Fixer-upper

New research supported by Poverty Solutions at U-M shows a $1 million home repair grant program in Detroit has helped homeowners with low incomes complete major home repair projects that improve the quality and safety of their housing and increase their chances of remaining in their homes long term.

These findings, outlined in a policy brief titled “Reinforcing Low-Income Homeownership Through Home Repair: Evaluation of the Make It Home Repair Program,” can help inform the city’s affordable housing strategy and guide efforts to make homeownership more stable for residents with low incomes, says Alexa Eisenberg, a doctoral candidate in U-M’s School of Public Health and Poverty Solutions research assistant.

“Detroit faces an immense burden of housing disrepair that requires prompt and substantial investments from public and private institutions to protect the health and safety of residents. Home repair funds must be accessible to people with very low incomes, and prioritize long-term residents,” says Eisenberg, who co-authored the policy brief with master’s of public policy student Connor Wakayama and Patrick Cooney, assistant director of Poverty Solutions’ Detroit Partnership on Economic Mobility.

Key findings from the research include:

• Program participants faced multiple, major home repair needs that impacted the safety and livability of their homes. Program-eligible homeowners reported an average of three major repair needs. The most common need related to roofing.
• Small-sum repair grants addressed many of the participants’ critical repair needs. A median of $6,000 per participant in monetary and in-kind grants enabled homeowners to address, on average, one of every two major repair needs.
• Homeowners reported improvements to the safety of their housing and stability of their ownership as a result of the program. All participants said the program was “very important” or “important” for their household’s safety and ability to stay in the home; one-quarter reported that without the program, they would have had to leave the home permanently.
• The program provided homeowners streamlined access to emergency repair funds that likely would have been unavailable otherwise, but gaps and challenges remain. All of the homeowners interviewed stated it would have been difficult to make repairs without the program; 75 percent were “not confident at all” they would have accessed another grant or loan for assistance. Still, ongoing repair needs and high housing cost burdens remain a challenge for some participants.

Detroit’s rental market is growing increasingly competitive, as homeownership rates dropped following the city’s mortgage and tax foreclosure crises. In 2019, housing costs were unaffordable for 73 percent of Detroit renters earning less than $35,000, which is about the median income in the city.

Stability strategies

Housing advocates and local officials increasingly have looked to homeownership as a potential strategy to increase housing stability for low-income households. Home values are low and many homes are available through foreclosure sales, which makes homeownership more feasible for families with low incomes in Detroit than in other housing markets, Eisenberg says.

However, Detroit’s aging housing stock and cycles of disinvestment from speculative landlords have left many properties in substandard condition. A recent Poverty Solutions report conservatively estimates more than 24,000 houses in the city are moderately or severely inadequate. That report found the most common housing quality issues facing Metro Detroit residents include inadequate heating, exterior water leaks, signs of mice or rats, and weak foundations.

Since 2017, the city of Detroit, Rocket Community Fund, and the United Community Housing Coalition have implemented the Make It Home program, which has offered more than 1,100 occupants of tax-foreclosed houses the chance to purchase (or re-purchase) their homes through a one-year 0 percent interest loan to cover the cost of back taxes. An ongoing evaluation of the 2017 Make It Home pilot program found all of the home purchasers who were interviewed had repair needs.

Rocket Community Fund contributed $300,000 and worked with UCHC to launch the Make It Home Repair Program in 2019 to address the home repair needs of Make It Home participants; Rocket Community Fund has since contributed another $700,000 to the program. The program is also supported by the Sheldon Foundation and the DTE Foundation.

“Make It Home takes an incredibly destructive system and uses it to instead build homeownership, wealth, and stability for hundreds of Detroit families,” says Laura Grannemann, vice president of Rocket Community Fund. “Our $1 million investment into the repair program has funded improvements that have turned these houses into homes, and we’re grateful to Poverty Solutions for their critical research highlighting the efficacy of this program.”

Recommendations

In 2019, 261 homeowners pursued assistance through the Make It Home Repair Program, and UCHC worked with 62 homeowners to complete repairs.

“As far as bills, I can basically handle it. You’ve got to pay those. But the repairs, trying to fix what you got, I can’t keep up with that,” said one of the 24 homeowners interviewed for the research.

In addition to interviewing homeowners, Poverty Solutions researchers reviewed intake data for 218 Make It Home homeowners who sought home repair assistance.

The policy brief includes several recommendations to build on the successes of the Make It Home Repair Program:

• The city of Detroit, nonprofit entities, and their philanthropic partners should prioritize occupied housing for home repair investments and couple programs that convey foreclosed homes to their occupants with adequate resources for major home repairs.
• State and local governments should provide streamlined access to small-sum emergency grants for health and safety repairs.
• The city of Detroit can restructure its 0 percent Interest Home Repair Loan Program to serve homeowners with very low incomes by offering deferred loans with no credit score requirement.
• The city of Detroit should enforce its rental ordinance and strengthen tenant protections to improve conditions for renters and prevent further deterioration of Detroit’s affordable housing stock.
• The federal government should invest substantially in home repair and new affordable housing, especially in cities harmed by a legacy of structural racism and discrimination in housing.

“The immense scale of Detroit’s unmet home repair needs is in large part a legacy of anti-Black structural racism and discrimination in the U.S. housing system, which was shaped by policy decisions of the federal government,” Cooney says. “This relegated Black households to older, disinvested housing and denied opportunities for homeownership, economic mobility, and wealth creation. Federal support for home repair in Detroit and other predominantly Black communities can serve as an insufficient but necessary measure to remediate some of the harm caused by a history of racial injustices.”