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Topic: Flint, Genesee County and the Hardest Hit audit
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untanglingwebs
El Supremo

Feds to audit $25.5M Flint demolition program
Candice Williams, The Detroit News 8:36 a.m. ET March 26, 2017

A federal watchdog agency has announced it will conduct an audit of $25.5 million in demolition costs in Flint related to the Hardest Hit Fund.

The Office of the Special Inspector General for the Troubled Asset Relief Program said in a memo sent Monday to the U.S. Secretary of Treasury that it will examine demolition and related costs in Flint that were reimbursed with TARP dollars.

The review comes after a nationwide audit last spring found the full blight elimination program to be at risk of unfair competitive practices and overcharging.

Officials with SIGTARP declined to disclose Friday what prompted the audit for Flint.

“We certainly have had audits focused on specific counties and audits that have done deep dives on specific cities,” said Rob Sholars, a SIGTARP spokesman.

As of Friday, the Genesee County Land Bank Authority, which handles the Blight Elimination Program in Flint, had not received formal notification of an audit or a request for information, said Christina Kelly, director of planning and neighborhood revitalization for the land bank.

The authority is prepared for an audit, she added.

“We have a lot of procedures in place to make sure we have all of our i’s dotted and t’s crossed,” she said. “We go to great lengths to keep records in order and follow procedure required under the grant.”

According to the memo, the Hardest Hit Fund has spent $25.5 million in Flint for demolition and related activities.

Kelly said that as of this month, 2,039 demolitions have been completed since work began in 2014. The Michigan State Housing Development Authority has reimbursed the Genesee land bank $26.3 million.

An additional 244 properties have been demolished, but not yet funded, Kelly said. Another 340 demolitions are in process.

The audit in Flint comes after SIGTARP issued two subpoenas in May in Detroit demanding the Detroit Land Bank Authority and Detroit Building Authority, which oversee the city’s blight reduction program, hand over information on federally funded contracts and several demolition contractors.

SIGTARP is conducting a criminal investigation into Detroit’s demolition program, which first came under scrutiny in the fall of 2015 amid concerns over bidding practices and spiraling costs.

Detroit officials have defended the demolition efforts that have brought down close to 11,000 blighted homes since 2014.

In June, SIGTARP issued a report on a national audit of the full blight elimination program, Sholars said.

The report covered the seven-state Housing Finance Agencies participating in the Hardest Hit Fund that the Treasury approved for the program: Alabama, Michigan, Ohio, Illinois, Indiana, South Carolina and Tennessee.

“It found that the program is significantly vulnerable to the substantial risks of unfair competitive practices and overcharging,” Sholars said. “In January, Treasury accepted two of our most important recommendations: requiring full and open competition and requiring that only necessary and reasonable costs be reimbursed.”

cwilliams@detroitnews.com

(313) 222-2311


Last edited by untanglingwebs on Sun Apr 09, 2017 10:44 am; edited 1 time in total
Post Sun Apr 09, 2017 9:30 am 
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untanglingwebs
El Supremo

MSHDA

Step Forward Mortgage Assistance and Hardest Hit Blight Program

Hardest Hit Funds (HHF) are provided by the U.S. Department of the Treasury through the Emergency Economic Stabilization Act of 2008 (EESA) or Troubled Asset Relief Program (TARP) to states that have been particularly hard hit by the economic and housing market downturn that began in 2007. The Hardest Hit Fund loan program was created in 2010 to assist states with their foreclosure prevention and neighborhood stabilization efforts. Michigan has received over $761 million to operate its Hardest Hit Fund programs.

The Michigan Homeowner Assistance Nonprofit Housing Corporation (MHA) was created by the Michigan State Housing Development Authority (MSHDA) to design and oversee the distribution of the Hardest Hit Funds in Michigan.

Blight Elimination Program
The Hardest Hit Fund Blight Elimination Program was established by the MHA to assist Michigan communities with high vacancy rates address blighted residential properties. By working directly with local leaders to identify and demolish dilapidated abandoned homes, the program helps stabilize property values by establishing more green space or making way for future development.

