US housing recovers, but low incomes keep Detroit far behind

Associated Press

DETROIT

Ann and Oscar Mack had fallen behind on property taxes and knew they faced foreclosure on their home of 20 years. But they didn’t know their house on Maiden Street, in a blighted east side Detroit neighborhood, was already listed for auction.

No one “let us know we were about to lose our house,” Ann Mack said. “Nobody ever came out and knocked on our door.”

The United Community Housing Coalition stepped in and bought the home for $1,000 at a foreclosure auction, then returned the deed to the family. It and other nonprofits are the final options for hundreds of Detroit residents fighting foreclosures, auctions and evictions.

A decade after the nation’s housing bubble peaked before bursting in a ruinous crash, much of America’s residential real estate has rebounded. Many owners have enjoyed rising equity and lower housing bills as mortgage rates have sunk. Yet Detroit is a glaring exception. Despite efforts by the mayor’s office, lenders and community groups, home values remain depressingly low.

A big reason has been oppressively low incomes in the city. Even as home prices have dropped, too few can afford to buy. Only a sliver of the population – better-paid and relatively new residents moving into downtown-area condos, apartments and rehabbed Victorian-style homes – has been able to capitalize on modest purchase prices. Most of the rest have been thwarted by stagnant incomes.

Nearly 40 percent of residents are impoverished, compared with about 15 percent of Americans overall. Detroit’s median household income was about $28,100 the year before the housing collapse. It’s since shrunk to $26,095 – not even half the median for the nation, according to the Census.

A 60-year population dive in which Detroit lost 1.1 million residents appears to be slowing. But the exodus has left portions of the city abandoned and desolate, even with nearly 700,000 residents remaining.