Detroit fights blight by selling off vacant homes

Mayor's aggressive home preservation plan luring people back into city neighborhoods
Associated Press
Jun 16, 2014

 

Anthony Brown keeps his home of 36 years in good shape, but it is an island of tranquility in a sea of blight in Detroit's Marygrove neighborhood. There is a vacant house next door, another across the street and still others farther down Wisconsin Street.

"It was beautiful around here," Brown, a 59-year-old Ford Motor Co. worker, said about how things once looked. "Everybody was in the houses. Everybody kept their lawns up. Everybody was planting flowers."

Now he and others in bankrupt Detroit see signs of hope in an aggressive home preservation plan that Mayor Mike Duggan is using to lure people back into city neighborhoods. It's no small task: A recent study recommended razing more than 38,000 houses. Another 35,000 are unoccupied, abandoned or government-owned and at-risk of becoming blighted. About 5,500 of those are owned by the city or the Detroit Land Bank Authority.

Instead of razing them all, the city is highlighting the ones that can be saved and selling them at auction to individuals and families who want to fix them and move in. That strategy, if successful, is expected to help eradicate blight and strengthen neighborhoods that are stable or on-the-edge.

The Land Bank began auctioning off one home per day in early May. That has since been expanded to two per day and soon will grow to three.

About 50 have been sold, so far, and 6,500 bidders have registered on the online auction site.

"We've sold $700,000 worth of houses," Duggan told The Associated Press last week. "We're going strong to weak. We're starting in the strongest neighborhoods in this city and going after every single abandoned house.

"If you've got four abandoned houses on a block and you demo one house, you haven't changed the quality of life for people on that block. If you try to sell one house where there are three abandoned, nobody's going to buy. When you take the entire neighborhood at once and attack every single abandoned house, that's when people are willing to invest."

The highest winning auction bid has been $135,000 for a 4-bedroom, 3-bath historic home in the Boston-Edison area near the city's center. Activity was so furious that the website crashed near the end of the auction.

About nine homes have been auctioned off in Latisha Johnson's East English Village neighborhood. She says they sold for an average of $30,000.

"We recognize how much work needs to go into it," Johnson said of rehabbing each of the homes. "I'd venture to say they would have to put $30,000 in work to put in to it."

On Friday, the high-bid for a 1,200-square-foot brick bungalow in the eastside neighborhood was $14,100. The house has a fireplace, three bedrooms and a good roof, but the auction website notes that it's a fixer-upper: Both bathrooms and the kitchen will need replacing, as will the doors, windows, plumbing and HVAC system.

Talmer Bank has committed $1 million to a program in which homeowners get $25,000 forgivable loans when they buy homes at auction. The loans will be forgiven at the rate of $5,000 for each year the buyer lives in the house.

Duggan's plan includes legally taking empty houses from owners who fail or refuse to keep them up. Some will be torn down and others will be sold. Detroit doesn't want to be a landlord, but the mayor said allowing houses and neighborhoods to rot is no longer an option.

"We sue on a nuisance theory that when you abandon your house it is a nuisance to your neighbors, and you have to either fix up the nuisance yourself or lose the house," Duggan said.

Detroit has filed lawsuits against at least 125 people so far this spring.

The program is modeled after one he created a decade ago during his time as Wayne County prosecutor. And as far as Duggan knows, no other U.S. city is doing what Detroit is doing.

Notices are posted on the vacant houses, and there is a response and appeals period. Some owners choose consent judgments and vow to fix the houses up and move somebody in, but some don't.

On June 6, a judge awarded the Land Bank eight vacant properties in the Marygrove neighborhood.

"I'm going to guess that of those eight, we're going to demolish two and auction six," Duggan said. "We're rolling across the city an entire neighborhood at a time and filing these lawsuits. Everybody knows they got a choice — sign the court order and get it fixed up yourself or we'll auction it on the website. If we take title to it and we can't sell it, we'll demo it. If we got a couple of burned out houses we'll take title (and) demo the burned out houses."

That's not just political rambling, said Brown, who has seen Duggan looking over vacant houses on Wisconsin Street.

Like Duggan, Brown would rather they be saved.

"Who wants a vacant lot by their house?" Brown said. "Recycle. That's what Duggan is doing. He has a nice plan. He's doing better than all these other sorry mayors we've had."

 

Comments

Contango

A free market approach to fixing Detroit that the socialists will never attempt because it just 'might' work:

"How to Fix Detroit in 6 Easy Steps"

http://www.freemansperspective.c...

OMG.LOL.WT_

A true looney tunes solution. Ayn Rand?

Contango

Re: "A true looney tunes solution,"

Being a Russian expat Ms. Rand knew a thing or two about the 'success' of central planning.

Why Ms. Rand, why not Adam Smith?

grumpy

"Why Ms. Rand, why not Adam Smith?"

Because the blogs haven't been talking about Adam Smith for over a decade. Ayn Rand has been on the hit list and talking points the last couple of years.

ohioengineer

Big government, out of control labor unions and social engineering got Detroit into the mess it is in today. Can it be saved by old-fashioned free enterprise? I don't know, but it is encouraging to see them at least trying this method versus yet another expensive government "stimulus" program.