Step Forward Michigan Program
The Step Forward Michigan Program was established by the MHA to work directly with Michigan homeowners to help them stay in their home. The program provides up to a $30,000 interest free loan to assist with mortgage, property taxes, and/or condominium association fees. Hardest Hit Funds loans are forgivable at 20% each year, as long as the property remains the homeowner’s primary residence.

Homeowners can apply online at www.StepForwardMichigan.org or call 866-946-7432.

Additional Information:

Step Forward Michigan
List of Participating Partners
HHF Performance Data Reporting: Blight Elimination (see complete list of U.S. Treasury reports.)

For Servicers:

Servicer Contact/Wire Instructions
Servicer Participation Agreement
Condominium HOA Participation Agreement
Post Sun Apr 09, 2017 10:10 am 
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untanglingwebs
El Supremo

https://www.sigtarp.gov/Audit%20Reports/Blight%20Audit%20SIGTARP-16-003.pdf


Office of the special inspector general
For the Troubled Asset Relief Program
1801 L Street, NW, 4th Floor
Washington, D.C. 20220
SIGTARP-16-003 June 16, 2016
June 16, 2016
MEMORANDUM FOR: The Honorable Jacob J. Lew – Secretary of the Treasury
/Signed/
FROM: Honorable Christy Goldsmith Romero – Special Inspector
General for the Troubled Asset Relief Program
SUBJECT: Treasury’s HHF Blight Elimination Program Lacks
Important Federal Protections Against Fraud, Waste, and
Abuse (SIGTARP 16-003)
We are providing this report for your information and use. It discusses risk factors that could impact the effectiveness of the Hardest Hit Fund (“HHF”) Blight Elimination Program.

The Office of the Special Inspector General for the Troubled Asset Relief Program
conducted this audit (engagement code 032) under the authority of the Emergency
Economic Stabilization Act of 2008 and Public Law 110-343, as amended, which also
incorporates the duties and responsibilities of inspectors general under the Inspector
General Act of 1978, as amended.
We considered comments from the Department of the Treasury when preparing the
report. Treasury’s comments are addressed in the report, where applicable, and a copy of
Treasury’s response is included in its entirety.
We appreciate the courtesies extended to our staff. For additional information on this
report, please contact Ms. Jenniffer F. Wilson, Deputy Special Inspector General for
Audit and Evaluation (Jenniffer.Wilson@treasury.gov /202-622-4633); or Mr. Chris
Bosland, Assistant Deputy Special Inspector General for Audit and Evaluation
(Christopher.Bosland@treasury.gov /202-927-9321).
Post Sun Apr 09, 2017 10:40 am 
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untanglingwebs
El Supremo

"Treasury’s repurposing of HHF opened the door to significant Federal
TARP payments being made to an entirely different set of recipients than
the struggling homeowners who the program was originally intended to
benefit. TARP funds originally earmarked for homeowners now flow to
demolition and other contractors and subcontractors engaged by
intermediary local partners responsible for carrying out program
activities. These program activities include pre-and post-demolition
activities such as asbestos surveys, asbestos remediation, geo-engineering surveys, environmental studies, removal of trash and debris,
grading of land, greening of land, and maintenance."
Post Sun Apr 09, 2017 11:25 am 
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untanglingwebs
El Supremo

SIGTARP -Special Inspector General Troubled Asset Relief Program (TARP)
HFA-Housing Financial Agencies
HHF- Hardest Hit Funds

The audit above struck me as a total condemnation of the Treasury program for the Hardest Hit Program, especially the Blight Elimination portion. The Treasury program, while twice the size of a comparable HUD demolition program, is devoid of any regulation or requirement that the federal funds only cover blight elimination and their usage is necessary and reasonable.

SIGTARP has conducted a number of audits that exposed actual activities that failed to protect the interests of the federal government and the purpose of the program. In 2015 abuse of the program was evident when Indiana used TARP funds to demolish homes that were occupied, and not abandoned, in order to facilitate the relocation of a car dealership.
Post Sun Apr 09, 2017 3:23 pm 
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untanglingwebs
El Supremo

Implemented in 2010, this Treasury program was never able to reach it's stated goal of helping homeowners in crisis prevent foreclosure on their homes. By April of 2012 the Hardest Hit Fund while spending $217.4 million had only helped 30, 640 homeowners. This was about 3% of the tarp allocation and oly 7% of the homeowners the program had estimated would be helped. Some states helped relatively few of the applicants requesting assistance.

