When Tony Palladeno Jr. started buying and refurbishing houses on the east side of Flint, Michigan, 25 years ago, they seemed like a good investment. The houses are on what he described as “primo land” near a community college and a park, and he figured there would always be a stream of student renters. He hoped the extra income would provide a cushion for his wife, who doesn’t have health insurance, in case of medical emergencies.
Instead, Palladeno’s houses have become a crushing financial burden. The trouble started in 2006, when Palladeno lost his job at the local newspaper, and fell behind on property taxes. Then the Great Recession walloped the city, hastening what had been a steady decline in manufacturing jobs. Property values plunged. They were finally starting to creep up again in some neighborhoods when lead poisoning in the city’s water—which began two years ago this week, when the city switched to the Flint river for its water source—became a national scandal. All of the property in Flint combined is now worth some $500 million less than it was before the recession, according to NBC.
That’s left many residents trapped in homes they can’t sell. Not many people are eager to move into a city with poisoned water, and even if there were buyers, lenders won’t finance mortgages unless sellers can prove they have potable water. Few residents have the money to simply walk away. Some are even facing higher property taxes this year, because of the slight uptick in value before the extent of lead contamination was widely understood.
Palladeno, who has lived in Flint his whole life, estimates he’s put well over $150,000 in his four rental properties and the house where he and his wife live. He reckons he’d be lucky to get $7,000 for any of them now. “We don’t have any hope to sell these houses for anything close to what we put into it,” Palladeno said in a telephone interview. At least two of the homes have elevated lead levels in the water. “We can’t even rent them, because if someone gets sick or dies we could be liable.”
To make their homes habitable, residents have to repair what the contaminated water destroyed: pipes, hot water heaters, dishwashers, and other appliances. The necessary repairs will cost at least $4,000 per house, on average—an impossible sum for many Flint residents, 42 percent of whom live below the poverty line. Even if every dollar of the pledged recovery money ($28 million from the state and $85 million from the federal government) were handed out to residents, it would leave them short.