More than 20,000 vacant houses create blight in Detroit.
Detroit’s ambitious project to renovate and demolish thousands of homes will move forward soon after the city announced Friday that it has sold $175 million in bonds to finance the endeavor.
Voters in November approved the sale of the bonds as part of Prop N, an initiative to sell $250 million worth of bonds to demolish 8,000 dilapidated houses and fix up another 8,000 salvageable homes.
The city plans to sell another $75 million in bonds next year.
Mayor Mike Duggan said the city, which emerged from bankruptcy in December 2014, had no problems selling the first bonds, a strong sign that the city has bounced back financially.
“The incredibly strong interest in these bonds is a direct reflection of investor’s confidence in Detroit’s strong financial management and that starts with our Office of Chief Financial Officer,” Duggan said in a statement. “CFO Jay Rising, Chief Deputy CFOs Tanya Stoudemire and John Naglick, and their entire team have done a tremendous job managing the city’s finances to put us in a strong position, now and for the future.”
The city will begin preparing the vacant Land Bank houses until they can be demolished or renovated.
The City Council is expected to soon approve contracts for the first 1,380 demolitions. All seven companies involved in the first demolitions are headquartered in Detroit, and five are Black-owned, the city said.
The strong interest in the bonds helped Detroit secure a relatively low 3.36% interest rate.
“Investors took notice of Detroit’s steady progress in building financial strength and swiftly responding to the pandemic driven revenue shortfalls,” Rising said. “They saw that while the COVID-19 crisis may have slowed this positive trend, it did not reverse it.”
Supporters of Prop N said the project is important because blighted homes increase crime, attract arsonists, and lower property values.
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