By mid 2013, Treasury modified the HHF to allow the HFA's of 7 states under the premise they could stabilize neighborhoods by a blight elimination program that combined the demolishing of abandoned homes with the restoration, greening and maintenance of the properties.
Post Sun Apr 09, 2017 3:39 pm 
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untanglingwebs
El Supremo

SIGTARP has criticized Treasury for their failure to include an analysis of the risks associated with blight control programs when they performed an analysis of the perceived benefits of the program. According to SIGTARP, the program under Treasury "was vulnerable to substantial risks of unfair competition practices and overcharges", which could lead to fraud, waste and abuse. Among the abuses were unfair competitive practices, bid rigging, and other "closed door" contracting practices.

Treasury failed to include any regulations that would require full and open competition and that failure left the programs at significant risk of unfair practices. SIGTARP emphasized that implementation of federal regulations was critically important to not only maintain fair programs, but to facilitate better contractor performance, cut down costs, and curb fraud, waste,favoritism, undue influence, contact steering and bid rigging.
Post Sun Apr 09, 2017 4:05 pm 
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untanglingwebs
El Supremo

Audit: $1M billed improperly for Detroit demolitions
Joe Guillen , Detroit Free Press Published 10:46 a.m. ET Oct. 27, 2016 | Updated 7:50 p.m. ET Oct. 27, 2016
635824260128069186-615Buy Photo

(Photo: Keith Matheny, Detroit Free Press)
282 CONNECTTWEET 2 LINKEDIN 42 COMMENTEMAILMORE

An internal audit of Detroit's blight demolition program released this morning found about $1 million in expenditures improperly billed to the state.

The billing errors stem from the Detroit Land Bank Authority's clandestine shifting of money within demolition contracts between June 2015 and February of this year. Demolition costs were moved from one house to another so that prices did not exceed a cap of $25,000 per house.

The audit showed that Adamo, a Land Bank demolition contractor, bid $264,155 to tear down a single property. Instead of flagging the unusually high cost, the Land Bank spread $225,155 of the costs around to other houses Adamo was under contract to tear down.
ADVERTISING

Detroit Land Bank Chairwoman Erica Ward Gerson would not name staff members who were involved. She said personnel changes have been made, but she would not be more specific. An attorney for Adamo said he could not immediately comment on the finding.

“Looking back, do I wish I spent more time worrying about the innermost details of the demolition program? Sure, absolutely," Ward Gerson said at a news conference this morning at the Land Bank's downtown offices. "The controls were not in place.”



The release of the audit comes less than two weeks after Mayor Mike Duggan's announcement that the U.S. Treasury Department suspended the program for two months beginning in August. The audit's finding released today helps explain why the program was suspended, Ward Gerson said.

The Land Bank manages Detroit's demolition program with help from the Detroit Building Authority. The program has been allocated about $250 million from the federal Hardest Hit Fund. About 8,000 blighted properties have been torn down since Duggan took office in January 2014.

As a matter of practice, the Land Bank goes through the Michigan State Housing Development Authority to tap into the federal funds and pay demolition contractors. The audit found about $1 million of expenses billed to the state housing authority should have been billed to the city instead because they exceeded the $25,000 per home cap.

A spokeswoman for MSHDA said the agency has no comment on Detroit Land Bank’s independent audit, as the MHA/MSHDA investigation is ongoing.

Aside from the audit, Detroit's demolition program is under a federal criminal investigation by SIGTARP, the inspector general in charge of monitoring the Hardest Hit Fund and other programs paid for with money from the Troubled Asset Relief Program.

Ward Gerson said the Land Bank's report is independent of the ongoing federal probe and a separate investigation of the city's demolition program by the state housing authority. Treasury and the state housing authority could find broader issues, Ward Gerson said.


The Land Bank's auditing firm, Experis-Finance, did not review the lucrative "unit-price" demolition contracts that were awarded in 2014 after private meetings between city demolition officials and demolition companies that ended up getting the contracts.

