Reviving a mortgage market through financial inclusion? Experimental housing governance and alternative home loan programmes in Detroit, Michigan

Since the 2008 financial crisis, the City of Detroit has faced significant housing challenges: the conventional mortgage market in the city has collapsed; numerous residents are precariously housed; and urban ‘blight’ and property abandonment are widespread. This paper offers an empirical focus on one experimental approach to governing these problems: the roll-out of new forms of housing-related loans to low- and moderate-income (LMI) Detroit residents. Under the rubric of financial inclusion, private and public actors have promoted these loan programmes as a way to both improve the housing outcomes of financially excluded residents and reboot the city’s mortgage market. The paper critically analyses these claims through a political economy lens, asking how, why and with what impacts housing-related financial inclusion programmes have been developed in post-crisis Detroit. The paper argues: (1) that these financial inclusion efforts are the products of an existing orientation toward market-based governance mechanisms and have grown out of a broader political project of property market revival; and (2) that in spite of their rhetorical commitments to improving the housing outcomes of LMI residents, many of the new loan programmes are ill-equipped to deliver on these promises in practice, prioritising market revitalisation over the needs of borrowers.