DETROIT – The federal government and state housing authorities are forcing a major reset of Detroit's anti-blight program. They are releasing $42 million in new funding to keep the program going, but only after imposing new safeguards and oversight over the Detroit Land Bank.
In August, the feds directed the state to suspend its portion of the demolition program, after a yearlong review of the program found federal tax dollars were spent on ineligible expenditures. Uncle Sam is now only releasing the money after new financial controls are in place.
The $42 million released last Friday is the last installment in $130 million in anti-blight money to take down another 10,000 houses.
Since the federal investigation into 2014 demolition contracts was announced, the Duggan administration has repeatedly insisted its practices were sound. The review found otherwise.
As a result, state housing officials will embed two overseers in the Land Bank and Detroit Building Authority, reviewing all bids, contracts and expenditures.
Quality control audits will assure compliance, and the Lank Bank must fund a $5 million escrow fund to cover ineligible expenditures if any arise.
Mayor Mike Duggan wouldn't say how much money was inappropriately spent or how widespread the problem was.
You can watch Guy Gordon's full story in the video posted above.
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