After the news conference, Detroit City Council members questioned Ward Gerson and Land Bank executive Carrie Lewand-Monroe during a committee meeting to discuss the Land Bank's quarterly report. Councilman Scott Benson requested the Land Bank provide a more detailed accounting of how it's spending a $20-million advance from the city for operations.

A $5-million escrow account set up with city money will cover the $1 million in improperly billed costs flagged today by the Land Bank's audit. The escrow account was set up as part of a new system put in place so the U.S. Treasury would lift its suspension of the city's demolition program.

Other findings of the audit include:

Nearly $825,000 in demolition costs for 100 properties were shifted among contracts to ensure no single property would cost more — on paper — than the $25,000 cap on demolition costs per property. In those cases, contractors were not paid more than they should have been, Ward Gerson said.

Auditors could not find documentation to support more than $78,400 in change orders to three contracts. “We have no way to explain why that price went up,” Ward Gerson said.

Ward Gerson said she does not believe the findings show that any laws were broken. She could not say whether the money was moved around intentionally.

“I’m actually glad that Treasury and MSHDA are continuing their investigations because if I could answer that question, I would sleep better at night,” she said. “I don’t understand how anyone could have authorized it, and yet it appears they did.”

Contact Joe Guillen: jguillen@freepress.com
Post Sun Apr 09, 2017 4:34 pm 
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untanglingwebs
El Supremo

New rules, stricter oversight after state investigates Detroit...
michiganradio.org/post/new-rules-stricter-oversight-after-st...

Oct 18, 2016 ... Two MSHDA employees will now be onsite to monitor the Detroit Land ... which come from Michigan's share of the federal Hardest Hit Fund.


All Things Considered

WUOMFM


New rules, stricter oversight after state investigates Detroit demolitions
By Sarah Cwiek • Oct 18, 2016


Detroit’s rapid-fire demolition campaign under Mayor Mike Duggan was rife with questionable bidding practices and lacked major internal controls, according to state and federal reviews of that program.

That revelation emerged Monday, as the city announced the U.S. Treasury had released another $42 million in federal funds for the program.

But that funding had been suspended for two months, as the treasury department reviewed a Michigan State Housing Development Authority investigation.

Duggan declared himself “surprised and disappointed” with those findings, which he refused to detail on Monday.

“I was very disappointed by the some of the things that I learned. We just need to fix them, and we are fixing them,” Duggan said.

The demolitions will go forward with the next round of funding from the Treasury’s Hardest Hit Fit, Duggan said. But it’s contingent on a complete overhaul of how the program does business.

Two MSHDA employees will now be onsite to monitor the Detroit Land Bank and Detroit Building Authority, the agencies responsible for demolitions. Among other things, they’re charged with making sure that “all contracts are appropriately bid.”

Other requirements include:

Demolition bid packages will be restricted in size to no more than 50 houses.
Contractors required to disclose the names of all subcontractors.
Contractors required to limit markup work performed by subcontractors by no more than 10% and must attest to their compliance.

The corrective measures suggest that the problems centered around less-than-competitive bidding and pricing processes for demolition contractors, as well as inflated billing and questionable expenses.

Federal agencies and Detroit’s Auditor General were already investigating the city’s demolition program under Duggan. Average demolition costs have spiked, and the city appeared to work with and favor certain firms early in the bid process.

The Building Authority’s Deputy Director, Jim Wright, resigned abruptly in August.

Duggan wouldn’t say whether Wright or anyone else had been dismissed as a result of the investigations. He also declined to comment on whether any of the report’s finding amounted to criminal wrongdoing.

“I’ve seen no evidence of criminal activity, but that is a question that would be most appropriately directed to other people,” Duggan said.

MSHDA was similarly tight-lipped about the exact nature of their findings, though it’s required to provide the U.S. Treasury Department with “periodic updates” about its “ongoing investigation and forensic audit” of Detroit’s program.

“The state’s initial review raised questions about certain prior transactions and indicated that certain controls needed to be strengthened in connection with the HHF blight elimination program,” MSHDA Executive Director Kevin Elsenheimer said in a statement.

