Flint’s troubles mount as home prices fall 21 percent
President Barack Obama went to Flint, Michigan, on Wednesday where he met with local and state officials and residents, and got a personal look at the lead contamination crisis there.
The president assured residents that it is now safe for anyone over the age of 6 to drink and use the tap water — as long as it’s filtered to eliminate lead. Filters (along with bottled water) have been distributed to residents, as planning proceeds to replace water pipes across the city. The White House is also promising to help Flint deal with rebuilding the water system and to help local agencies respond to lead-related health issues faced by residents, although details of that assistance are not yet clear.
Meanwhile, home prices in Flint have fallen 21 percent over the past year, according to real estate analysis firm RealtyTrac (the decline is based on median home prices in January-February of 2015 compared to January-February of 2016).
The price plunge “really stands out,” said RealtyTrac Senior Vice President Daren Blomquist.
“It’s counter to the trend we’d been seeing in the city of Flint over the past three years, where home prices had been rising. The market had been recovering.”
In fact, after decades of economic decline resulting from the downsizing of auto production and related industries, Flint had been experiencing a bit of an economic recovery, said David Uhlmann, director of the environmental law program at the University of Michigan.
“Flint was making significant efforts to redevelop — new restaurants, commercial activity in its downtown area — though there was still very high unemployment, and still a long way to go,” said Uhlmann.
RealtyTrac has analyzed other real estate markets across the U.S. that are in close proximity to manmade environmental hazards — markets near Superfund sites and large industrial polluters, or in areas with high levels of ambient air and water pollution. According to Blomquist, over a 10 year period, median home prices in those areas fell more and recovered less than in areas with low environmental risk.
“In high-risk areas, home prices on average are actually still below what they were before the housing crisis,” said Blomquist.
In Flint, environmental officials predict it will take years to fix the problem of damaged lead-leaching water pipes — in the municipal supply system and in private buildings. So it’s likely to take years for depressed home prices to recover as well. Lenders may be reluctant to issue mortgages in an area with such high perceived risk.
Lower property values will likely result in the city of Flint receiving less revenue from property taxes at some point. But James Hohman, assistant director for fiscal policy at the free market-oriented Mackinac Center for Public Policy, doesn’t think that will result in a significant decline in funding for Flint’s public school system.
“The state adds on top of your local base to ensure a mandatory per-pupil amount to your school district,” Hohman said. “So any drop is going to be replaced by extra money from the state, largely from its sales tax.”
What is less clear is where extra education funding might come from to help local schools deal with the learning and behavior difficulties that lead-exposed children in Flint could suffer over the next 10 to 20 years.
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