The housing crisis from 2006 to 2008 devastated the country, and Detroit was not immune. Between 2005 and 2015, nearly half of Detroit’s homeowners found themselves underwater on their mortgages, resulting in 120,000 foreclosures and, more importantly, the depletion of generational wealth for Black residents in particular.
Detroit’s housing values plummeted—82% during the housing crisis—significantly depleting Black generational wealth. The City of Detroit’s goal has always been to place homes back into the hands of Detroiters while raising housing values.
How Detroit Created
$3.9 Billion in Generational Wealth
Mayor Duggan understood that the essence of generational wealth rested in the value of the family home. As home values increased, they would stabilize Detroit neighborhoods.
This is the story of how Detroit nearly doubled property wealth from $4.2 billion in 2014 to $8.1 billion in 2022.
The 2014 Property Value Starting Line
In 2014, Detroit’s landscape was populated with over 40,000 vacant houses and over 100,000 neighborhood vacant lots. Detroit’s median home value was $14,000, while the national median home value was $275,000. This is how Detroit grew from less than 375 mortgages a year (2009-2013) to 2,765, contributing to Black wealth of $2.8 billion—an 80% increase.
Many Detroiters wanted to purchase homes in 2014 and had good credit scores and stable incomes, but there were challenges. Most banks were reluctant to issue mortgage loans because of low home appraisals and a lack of comparable nearby homes for comparison. The result was that 80% of home sales in Detroit in 2014 were cash.
Detroit Home Mortgage Program
Mayor Duggan solved this problem by partnering with a diverse group of organizations including the President Obama Administration’s Detroit Federal Working Group, the Clinton Global Initiative, local banks, and credit unions.
The goal of Detroit Home Mortgage was to increase the number of mortgages by bridging the appraisal gap and helping to fund renovations until traditional mortgages became more obtainable. This resulted in at least 232 mortgages.
First Time Homebuyers
Down Payment Assistance
Detroit committed itself to turning renters into homeowners and increasing the value of each home purchased. In 2023, Detroit inaugurated its Down Payment Assistance (DPA) program to help qualified first-time homebuyers. Grants up to $25,000 were available per Detroit resident.
Detroit’s Down Payment Assistance Program
Became a National Model
To qualify, applicants could not currently own a home and had to earn less than $41,000 annually (for a single person).
The program started for Detroit residents like Satin Adams. She lived in subsidized housing with her six children and dreamed of a house with a yard for her children to play in. With the DPA, she was able to purchase a single-family home in Morningside.
Detroit Land Bank Authority
and Housing Programs
Housing Auction & Own It Now Program
The Detroit Land Bank Authority (DLBA) established a unique online auction program for vacant homes, selling three homes every weekday during an 8-hour window. The Own It Now (OIN) program offered vacant homes with a minimum offer price of $1,000, requiring buyers to rehab and occupy the properties.
Buy Back Program
The Buy Back Program helped Detroiters at risk of foreclosure regain ownership of their homes, supporting the return of generational wealth to families. “Working with the Land Bank was a great experience,” said Emoni Davey, a participant in the program.
Rehabbed & Ready
The Rehabbed & Ready program aimed to stabilize neighborhoods by investing in quality improvements—energy-efficient HVAC systems, new windows, sewer and water lines—and completing environmental abatement before listing homes for sale. At least 200 homes were targeted for renovation.
Detroit Land Bank
Innovates a Pathway to Homeownership
Kendra Watts, holding the deed to her family home, saved her property from foreclosure through Detroit’s Buy Back Program which has returned 1,200 homes back into the hands of Detroiters.
50% for City Workers & Educators
To facilitate Detroit city workers’ ability to own a home, in 2015, the DLBA began its City Employee Discount Program, allowing city employees—including full-time educators and support staff within the City of Detroit—access to the DLBA inventory at half off of the listed price or auction price.
Compliance Requirements
Just under 11,000 of the DLBA’s structures between 2014 and 2022 went to Detroiters, many of whom were first-time homebuyers. The compliance program successfully saw 10,509 owners into full compliance with the DLBA, working with the new homeowners, tracking their progress, and keeping them on schedule.
Building Wealth
Through Community Programs
After receiving a beautification grant from the City of Detroit to transform a vacant side lot, Cullin Flynn and his neighbors planted several dozen fruit trees, bushes, and shrubs, along with ornamental perennials and annual vegetables.
Neighborhood Beautification Program
By 2022, the Neighborhood Beautification Program was in full bloom. This city-led campaign offered organized neighborhood groups grants ranging from $500 to $15,000 to establish gardens, make public space improvements, and conduct clean-up activities.
Illegal Dumping and Alley Clean-Up
The City of Detroit has removed brush and trash from 3,026 alleys, which equates to 15 million square feet and 90,000 tons of debris. Neighborhood groups also make a commitment to maintain the alleys, helping reduce significant citywide blight.
Home Repair Initiatives
Barbara I’Ron embraces Mayor Mike Duggan as a warm thank you for her new roof through the Detroit Home Repair Fund. I’Ron’s roof was the 500th completed repair since the program’s inception.
Detroit Home Repair Fund
The $45 million Detroit Home Repair Fund first began offering 0% interest loans, from $5,000 to $25,000, in April 2022 to assist Detroit homeowners in investing in and repairing their homes. This program has helped more than 160 Detroiters.
Renew Detroit Essential Home Repair Fund
The Renew Detroit Essential Home Repair Program, funded with $30 million from the American Rescue Plan Act and $15 million from the state of Michigan, provides assistance to low-income, senior, and disabled homeowners.
Duplex Repair Program
Funded with $2.3 million of Detroit’s ARPA dollars, the grant-based Detroit Duplex Repair Program allows qualified landlords to apply for grants of up to $15,000 per unit to obtain a rental Certificate of Compliance.
Detroit Approaches the Finish Line
Detroit’s meteoric rise in home appreciation occurred because Mayor Mike Duggan, City Council, and dedicated Detroiters combined their vision with pragmatic planning. Detroit went from bankruptcy receivership to an investment-grade credit rating in 10 years with a double-notch credit upgrade.
In 2014, Detroit’s owner-occupied homes only held a collective property value of $4.2 billion. By 2022, that number nearly doubled to $8.1 billion. This increase is nationally unprecedented.
Focus on Increasing Home Values
Mayor Duggan understood that there are many paths to build generational wealth, but he placed the city’s focus on increasing home values knowing its power in transforming neighborhoods. The city’s programs and initiatives all sparked from his commitment to Detroit neighbors.
That’s how a city nearly doubles its property value to $8.1 billion.