How is the city of Detroit spending its COVID recovery funds? According to new research from the Federal Reserve Bank of Chicago, Detroit officials are mostly using these dollars to remove or improve abandoned commercial and industrial structures.
This isn’t surprising. Detroit Mayor Mike Duggan has focused on removing abandoned homes, commercial buildings, warehouses and other structures as one way to revitalize the city. Duggan even has a name for this effort: the Blight to Beauty strategy.
Under this program, the city of Detroit is focusing on removing blighted properties in 14 commercial corridors.
“We are working around the clock to make sure there is visible change for Detroiters,” said Katrina Crawley, assistant director for blight remediation for the cit of Detroit, in an announcement last year. “By doing this work, we increase awareness about the actions the city is taking to reduce blight for the health, safety and dignity of Detroiters.”
The program has identified the following commercial corridors for its blight remediation efforts: Jefferson, Warren, Gratiot, Van Dyke, Michigan, Livernois, Woodward, Mack, Harper, Mt. Elliott, Grand River, West Vernor, Seven Mile and McNichols.
The goal of the program is to encourage owners of blighted properties to repair and renovate the buildings. In some cases, the city might raze abandoned buildings that are beyond saving.
According to researchers Emma LaGuardia and Rick Mattoon with the Federal Reserve Bank of Chicago, the city of Detroit is spending 86% of its federal COVID relief funds on counteracting negative economic impacts. And the biggest chunk of this spending by far has been reserved for the blight remediation program.
The blight remediation project was less than halfway completed as of the fourth quarter of 2022. The city of Detroit had set aside more than $87.8 million for the remediation program.
Detroit used 10% of its COVID funds for administrative uses and 4% on public health spending.
The funds that Detroit and other cities and states received are part of the federal government’s American Rescue Plan Act. Under the Coronavirus State and Local Fiscal Recovery Funds program, better known as SLFRF, the federal government has allocated more than $350 billion to state, local and tribal governments.
Overall, the city of Detroit was awarded $826.7 million from the American Rescue Plan. Cities, states and tribal governments must attach the SLFRF portion of these funds to specific projects by the end of 2024 and must spend them by the end of 2026. Recipients are not allowed to use their SLRFR allocations to offset losses in tax revenue resulting from a change in law, pay debts or replenish rainy day funds.
