With the city’s population reeling from a battered economy and a plunging housing market, the Jewish Federation of Metropolitan Detroit has begun offering housing assistance to Jewish families to help stave off the threat of foreclosure.
For the past month, the Jewish Housing Assistance Program has been providing loans, advice and negotiating assistance to community members who face the prospect of losing their homes. The program comes at a time when social service agencies report that Jews have been coming for assistance in ever greater numbers.
“I have men in business suits coming in here and crying,” said Mary Keane, executive director of Detroit’s Hebrew Free Loan Association, which is involved in running the Housing Assistance Program. “They used to be donors to this community; they have reputations. Physicians and medical offices are closing down a couple days a week and laying off 50% of their staff because people are not going to doctors unless they absolutely have to.”
Though the whole country has been hurt by a slowing economy and by the fallout from the collapse of subprime mortgages, no American metropolitan area has been hit harder than Detroit. The widely publicized woes of the automobile industry have rippled through the local economy, producing the highest unemployment rate in the country. The subprime crisis itself has hit Detroit particularly hard, causing one of the country’s highest foreclosure rates.
Detroit’s Jewish population has been shrinking for years, but it has remained prosperous and strongly affiliated. According to a 2005 study conducted by the Detroit federation and posted on the North American Jewish Data Bank, median family income among Detroit-area Jews was $85,000, the eighth highest in the country. Even this past year, despite the recession, the federation raised a total of $48 million, one of its largest campaigns to date.
The Jewish population, however, has been engulfed by one of the worst downturns in Detroit’s history. Detroit’s unemployment rate is 7.7%, and according to the National Association of Realtors, median housing prices in Detroit have dropped 7.3% over the past year, compared with a 2% drop nationally.
The result has been a double blow to local families, who face the risk of losing their jobs but cannot compensate by selling or refinancing their houses.
In response to the mounting crisis, an anonymous donor approached Robert Aronson, chief executive officer of the Jewish federation, last month and offered to put up the money to start a housing assistance program. Aronson quickly assembled federation board members and heads of Jewish social service agencies, and they began putting together a program on the fly. By the first day of Hanukkah, the Jewish Housing Assistance Program had been fitted with its own board and two full-time staffers, and it was accepting applicants.
Operating from the offices of Jewish Family Service of Metropolitan Detroit, the housing program is designed to address both emergencies and long-term housing problems. In the case of an emergency, the program will help pay for such basic costs as utilities, property taxes, and rent or mortgage payments. In the case of those who do not face such immediate crises, the program is designed to help restructure loans and make them more affordable over the long term.
Leaders of the Housing Assistance Program say they have been able to use the weak housing market as a negotiating tool with lenders.
“Frankly, lenders don’t want the houses back,” said Bob Pilcowitz, a veteran of the Detroit mortgage industry who chairs the board of the Housing Assistance Program. “The best house for the lenders is a house that’s occupied.”
The Housing Assistance Program uses its funds and the advice of real estate professionals such as Pilcowitz to renegotiate cheaper loans, often converting expensive subprime loans into more affordable, stable mortgages. The program also makes loans to homeowners.
In turn, the directors of the program expect the applicants to have a plan to get themselves back on their feet, whether by finding a new job or moving into a cheaper house.
To date, the organizers have not advertised the program beyond word-of-mouth, for fear that they will be swamped with applicants while they are still getting organized. So far, about 20 people have come in seeking help; half of them have been accepted into the program.