Abandoned and dilapidated residential properties have been torn down throughout Michigan after the U.S. Treasury Department allowed money from the “Hardest Hit” foreclosure relief fund set up by the Troubled Asset Relief Program to be used to take down the homes. Now, it looks like the same thing may be happening soon with vacant and abandoned commercial properties.
According to reports, Rep. Dan Kildee has asked the Treasury Secretary to allow the funds to be used for the commercial buildings, arguing that the precedent was set when the funds were used for the residential properties. Kildee argued in a letter sent to the Treasury Secretary on July 8 that doing so would protect property values and hopefully keep residents in the area.
The issue was also discussed at the June meeting of the House Financial Services Committee, where Kildee claimed that demolition in another city had dramatically improved property values. At that meeting, the Treasure Secretary indicated that he would consider the issue and whether or not the application of the funds should be broadened to include the commercial demolition.
According to reports, Detroit is home to more than 2,000 commercial buildings classified as blighted or vacant, and a report published in May stated that it may more than $1 billion in funds to deal with the commercial properties alone. While the chances of that amount of money coming through are extremely slim, any time abandoned or blighted properties are removed from an area, property values are likely to increase. The situation may be more complex for the owners of these properties, however, and they may be able to benefit from discussing their individual situations with someone familiar with commercial real estate law.
Source: The Detroit News, “Kildee asks U.S. to approve funds for commercial blight removal in Michigan” David Shepardson, Jul. 11, 2014