Detroit Housing Crisis, Progress but a Long Way to Go

Detroit    The panel organized by the Detroit School at the University of Michigan – Dearborn had an ominous title: “Post Crisis Housing Markets and Housing Insecurity.”  In Detroit, not unlike so many other cities around the world now, when you couple “Post Crisis” and “Housing” in the same phrase you are definitely either very hopeful or asking for trouble.  The housing crisis in Detroit as been horrid for half-a-century at the least, so post-crisis referred to the 2008 national meltdown of course.

The crowd on a miserable winter night in Detroit, which is to say, a normal winter night in Detroit, was deeply informed and hugely engaged.  The panel was authoritative.  Christine Macdonald of The Detroit News and Allison Gross of the Free Press had both deeply reported on housing issues, were well versed and knew the players on all sides of the field.  Professor Josh Akers from UM-Dearborn and his colleague Eric Seymour, a PhD now at Brown, had deeply researched the housing market and the level of insecurity for families.  Both had been wildly helpful to the ACORN Home Savers Campaign in getting a handle on companies operating in the margins with sometimes questionable and often predatory products often contributing to housing insecurity.

Professor Akers, as the moderator, gave the background and the numbers of foreclosures, the impact of subprime lending, and the level of continued abandonment were unsettling, no matter how often I had heard them.  The reporters unpacked the impact of recent programs like the “right of first refusal” which allowed the city to pick up homes in foreclosure and potentially offer them back to families at real or current market value, rather than the pre-2008 recession levels.  They shared the problems they faced in keeping these stories flowing in the exhaustion of their editors, and perhaps the public, felt in facing this continual train wreck.  Eric Seymour filled in the gaps that both he and Akers had worked on to supply both reporters and ACORN with the raw data to fuel their reporting and our work.

As Greg Markus, a retired professor and key organizer with Detroit Action Commonwealth, pointed out in the question & answer after the panel, the twin crises of mortgage foreclosures from the banks and tax sales triggered by the government had deepened the crisis in Detroit.  He argued as well that the ACLU suit that upbraided the city for not allowing low income families to take advantage of the tax exemptions that has now slowed the auctions as well as the work being done by reporters, scholars, activists, and community organizations showed real progress moving forward.  Christine Macdonald nodded but pushed back that none of these things repaired the damage to families who had already lost and been ejected from their homes or the permanent scars it created in the neighborhoods.

It was an excellent conversation without real joy.  There is great work happening in Detroit, but too much of the effort for too many decades has been Sisyphisian with the rocks almost getting to the top of the hill, then pushed back down again.  I mentioned a memorandum I had stumbled on in the ACORN archives from 2003 from the Detroit ACORN office on a collaboration with the City and its financing to allow families to rehab houses and then waive taxes and purchase requirements.  Then the numbers of houses abandoned was 30,000.  Now, the land bank alone has perhaps 80,000.

This is where the fight has to be joined, but whether a model for the future that would assure housing stability can be found without a radical rethinking that puts families and not realty interests and developers first is still very much in doubt.

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The Census and Contracts-for-Deed

Little Rock       One somewhat nagging problem the ACORN Home Savers Campaign has confronted over the last several years, especially when we looked at the frequency of “contracts-for-deed” was the lack of definitive data.  Sure, we knew in Detroit that more contracts-for-deed were being registered under real estate transfers in recent years than were any form of traditional mortgages, but such information was local, not uniform, and decidedly not national.  For some inexplicable reason during the aftermath of the Great Recession in 2008, the Census Bureau under President Obama dropped the question from the 2010 census creating a black hole on a gnawing problem.  We can guess why, but we don’t know definitively.

My comrade and friend, the filmmaker Charles Koppelman, joined ACORN’s “volunteer army” when we were hitting the doors in Pittsburgh in the spring of 2017 trying to get to the heart of these issues with the Home Savers Campaign.  He had his camera rolling when a local Pittsburgh ANEW member and I were visiting with a woman, as she lay on her couch recovering from back surgery, in her home.  At first, she said she didn’t have a contract-for-deed, but the more we talked the clearer in became that she had a 30-year contract with a subsidiary of Harbour Portfolio, that was absolutely a contract-for-deed.  The interest rate was 12%.  The terms were onerous.  The contract was precarious.  If she missed a payment, they could take back the house, and she would lose everything.  Harbour, a Dallas-based hedge fund, had flaunted the fact that it was using such contracts to flip thousands of properties it had acquired at foreclosed property auctions conducted by Fannie Mae and Freddie Mac.  She was ready to organize with the campaign once she got back on her feet.  Charles learned more in talking to us about the situation so knew the information gap created by the Census that was preventing a full understanding of how widespread the return of such contracts might be.

Charles lives in the Bay Area of California.  He sent me a screen shot of something very interesting yesterday.  He had received a Census form to fill out in the mail, and darned if it didn’t have a question – once again – asking whether the household was under a contract-for-deed.  Voila!   Some bureaucrat deep in the bowels of the Census Bureau must have seen the smoke signals about the fact that this often-predatory product is back, and slipped the question back into the queue.

It will help, but it’s no panacea of course.  The visit in Pittsburgh 18 months ago provides that answer.  Too often given the desperation that pushes many families into these kinds of agreements as they search for affordable housing in almost any condition also leaves them uncertain of the details, including what to call the agreements they have signed.  The brokers are often very loose lipped in the way they encourage people to see such agreements as mortgages.  Others agreements that are only different in degree, like Lease-Purchase-Options, Rent-to-Own, Lease-to-Own, etc, etc, aren’t contracts-for-deed that are now actually monitored by Dodd-Frank but should earn a “check” in that Census box as well.

The data won’t be perfect by a long shot, but magically we are somehow back to where we were in 2000 when the numbers were last counted, so on the 2020 Census the inclusion of the contracts-for-deed question is at least something to put in the good news column.

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