The statement goes on to say the program will continue with “new controls and remedial measures,” and that “Mayor Duggan and the Detroit Land Bank staff cooperated fully throughout the process.”

Michigan has received $381 million in HHF money for blight elimination programs, by far the most of any state. Detroit was awarded $260 million of that, and has already spent nearly half of that demolishing more than 10,000 properties.

Duggan had championed the program’s speed and success at removing blight, but acknowledged Monday that it may have moved a little too fast.

“I’d say the speed with which we went outstripped the controls that we had in place,” he said.
Post Sun Apr 09, 2017 4:40 pm 
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untanglingwebs
El Supremo

Federal inspectors criticize Michigan housing aid program
Todd Spangler , Detroit Free Press Published 9:02 a.m. ET Jan. 11, 2017 | Updated 7:50 p.m. ET Jan. 11, 2017


WASHINGTON — Federal investigators released a report Wednesday criticizing the handling of a mortgage relief program in Michigan and elsewhere, suggesting that too many people making less than $30,000 a year may have been denied benefits.

The report by SIGTARP — the office of special inspector general for the Troubled Asset Relief Program — found that slightly more than half of the 160,000 people denied help under the Hardest Hit Fund since its inception in 2010 made under $30,000, raising questions whether eligibility criteria are too stringent.

“Removing unnecessary program criteria, making state agencies track why each person was turned down, and letting workers facing an upcoming layoff be eligible now before they fall behind on their mortgage can go a long way to help save homes,” said Special Inspector General Christy Romero.


The report on the Hardest Hit Fund — which is part of the overall Troubled Asset Relief Program and has committed more than $760 million to Michigan, including some $250 million to demolish abandoned structures in Detroit — didn't mention that of the nearly 32,000 families that received aid in Michigan as of the end of last June, 78% made under $50,000.


Officials with the Michigan State Housing Development Authority (MSHDA), which oversees the program in the state, also told the Free Press that 11,713 families with gross household incomes of less than $30,000 have received assistance since the program began — though that's nearly 1,000 less than the number of those making under that amount who were denied, according to the report.


“(We) take all reviews of our programs seriously and are constantly looking for ways we can improve them for the benefit of Michigan homeowners,” said Katie Bach, a MSHDA spokeswoman. “We take great pride in the fact that as of Sept. 30, 2016, Michigan's program was second only to California in the number of households helped.

“The Hardest Hit Fund has helped more than 280,000 homeowners that have experienced economic hardship. Approximately 80% of homeowners approved for HHF programs have received assistance due to a hardship resulting from either unemployment or underemployment, and more than 80% of homeowners who have received assistance have an income of less than $50,000 per year," said Mark McArdle, deputy assistant secretary for financial stability at the Treasury Department, which oversees the program.

While the additional funding committed to blight removal in Michigan under the Hardest Hit Fund has recently received attention — the Free Press has reported that SIGTARP also is leading an investigation into Detroit’s demolition program — this most recent report centers on the Hardest Hit Fund’s earlier goals of committing funds in 18 states and Washington, D.C., to help keep people in their homes at the height of the housing crisis.

In the report, SIGTARP complained that in too many cases states didn’t provide adequate records revealing why people were turned down for help. In other cases, like Michigan’s, it maintained that only vague reasons such as “borrower ineligible” were given. The report said 12,653 denied help in Michigan made under $30,000 a year — second only to the 16,706 denied in Florida. Meanwhile, the report maintained that more than 1,000 families that had made $90,000 a year received aid in Michigan.

Suggesting Michigan and Ohio could have better used funding to help prop up homeowners in areas where automakers closed plants or cut shifts, the report called for less stringent qualifications for recipients who find themselves unemployed or unable to meet their mortgage costs. That was especially true in Michigan, where rules limit help for families with mortgages no larger than 45% of their income and require a 20% cut in pay before aid can kick in.

Many of those rules were drafted when the housing and job markets, particularly in Michigan, still were in free fall. But SIGTARP noted that many other states don’t have qualifications for aid that are nearly as strict.

“Treasury and state agencies should level the playing field,” the office said in a news release. “Someone in Detroit shouldn’t face more restrictions than someone in another state.”

