NCPA - National Center for Policy Analysis

Battling Blight in Detroit

March 12, 2013

Blighted properties are structures that have been declared vacant, uninhabitable and hazardous by an administrative official. For Detroit, which is the grips of serious fiscal woes and has a long history of decline following shifts in the auto and manufacturing industries, blight is the most characteristic feature. The blight problem throughout Detroit's 139 square miles is creating significant challenges for local government that must be addressed, says Jillian Kay Melchior, a Thomas L. Rhodes Fellow for the Franklin Center for Government and Public Integrity.

  • Between 2000 and 2010, the city of Detroit lost 237,500 residents, or 25 percent of its population.
  • As a result, more than 38,000 homes are listed on Detroit's Dangerous Building Inventory and more than 80,000 addressed no longer receive mail.
  • The abandoned buildings create opportunities for arsonists, who started more than 11,000 fires per year over the last decade, 60 percent to 70 percent of which were in blighted buildings.

Though there is one act of arson for every 65 people and one home in 20 is in foreclosure, Detroit's bureaucracy has been hesitant to take any action. Demolition efforts are expensive and inefficient, requiring a raft of paperwork and signatures.

  • A demolition permit costs $254, disconnecting the water costs $660 and it is an additional $720 to turn off electric and gas; filling the sewer line adds an additional $500 to $1,000.
  • In a city with stagnant wages and intense pockets of poverty, a single demolition costs between $10,000 and $12,000.
  • Each demolition is expensive for a city that has accumulated a $327 million deficit.

One effort to reduce the blight is turning abandoned properties into works of art. But the blight hints at deeper issues Detroit must deal with. With government broken, free market approaches are providing the solution.

  • The Pulte family's company, Pulte Capital, which is the largest homebuilder in the United States, built its first house in Detroit in 1950.
  • Pulte Capital has started a pilot program, The Blight Authority, with the city of Detroit that applies free market principles to housing demolition, in turn demolishing houses for half of the price the city could.
  • The Blight Authority has demonstrated that it can tear down a house for $5,000.

Eliminating blight in Detroit would be much easier if red tape were removed. Abandoned buildings are only one of the many challenges Detroit currently faces.

Source: Jillian Kay Melchior, "Battling Blight in Detroit," National Review, March 6, 2013.


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