Living Cities Funds Strategic and Innovative Approach to Foreclosure Crisis in Detroit
Reprinted with permission from Living Cities: The National Community Development Initiative.
TROY, MICHIGAN – Foreclosures, like the subprime lending that precipitated them, have been heavily concentrated in vulnerable neighborhoods. The resulting vacant and abandoned properties threaten values of neighboring homeowners, invite crime, and discourage further investment.
In response, Living Cities, a collaborative of major philanthropies and financial institutions, has announced the awarding of its first round of grants, $3,750,000, to support innovative, locally driven responses to combat the crisis.
As part of this multi-city pilot, the Detroit Economic Growth Association will be awarded $500,000 to enable it to provide staff for the newly created Office for Foreclosure Intervention and Response to be housed within the Detroit Economic Growth Association. The Association provides multiple services to the city, including business recruitment, downtown redevelopment, financing programs for business development, and project management for projects that require private as well as public involvement.
"Living Cities early and flexible funding has enabled a unique, market-appropriate response in Detroit, starting with local and national foundations coming together to coordinate their efforts with those of nonprofits, banks and the City,” says Rip Rapson, CEO of The Kresge Foundation. “Given the scale of the problem, anything less than a strategic response would be a poor use of both time and money as the foreclosure crisis continues."
Ben Hecht, President and CEO of Living Cities, further notes that, “Woefully underrepresented in the subprime discussion are the voices of millions of hard working families whose home values have plummeted by $200 billion simply because they live on blocks with clusters of foreclosed homes. We expect our support to help build scalable models that will serve as blueprints for communities around the country when and if federal aid for such activities is made available.”
The grants will go to models being built in strong, moderate and weak housing markets, using mechanisms as diverse as New Market Tax Credits, land trusts, and non-profit real estate brokers. In addition to grant funds, Living Cities will be considering requests from these grantees for up to $5 million in patient capital in the form of long-term, low-interest rate loans from its Catalyst Fund, a new pool of funds provided through program related investments from Living Cities’ members. Decisions on these loans will be made later this summer.
About Living Cities
Living Cities is the most enduring philanthropic and private sector collaborative in the world, with investments in America’s cities totaling a half billion dollars over the past 15 years, leveraging over 15 billion dollars to revitalize Urban America. Living Cities supports bold, promising approaches that take advantage of cities’ unique roles in America’s economic prosperity and that have the potential to transform the lives of low-income people and the communities in which they live. For more information, please visit: http://www.livingcities.org
Living Cities members include: AXA Community Investment Program, Bank of America, The Annie E. Casey Foundation, J.P. Morgan Chase & Company, Deutsche Bank, Ford Foundation, Bill & Melinda Gates Foundation, Robert Wood Johnson Foundation, The Kresge Foundation, John S. and James L. Knight Foundation, John D. and Catherine T. MacArthur Foundation, The McKnight Foundation, MetLife, Inc., Prudential Financial, The Rockefeller Foundation, Surdna Foundation, US Department of Housing & Urban Development. Affiliate Member: The Cleveland Foundation.