the communities and reduce extreme poverty in the cities that are suffering from miserable and devastating state due to excessive decline in population, beating rate of industry and jobs, degenerated infrastructure and neighborhood that are blighted. The blight eliminating program is a crucial and a critical step taken by the state of Michigan Jobs created through these effective community development programs will open up opportunities and training for thousands of homeless in and across the state of Michigan. Conclusion In the year 2002, a 10 year-old girl Ashley Joyce was burnt dead in a fire which broke out in her apartment. According to the city officials, they were unaware of anybody living in that house along with the fire brigade and police. The apartment caught fire from a candle and due to the ignorance of the fact anybody staying inside the house, she was burnt alive. She was living in that apartment without any occupancy permit and boarded windows (Crone, 2009). Out of this tragedy, city’s first anti-blight team was born but due care has to be taken that such tragedies never ever should happen. Had the people, the government or the enlightened community or neighborhood had been a bit aware of the issue then a safe place for all would have been easily build. It is the equal effort and concern of the citizens and the government together which can make a place better place for its residents and humanity. References Chrone, S., (2009). Broken windows, broken homes: Boom in blighted houses forces city to change its strategy. West Michigan Business. Retrieved February 11, 2010 from http://www.mlive.com/business/westmichigan/index.ssf/2009/08/broken_windows_broken_homes_bo.html McConnell, M. P. (2009). Blight Fight. Daily Tribune. Retrieved February 11, 2010 from http://dailytribune.com/articles/2009/03/11/news/srv0000004877484.txt PR Newswire, (No Date). Governor Granholm Announces Grant Funding for Cities of Promise Blight Elimination Program in Coordination with the Michigan State Housing Development Authority. United Business Media. Retrieved February 11, 2010 from http://www.prnewswire.com/news-releases/governor-granholm-announces-grant-funding-for-cities-of-promise-blight-elimination-program-in-coordination-with-the-michigan-state-housing-development-authority-52703107.html Shepardson, D., (2009). Bing urges Obama to help blight efforts. The Detroit News. Retrieved February 11, 2010 from http://www.detroitnews.com/article/20091203/POLITICS03/912030484/1410/METRO01/Bing-urges-Obama-to-help-blight-efforts Watson, D. & Moore, A. (2008). Housing crisis accelerates blight in Detroit neighborhoods. Word Socialist Web Site. Retrieved February 11, 2010 from http://www.wsws.org/articles/2008/oct2008/fore-o21.shtml Bibliography Byrnes, P. (2009). Byrnes Fights Property Tax Foreclosure, Blight. Michigan House Democrats. Retrieved February 11, 2010 from http://052.housedems.com/news/article/byrnes-fights-property-tax-foreclosure-blight/proposal-is-second-wave-of-legislation-to-help-struggling-homeowners Franz, N. (2009). City takes aim at blight. The Macomb Daily. Retrieved February 11, 2010 from http://www.macombdaily.com/articles/2009/11/30/news/srv0000006960734.txt Guyette, C., (2002). Charge of the blight brigade. Metro Times. Retrieved February 11, 2010 from http://www.metrotimes.com/editorial/story.asp?id=4087 Read More