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Report: Detroit Spent Big Money To Renovate Homes Sold At Fraction Of Price

DETROIT (AP) - Detroit spent as much as $537,000 per home renovating 30 houses starting in 2011 under a federal program to fight blight before selling most for less than $100,000 each, according to a newspaper's investigation published on Thursday.

The Detroit Land Bank transformed eyesores into gems, with features such as glass-tiled bathrooms, stainless steel appliances, underground sprinkler systems and, in some cases, geothermal heating, The Detroit News reported.

A goal was to entice middle class families into the East English Village and Boston Edison neighborhoods. Land bank Executive Director Richard Wiener, who took over in January, said officials "are now moving in a different direction."

The bank is working to sell the last three homes in the program. It spent nearly $8.7 million from the U.S. Department of Housing and Urban Development on 30 homes. So far, sales have brought in about $2 million.

An average of $290,000 was spent on each home, with the 13 most expensive ones costing $300,000 to $537,000 apiece. Susan Hanafee learned from The News that $430,000 was spent on the three-story Boston Edison home she bought last year for $80,000.

"It kind of makes me sick," she said. "It didn't really need that much rehab. ... It makes me sad to think about the money that was poured into a particular house and ... to know my neighbors are having to scrape enough together to put a new roof on."

The report comes two days after a task force said removing blighted residential properties and small commercial structures that have plagued Detroit neighborhoods for decades would cost $850 million, with perhaps $1 billion more needed to tackle the bankrupt city's larger commercial and industrial property.

The 2011 program was launched amid fears that the housing meltdown was causing even Detroit's most stable neighborhoods to collapse, and some of the homes were intended for then-Mayor Dave Bing's Project 14 to attract city police and firefighters living in the suburbs.

"If we wouldn't have invested the money . those communities would have tilted the wrong way," said Bing in defense of the program.

Federal grants paid for the program and limited how city officials could spend the money.

Contractors said often the worst homes on the block were selected for rehab, some needing expensive foundation repairs, lead and asbestos abatement and new plumbing and electrical systems. Many of the homes are large.

"Wherever we go in the city of Detroit, it has to be subsidized," said Lisa Johanon, executive director of Central Detroit Christian Community Development Corp., a nonprofit that did two renovations.

"It's just what it takes right now to get Detroit on its feet," she said.

RELATED: Detroit To Sue 'Owner Of Every Single Abandoned House' In Fight Vs. Blight

© Copyright 2014 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.

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