New Orleans No Longer Most Blighted U.S. City: Detroit and Flint, Mich., Come Out on Top

Ever since Hurricane Katrina ravaged most of its homes seven years ago, New Orleans has been considered the most blighted city in America -- until now.

Detroit and Flint, Mich., also long known as troubled towns filled with abandoned properties, have overtaken the Big Easy as the most blighted in the U.S., according to the Greater New Orleans Community Data Center. Meanwhile, government aid and a surge in citizens reclaiming their homes have brought down New Orleans' supply of dilapidated or demolished homes.

Detroit and Flint have had higher levels of blight than New Orleans since March 2011, the GNOCDC study showed. And as of March 2012, 24 percent of Detroit homes and 27 percent of Flint homes were considered blighted, compared to a rate of 21 percent in New Orleans. (The study used data on "inactive" postal addresses to determine those numbers.) Rounding out the top six in the study's list of blighted cities were Youngstown, Ohio -- which tied with New Orleans -- Cleveland (with a 19 percent rating) and Baltimore (with 14 percent).

The housing bust was a major factor in boosting blight in Detroit and Flint. Data from online foreclosure marketplace RealtyTrac showed that both cities tracked above the national foreclosure rate over the last six years.

The study underscores the positive impact of anti-blight policies. Bolstered by billions in government relief, New Orleans "made blight a major focus," ramping up code enforcement and increasing its auctions of vacant homes, said Allison Plyer, chief demographer at the Greater New Orleans Community Data Center. The city also benefited from the "Road Home" program, which paid 42,000 homeowners to restore and reoccupy their damaged homes.

These efforts' impacts are clear: In March 2008, 34 percent of New Orleans' housing supply was either vacant or uninhabitable, way above its current rate of 21 percent and nearly double that of the next most-blighted city at the time, the GNOCDC study said.

Also, the Louisiana city hasn't been as hard hit by the real estate slump.

In 2011, only 1.39 percent of New Orleans homes were foreclosures, RealtyTrac said. By contrast, 2.94 percent of homes in the Detroit area and 2.74 percent in Flint, Mich., were foreclosures. The national rate was 1.45 percent in 2011, according to RealtyTrac.

So what's weighing down Detroit and Flint? Partly it's because the cities have not had the resources that New Orleans has to combat blight. A dramatic population decrease plaguing the two cities ever since the auto industry relocated has tied their hands, said Amy Hovey of the Center for Community Progress, an organization that promotes the reuse of vacant properties.

In some neighborhoods, "it's so vacant that it's kind of like a ghost town," said Hovey, who is based in Flint. "There's no people in those neighborhoods. It's kind of eerie."

Hovey said that to reverse the residential decay, local governments or land banks -- entities that are often used to buy up distressed properties -- must seize the homes and either demolish or rehab them.

Baltimore, another city plagued with blight, announced in the spring that it intends to use its allotment of the $25 billion "robo-signing" settlement to demolish about 700 homes. The GNOCDC study found that 14 percent of Baltimore homes were blighted as of March 2012.

Plyer said that selling abandoned properties in bulk, another approach to combating blight, is less helpful. Investors are not always civic-minded, she said, and often are quick to discard their acquisitions. She disapproved of a recent deal in which the Treasury of Macomb County in Michigan sold 627 homes at a foreclosure auction to a yacht dealer named Bill McMachen.

"Studies show that properties that sell through an auction like that -- they come back through the process, like, two years later," she said.

%Gallery-160742%
More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
Find homes for rent in your area.

Follow us on Twitter at @AOLRealEstate, or connect with AOL Real Estate on Facebookand Pinterest.