Nowhere in the US bulldozes derelict homes with Detroit’s ferocity as the city that has become a byword for US urban decay seeks to engineer a recovery by tearing itself down.
A year after the city exited the biggest-ever US municipal bankruptcy, a plan to demolish half of its nearly 80,000 blighted or deteriorating structures — nearly one in three city buildings — is showing some signs of success.
The number of fires — often caused by arson attacks on abandoned homes — dropped in October from a year earlier, while deeply depressed property values have ticked higher in areas close to demolitions. The aim of the program is to stabilize home values and reduce foreclosures as the city of 680,000 people struggles with emptying neighborhoods, high crime and one of the worst unemployment rates in the nation.
Photo: Reuters
However, the federally backed program has been tainted by a steep rise in costs as well as allegations that Detroit Mayor Mike Duggan favored demolition contractors that donated to his campaign.
Federal and city probes into the allegations are under way. Duggan, whose program has razed more than 7,000 homes in two years, denies any wrongdoing.
“I am proud of the work our team has done, and Detroiters should be, as well,” said Duggan, who took office in January last year as Detroit’s first white mayor in nearly 40 years.
Duggan was elected in November 2013 with “blight remediation” a key plank in a platform he built around a financial turnaround, economic development and reduced crime rates.
The special inspector general for the US Department of the Treasury’s Troubled Asset Relief Program — from which Detroit gets its federal blight-relief dollars — is investigating the city’s demolition program.
On Nov. 17, agents visited the Michigan State Housing Development Authority — which is a pass-through for the federal funds — to discuss the matter, a spokeswoman for the state agency said on Monday.
Detroit Inspector General James Heath told reporters that the probe he launched in October into Duggan’s demolition program should conclude by March.
Heath said he has not partnered with federal law-enforcement agencies.
Duggan set a weekly demolition goal of 100 homes, which has Detroit destroying derelict properties at almost quadruple the pace of any other recipient of federal “blight-removal” dollars, federal records show.
However, demolition prices have fluctuated sharply. In October, he put the average price for this year of razing a home at US$16,400.
A month later, after Heath opened his investigation, the administration cut the year’s average to US$13,830, citing lower contracting costs.
Former Detroit mayor Dave Bing told reporters that prices remain too high.
“The cost shouldn’t have gone up that much,” he said, adding that the price averaged as low as US$8,500 per structure during his term from 2009 to 2013.
Duggan attributes the price hike to his administration’s higher standards, including a faster demolition timetable.
Critics have hit Duggan’s administration hardest for a now-discontinued bulk-demolition program last year, where pricing was discussed with four contractors before the US$19.9 million project that razed 1,453 homes was publicly offered. Three of the companies later wound up as the only bidders on the deal.
The mayor has said there was nothing improper about the arrangement and that the state of Michigan approved.
“We did this in complete cooperation with the state,” said Brian Farkas, special projects director for the Detroit Building Authority, which oversees the city’s demolition work.
Executives for two of the companies that wound up with the contracts donated nearly US$18,000 among them to the mayor since May 2013, campaign records show.
Mayoral aides denied the contributions influenced the contract awards.
However, Charles Williams II, an influential African-American minister and a Duggan foe, condemned the deal.
“How is it a contractor can go into the office, set the price and get the contract? To me, it’s unprecedented,” Williams said.
If rules were broken, US President Barack Obama’s administration would not have given another US$21 million in demolition funds to Detroit in October, bringing the amount of federal backing for the city’s blight-elimination efforts to US$121 million, Duggan’s aides say.
A treasury official, whose office oversees the program, acknowledged “reported issues with Detroit’s blight program and potential rising costs,” but praised the mayor’s efforts.
“We recently visited Detroit and you can see the real impact the blight program is having on communities,” said Mark McArdle, the federal agency’s deputy assistant secretary for financial stability.
Duggan said demolitions played a role in reducing arsons during this year’s three-day pre-Halloween period.
At its peak in 1984, city records show 810 arsons — compared with 52 suspicious fires during the same October period this year. From 2011 to last year, arsons ranged between 93 and 97 during the period, records show.
In another positive sign, a report by Detroit analytics firm Dynamo Metrics showed occupied home values near federally funded demolitions rose 4.2 percent on average between April last year and March.
However, Jacques Welch, a 55-year-old factory worker, says his street is still waiting on City Hall.
Near his home are a half-dozen abandoned houses that Welch says attract squatters and drug dealers.
“You get used to it,” he told reporters, resigned to the lack of progress in his neighborhood. “There’s nothing else you can do.”
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