The United States needs to learn a lesson from Detroit. This is a city that was built into one of the world's great cities by capitalism. Then its citizens decided that capitalism was out of date and adopted the "modern" policies of socialism. In a few decades these so-called progressive ideas drove this mighty city to its knees. Now it appears that if it can be saved, it will be capitalism that once again does it. Wake up, America - Detroit might have gotten there first, but this is the same cycle that our nation is following.

downthemiddle

Exactly!

The Bizness

How can you say that capitalism didn't have a major role in the downfall of Detroit? Many could argue that capitalism caused both the rise and fall of Detroit.

Contango

Re: "Many could argue that capitalism caused both the rise and fall of Detroit."

The floor is yours.

More like politics, ala Mayor Coleman Young.

The Bizness

What about capitalism demanding cheaper labor, moving jobs overseas?

Contango

Re: "capitalism demanding cheaper labor,"

So you always pay as much as possible for a product or service and never seek out discounts?

Actually, GM China was about the only profitable segment of the co.

GM China serviced the Chinese domestic mkt. and did not export vehicles to the U.S.

The Bizness

I understand that organized labor has played a role, but I also think its ridiculous to not admit that capitalism itself didn't play a role.

Organized labor got greedy, but so do corporations trying to pad their bottom line. No system is perfect.

downthemiddle

Higher labor costs driven by unions....

Most of the jobs that went were with huge corporations... Fortune 500's. Most privately owned businesses don't play at that level... I say this in anticipation of a comment about greedy business owners. A relative of mine owns a business in Ohio that sells to a Fortune 10 company. His company is unionized and competes directly against Asia. He says it's not wonderful but it beats working for someone else. He does not make 4% on his money. How long would you do that?

The Bizness

So you want us to go back to gilded age type working conditions?

grumpy

So you think that is a possibility? Really? or are you just asking retorical questions trying to change direction of the discussion?

The Bizness

No, but corporations will pay the bare minimum just to get the most profit as is being shown by our current situation. Profits continue to rise but wages do not.

Unions played an important role in giving us safe workplaces with decent wages. Many went too far though.

downthemiddle

And you, biz want the most money possible from your employer.

Think it through... it's circular until someone breaks the circle. My relative has to be tough with the union or he'd end up like GM.

The Bizness

I think that an employer should pay their employers appropriately, if they are making record profits, they should raise their employees pay accordingly.

Capitalism is not the best solution, nor is socialism, a combo of both would be best.

downthemiddle

Nothing wrong with bonusing people .. when you can... but raising base pay rates because of an abnormally good year is suicide.

Try raising your lawn guy's pay and then retracting it a month later.

The Big Dog's back

So, invoke pay cuts when you have a bad year but not pay raises when you have a good one. Oh, OK.

The Bizness

The thought process makes zero sense.

Unions and organizations should work together...

For example: Instead of agreeing to a set wage for the forseable future, why can't a union say ok if we are profiting our wage should raise by this much, but if we are not growing as expected our wages should not grow or even contract by this much?

I am by no means a champion of unions, but they are extremely important for safety and wages.

grumpy

" they are extremely important for safety "

That was true... before OHSA and more work place laws were written. Times change. In the past 30 years or so I have seen unions deal with safety on the job twice. Times change. Unions need to change with the times, few have. If more unionsevolved over the years aqnd would deal with retirement, health insurance, collective bargining, and stay the hell away from donating dues to politicians (they can bundle separate checks from members, but NOT use dues) deal with training, do apprenticeships, more folks would like what they do. That is what the union I worked through did. The members liked and still like it. They paid their dues and got what they wanted from the union. That union evolved to what the membership wanted from them. They mostly stayed the he77 out of politics.

The Bizness

I agree

downthemiddle

dog... you got it backwards...

Try again.

The Big Dog's back

Quite awhile since he's drawing a paycheck too. And don't say he isn't.
This is for dtm's relative.

downthemiddle

He draws a paycheck.. about what a uaw millwright at KBI makes with overtime.

Say, aren't you supposed to be mopping the floor at 913 for brownie points?

downthemiddle

biz.. have you been to Detroit in the last 10 years?

Not the suburbs... REAL Detroit within 2 miles of the Ren Cen.

The Bizness

Yes, and your point?

downthemiddle

Were you looking out the car window or were you curled up on the floor in fear?

The Bizness

What is your point?

downthemiddle

I dunno.... but try this. The world doesn't need any more Detroits, but Sandusky is turning into one.

deertracker

LEAVE THEN!

OMG.LOL.WT_

I would hardly call it a "FREE MARKET" approach when the city takes the property because it is a nuisance and offers "forgivable loans". Seems more like social engineering to me.

Contango

In the U.S., the govt. owns all "private property."

Try not paying your property taxes.

OMG.LOL.WT_

Stop It

A little bit of capital to start up a good crew of demolition guys, be they blasters of major buildings or just residential home wreckers could make a killing up there and probably already are. I read plenty of articles where the city is letting neighbors to plant gardens and sell produce on blighted land next to them.

Starting over.

puddin95

Go Wings.

KURTje

Strange. Henry Ford had his Model A built in Russia during the depression. Think it was called the GAF. He espoused capital yet went there with product. Double standard? In Detroit there is plenty of blame - not just 1group caused their dilemma.

The Bizness

That was my point originally, thanks for stating it better.

Dr. Information

Detroit looks like Haiti. This is what happens with years of Democratic control and unions.