Detroit’s Housing Loss Prevention Program Returns Homeownership to 85% Four Years Later

Contacts: Lauren Slagter, [email protected]; Nardy Baeza Bickel [email protected]

DETROIT — A program designed to help Detroit renters buy their homes has helped 85% of participants stay on as homeowners for four years, a milestone as homeowners can begin to see wealth-building and other benefits of home ownership after at least five years of home ownership. ownership.

The findings of a evaluation of the Make It Home program by the University of Michigan also offers recommendations for maintaining homeownership among more low-income households, such as providing financial advice, a home inspection before buying the house, and financial assistance for repairs major, if necessary.

“The study underscores the importance of affordability and decent housing in promoting stability among low-income people,” said Roshanak Mehdipanah, associate professor of health behavior and health education at the School of UM Public Health and co-author. of the Make It Home assessment. “Renters who had no path to homeownership experienced the most instability.

The UM analysis focused on the first year of the Make It Home program in 2017, when the city of Detroit used the right of first refusal to help 80 Detroit tenants buy their homes. People in the program lived in properties subject to tax foreclosure, meaning the owner had not paid property taxes for at least three years.

The City of Detroit used funds donated by Rocket Community Fund (formerly Quicken Loans Community Fund) to purchase homes seized by the Wayne County Treasurer and transferred them to the United Community Housing Coalition.

UCHC then sold the properties to tenants with quitclaims or 0% interest land contracts, an alternative to a mortgage that allows potential buyers to make monthly payments toward home ownership. .

Since its inception, Make It Home has helped nearly 1,200 Detroit households avoid home loss by giving them the opportunity to purchase the properties where they live.

By the end of the program’s first year, 81% of the initial 80 Make It Home participants (65) fully owned their homes or continued to hold a land contract. In the four years since the tax seizure of properties in 2017, Make It Home has enabled 85% of participants to gain sustainable access to property. The median household size of the initial Make it Home group was three people, and 89% of participants earned less than $37,080 per year.

“The Make It Home program has two main objectives: to prevent tenants from losing their homes in the crisis of a landlord’s tax foreclosure and to help them maintain their property. Our evaluation found that the program achieved these goals for 85% of its first group of participants,” said Margaret Dewar, professor emeritus of urban and regional planning at UM and co-author of the evaluation of the Make It program. Home.

To compare the results, the researchers also looked at the results of 154 households with similar characteristics that UCHC tried to help buy in the 2017 county tax auction. Of this group, only 27% are who became owners four years later, 109 saw their homes sold at auction and 15% of these tenants were evicted over the next four years.

In the initial Make it Home group, six households that successfully purchased their home went on to sell their home after less than four years of ownership. But even those homeowners said they were glad they were able to buy their home and wanted to stay despite the hardships they had encountered, the researchers said.

One participant said that Make It Home reduced the “bad feeling [of] having no place to live,” while another said the program offered the opportunity to “save the house” where the household had lived for a long time. Participants spoke of the “ease” of owning their home with the support provided by CUHC. For some, home ownership seemed out of reach before this process.

The researchers said that many factors threaten program participants’ continued homeownership. More than 30% of Make It Home buyers were facing impending foreclosure for non-payment of property taxes. Two owners left their houses vacant. Landlords cited difficulties related to the poor condition of homes, high housing expenses and loss of income during the COVID-19 pandemic.

“People said they sold their homes because they couldn’t keep up with repairs and the lack of maintenance posed health risks. They sold because a loved one died, a relationship ended, or an investor pestered them to sell the house. Housing instability compounds the stress of dealing with these life crises,” Dewar said.

The researchers recommend ways to improve sustainable homeownership rates for low-income buyers, including:

  • Provide homeowners with pre-purchase education and financial counseling to help people establish the financial stability needed to buy and continue to own a home;
  • Inspect homes before buying, so that potential buyers have a clear idea of ​​the extent of the repairs needed;
  • Increase awareness and access to home insurance, as land contracts do not require the buyer to purchase home insurance and repair costs can be costly;
  • Provide financial assistance for major home repairs to people who cannot get a conventional home improvement loan or home equity line of credit due to low credit scores, lack of equity in a property or a lack of disposable income for loan repayments; and
  • Make available post-purchase support such as utility payment plans and property tax relief to address ongoing housing costs and prevent housing loss.

“Additional support services would help ensure owners receive the benefits of longer-term homeownership. In Detroit, assistance with enrollment in property tax relief programs is vital because tax delinquency can quickly result in the loss of a home,” Mehdipanah said. “By monitoring efforts like the Make It Home program over time, we’re gaining new insights into the challenges homeowners face and the types of support that would make a difference.”

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Ryan H. Bowman