Contact Todd Spangler: 703-854-8947 or at tspangler@freepress.com. Follow him on Twitter at @tsspangler.
Post Mon Apr 10, 2017 6:33 am 
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untanglingwebs
El Supremo

Obama, Michigan in Talks to Free Up $100M to Aid
Detroit Pension Deal
BY: Tribune News Service | April 16, 2014
By Matt Helms, Stephen Henderson and Todd Spangler
The Obama administration and state officials are in discussions on a deal that would free up an additional
$100 million to soften the blow to Detroit pensioners, two people familiar with the talks told the Free Press
late Tuesday.
The two sources, who spoke on condition of anonymity because they weren’t authorized to disclose the
information, confirmed that there have been talks about the federal government supporting a move by the
state to give Detroit $100 million in federal money for blight remediation. That, in turn, would free up $100
million of the more than $500 million that emergency manager Kevyn Orr planned to spend for blight removal
over the next 10 years. Orr could then use that money to reduce pension cuts.
The federal funds would come from the Hardest Hit Fund, a $7.6­billion Obama administration effort
established in 2010 to help the 18 states most hurt by the housing downturn.
Michigan received $498.6 million to operate homeowner assistance programs, including those offering
mortgage subsidies, home loan rescues, mortgage modifications and principal debt reductions.
But as of last summer, only a portion — about $2 billion nationwide and about $94 million in Michigan — had
been spent.
It was at that time that the U.S. Treasury allowed the Michigan State Housing Development Authority to use
up to $100 million in unspent funds on demolitions in five cities, with the bulk going to Detroit.
The $100 million that’s now the focus of negotiations is separate from the $100 million that was set aside for
blight removal in Detroit, Flint, Grand Rapids, Saginaw and Pontiac, the sources said.
But the talks are fraught with political ramifications for both President Barack Obama and Michigan Gov. Rick
Snyder.
Obama, not keen to set a precedent of the federal government sending money to cities or states with deep
pension debts, has publicly said there’s no support for a bailout of bankrupt Detroit.
But Obama also has been under pressure from unions not to let retirees suffer in Detroit, a city that votes
heavily Democratic.
4/10/2017 www.governing.com/templates/gov_print_article?id=255463261
http://www.governing.com/templates/gov_print_article?id=255463261 2/2
Snyder, meanwhile, might risk a backlash in an election year from Republicans and outstate voters if he
outwardly appears to be supporting a shift of more resources to the city.
Snyder already has pledged the state’s support to send $350 million to the city as part of the grand bargain
to help rescue the Detroit Institute of Arts and bail out the pension funds.
He is currently courting the state Legislature for that support.
Snyder’s office declined to comment Tuesday night, as did Orr’s spokesman, Bill Nowling.
One of the sources said the $100 million in federal money was discussed Tuesday night in breakneck
negotiations that resulted in a tentative deal to reduce pension cuts for the city’s retired general workforce
and police and firefighters.
It wasn’t immediately clear whether the $100 million in federal funds is included in the calculations in Tuesday
night’s pension agreements.
The White House wouldn’t comment late Tuesday on the negotiations. But Obama administration officials
have for months been looking for ways to help Michigan and Detroit leverage existing federal funds.
(c)2014 Detroit Free Press
This article was printed from: http://www.governing.com/news/headlines/mct­obam
Post Mon Apr 10, 2017 6:53 am 
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untanglingwebs
El Supremo

Congress had concerns in 2015 over newspaper articles stated TARP funds could be used to shore up Detroit's underfunded pension system. Congress then included new provisions in the program and requested SIGTARP monitor all 19 states to ensure the states did not used these funds for pension obligations. Michigan's HFA, MSHDA, stated they complied with The Treasury demand for a segregated account to be held by the Bank of New York Mellon.


