MichiganRadio

Facing the Mortgage Crisis: Cleaning Up in the Wake of Foreclosed Homes ANN ARBOR, MI (Michigan Radio) - Foreclosures don't just hurt families, they hurt entire neighborhoods. Foreclosed properties reduce the value of other homes around it, and if houses sit vacant too long, they attract vandalism and crime.

A new federal program is providing millions of dollars to help stabilize these neighborhoods.

"Good morning, good morning, good morning," says John George,"Could everybody just step forward for a moment please so we can talk a little bit? Everybody have gloves? Everybody have dust masks?"

John George is standing in front of a giant pile of rubble in on a residential street in northwest Detroit. He's giving instructions to about 40 volunteers, mostly school kids from Ann Arbor, who are helping him clear a demolished house.

"I want you guys to start now, with these cans, loading everything up except the wood. OK?" says George.

George runs a group called Blight Busters. The group is using some of the $47 million dollars the federal government is pouring into Detroit as part of its Neighborhood Stabilization Program. The Blight Busters use the money to tear down vacant houses.

"It's important that you nip it in the bud before it spreads and kills the rest of the neighborhood. This particular house was a home for many, many years, became vacant, and then became a nuisance with people in and out. We call this negative energy. It is our goal to clear all of this negative energy off of this lot, fill in the hole, grade the lot, put up a white picket fence and create a neighborhood gathering place," says George.

Only California and Florida got more stabilization money than Michigan and a second round of grants is underway. George hopes much of the new money will come to Blight Busters.

"We're looking for some significant dollars to allow us to not only continue, but really put this neighborhood back on a strong foundation," says George.

Only 6% of the stabilization money across the country is being used to tear houses down, but Detroit is using a third of its money for demolition and more than 3,000 vacant homes were demolished last year.

Kevin Vettraino is the community and economic development planner at Southeast Michigan Council of Governments. He says in a major urban area like Detroit, that is losing jobs and population, a vacant home in a neighborhood can have a domino effect.

"One turns into two, turns into three, no one wants to be on those blocks that, you know, have that sign that says foreclosure or has those lawns with the high grass. It spreads like wildfire in this kind of economy," says Vettraino.

But not all the neighborhood stabilization money in Michigan is used to tear houses down. Vettraino says in many communities outside Detroit, the money is used to make sure vacant homes don't look vacant.

"We're seeing a lot more of that going on, the code enforcement really getting the proactive approach before it gets to a point where the property is abandoned," says Vettraino.

I'm standing on the front porch of a vacant foreclosed house on Holly Rd. in Fenton. If it weren't for the notice on the windows, you wouldn't know that this house was any different from any other house in the neighborhood. The grass is cut, the windows have glass in them, there's no trash or debris around except for the garden hose still attached to the side of the house.

"Those types of aesthetic things I think, are very important," says Lynn Markland, the city manager for Fenton. He says because his city is small, they can enforce the codes on vacant properties.

"We don't allow the homes to be boarded up and we're also very aggressive about making sure the lawn is mowed. You can't necessarily just drive down the neighborhood and see homes boarded up," says Markland.

Fenton only received $330,000 in Neighborhood Stabilization. But it's using most of the money to buy foreclosed homes, fix them up, and sell them to families that will live in them. Markland says they aren't allowed to make a profit on the homes, but they do recycle the money.

"Once the house is sold the money comes back into our pool of money and the money gets recycled into another project. We hope to do about six homes a year," says Markland.

Those six homes are only 10% of the roughly 60 foreclosed homes

sitting vacant in Fenton right now, but it is a start and Markland says they buy and sell the homes they believe will have the most stabilizing affect on a neighborhood.

The next round of neighborhood stabilization money is scheduled to arrive at the end of the summer, and whether cities use the money to tear homes down, or fix them up for sale, the goal is to make only one home the neighborhood victim of a foreclosure. © Copyright 2012, Michigan Radio