Hardest Hit Fund: State Pension Obligations - SIGTARP
https://www.sigtarp.gov/Audit%20Reports/HHF_State_Pension_Fund_Obligations.pdf
Dec 17, 2015 - Hardest Hit Fund are utilizing those monies to fund pension obligations. ... As of June 30, 2015, Michigan's HFA had spent approximately.
Post Mon Apr 10, 2017 7:00 am 
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untanglingwebs
El Supremo

[PDF]Flint Area Hardest Hit Fund #4 Strategic Demolition Plan and Funding ...
www.thelandbank.org/downloads/hhf4_april_2016_request_final.pdf
Apr 22, 2016 - The City of Flint has experienced a significant housing surplus due to its ... a total of $34.7 million in Hardest Hit Fund (HHF) dollars from the Michigan ... $100 million of its Hardest Hit Fund allocation for blight elimination ...



Personally, I don't believe the goals of the Flint master plan are in sync with the goals of the Hardest Hit Fund.
Post Mon Apr 10, 2017 7:21 am 
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untanglingwebs
El Supremo

Treasury Should Do Much More To Increase the ... - SIGTARP
www.sigtarp.gov/Audit%20Reports/SIGTARP_Blight_Elimi...

Apr 21, 2015 ... TARP Hardest Hit Fund Blight Elimination Program. SIGTARP 15-001. April 21, 2015 ... nor should. Treasury leave achievement of the goals to ...

This post addresses the goals and assessments of the achievements of Land banks and their partners. The blight elimination program is not just to tear down houses but to stabilize neighborhoods and increase home values. SIGTARP will examine demolition decisions, contractors and subcontractors. It appear that the land bank is performing correctly in their contracting at this time. But it is the City and their Master Plan that decides where demos will occur.

I found it interesting that MSHDA allows for the payment of any lien against the property before demolition as well as a $500 per parcel property management fee.
Post Mon Apr 10, 2017 8:01 am 
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untanglingwebs
El Supremo

November 20, 2015 12:01 a.m. UPDATED 11/20/2015
Flint leads 'hardest hit' Michigan cities in demolition
By Bridge Magazine

Over the past year, as Detroit officials came under fire for fluctuating demolition costs and the Flint water contamination crisis was widely publicized, Flint has been making quiet progress on another front.

The Genesee County Land Bank Authority has demolished more than 1,766 blighted houses in Flint since 2014 using federal grant money. That exceeds its stated goal of 1,600 home demolitions when the city was awarded more than $20 million in federal blight-removal funds in 2013. The Flint program also boasts lower average demolitions cost than those in Detroit, which received more than two times as much funding. The most visible sign of the city’s progress: Hundreds of lots with neglected or abandoned homes have been transformed into fields of clover.

Of five Michigan cities that shared $100 million in Hardest Hit grant funds, Flint is the only city to meet ‒ and exceed ‒ its demolition goals, state records show.

As Flint and Detroit prepare for another phase of demolition funded by a new infusion of grant money, Flint has eradicated nearly 30 percent of the city’s blighted homes.

To be fair, the blight fight in Detroit is on an unmatched scale ‒ at least 3,683 houses were demolished in Detroit with Hardest Hit grant funds, records show. And Detroit’s task remains far more daunting, with an estimated 80,000 structures that needed to be knocked down.

Nonetheless, Flint’s program is the largest blight fight in the city’s troubled history, said Lucille James, brownfields and demolition program manager for the land bank.

“We’ve never worked at this scale,” she said.

There is of course, much more to be done.

The federal blight money is intended to stabilize neighborhoods around the city’s anchor institutions ‒ “schools, hospitals, churches, main thoroughfares,” James said. “So it doesn’t address all our needs.”

Hardest Hit

A ride through Flint’s neighborhoods offers glimpses of the same sort of poverty porn Detroit has become known for: streets pocked with wood frame bungalows that now lean in on themselves, empty; brick houses, crumbling.

Yet Flint has fewer wide-eyed, gentrifying hipsters to stoke hopes, and no world-renown decay to attract attention to its plight. When Antonio Dunn drives through Flint, he hardly recognizes the city of his childhood.

But he also sees vestiges of progress ‒ soft carpets of clover grow where rotting houses stood only months ago.

Dunn, an inspector for the Genesee County Land Bank Authority, stood on Mackin Road, on the city’s north side, and explained how the north side of the block – save one vacant house – was demolished.
An elementary school stands on one end of the block.

“Before, it wasn’t safe. It was a hot mess,” Dunn said of the block. “Abandoned houses are used for trap houses, stash houses,” , referring to houses where drugs and money are hidden. “And you get the rodents and pest problems
“When we take down the blight, it just gives people room to breathe.”

In 2013, the U.S. Treasury Department gave Michigan $100 million from its $498 million Hardest Hit Fund grant (for homeowners hurt by the mortgage crisis) to focus on eliminating blighted single family homes in five cities. The big winners: Detroit, which received $57.3 million to demolish 4,000 houses, and Flint, which received $22.7 million for 1,604 houses (Grand Rapids got $2.4 million for 100 houses; Pontiac $3.7 million for 200 houses and Saginaw $11.1 million for 1,205 houses).


At the time of the first infusion of grant funds, about 6,000 houses in Flint needed demolition, James said. So the 1,766 homes demolished as of Nov. 15 represented nearly 30 percent of the city’s blighted houses.

Flint demolition rates lower

Then a few weeks ago, another wave of federal funds for blight reduction was announced. Detroit will get an additional $21 million. Flint will get an another $11 million to take out 900 vacant houses (The blight elimination in both places is administered through land banks).

The Genesee County land bank is knocking down Flint’s blight for about $11,600 per structure, while Detroit’s demolition costs have jumped to about $16,400 up from $10,000 in 2013. Overall, the demolition cost to knock down a house now averages $13,830 for a single family residence demolition in Detroit, said Craig Fahle, spokesman for the Detroit Land Bank Authority.

Fahle said Detroit house demolitions peaked at nearly 300 structures a week, but that pace “proved to overwhelm the available contractor pool.” Currently, Detroit is moving at a clip of 100 to 150 homes a week “within the existing contractor pool.”

Like Detroit, Flint saw upticks in costs when the program peaked with about 400 demolitions happening at the same time. Abatement costs, increased oversight requirements from federal and state regulations and competition for contractors drove up costs across the state, James said.

One reason Flint demolition costs may be lower than in Detroit has to do with better access to clean, safe dirt to fill the hole left by demolition, James said. Flint vendors have access to soil from nearby quarries and stockpiles of dirt, she said.

Private owners, public problem

There’s an often-repeated saying in Flint: “People moved, but they didn’t take their houses.”

The land bank estimates that Flint has about 22,000 vacant properties total, representing about a third of the city: 14,500 vacant lots and 7,500 vacant houses and commercial buildings. Of that, the land bank owns 23 percent of the vacant houses and buildings and 55 percent of the vacant lots.

It’s counterintuitive but true: most of the blighted houses in Flint are not foreclosures, but privately owned, according to the land bank.

“It can be falling down a hole and some individual could still be paying the taxes,” James said. “If the land bank doesn’t own it, our hands are tied.”

That likely will not be the case for long.

Though the mortgage and housing crisis has ebbed nationally, private owners in Flint are still losing properties to tax foreclosure in big numbers. In the past year, a couple thousand properties went to tax foreclosure and then were handed over to the land bank to either demolish or try to sell.

At that rate, the land bank will be the largest owner of Flint’s vacant buildings in the the next three years or so, said Doug Weiland, executive director for the land bank.

“It’s inevitable,” he said.

In Michigan’s hardest hit cities, more blight springs up every week. A house that is standing today could be a teetering danger by Tuesday.

Maurice Davis, 59, lives in the Civic Park neighborhood, an area populated by historic homes. Of about 1,000 parcels there, more than 200 have been demolished since last year, according to land bank records.
Davis, president of the Historic Civic Park Preservation Association and owner of a commercial strip, has bittersweet feelings about the blight fight.

Blight is wrapped around Civic Park School like a bad rash, and another 200 eyesores need to be demolished in the area, he said. He appreciates the demolition program, but wishes more money was used to preserve homes and help owners stay.

“What the land bank is doing is welcome, we need houses torn down,” he said. “But what happens to the residents who are left?”

This story was first published at BridgeMi.com. Chastity Pratt Dawsey spent more than a decade at the Detroit Free Press, and is a Detroit native. She can be reached at cpratt@bridgemi.com
Post Mon Apr 10, 2017 3:29 pm 
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