Read

User menu

Search form

Government Is Beat at Its Own Game at Detroit Foreclosure Auction

Government Is Beat at Its Own Game at Detroit Foreclosure Auction
Thu, 10/30/2014 - by Michele Oberholtzer

With a click of a button, over 6,000 Detroit properties were purchased Tuesday for just over $500 apiece. The bidding on this “blight bundle” marked the finale of an auction process whose outcome surprised local government which had scripted a much different ending.

The properties were up for auction because of a Michigan state law that mandates foreclosure for all properties owing three years or more of back taxes. In Wayne County, that amounted to 24,000 properties this year alone.

The auction happened in two phases: In Round 1, all properties are available for a starting price equal to the amount owed in back taxes. Unsold properties make it into Round 2, where the starting price is only $500.

In other words, Round 1 is where the county makes its money back – and Round 2 is where the county takes what it can get.

Local government can’t change these rules, but it can manipulate them to its own advantage. In Round 2 this year, over 6,000 unrelated properties were combined into what was termed a “blight bundle,” in a joint effort by the City of Detroit and the Wayne County Treasurer.

The stated intention was to “battle blight in our neighborhoods and continue the progress being made to strengthen our communities.” The off-the-record intention was to ensure the properties made it through the auction without being purchased by anyone else.

Even without this manipulation, properties not sold in the auction would go to Detroit's Land Bank – a public authority that manages abandoned and foreclosed properties until those properties can be reappropriated – and in this way the blight bundle serves to reroute properties that might not otherwise be headed into the Land Bank’s coffers.

But if preventing properties from being sold in auction is in the interest of both the City of Detroit and the Wayne County Treasurer, didn't they have more important work to do than clustering properties together? The land bank has made commendable strides in remediating blight, selling property and holding owners to account, but it should be the owner of last resort.

In the end, the blight bundle was the city’s way of following the law without actually following it; the bundled properties were effectively up for auction in name only. First, because they were very expensive – the starting bid was over $3 million - and second, because they come with stringent requirements, such as all blighted properties must be demolished or renovated within six months of purchase, a goal not even the Land Bank could meet. Yet despite these obstacles, someone called the Land Bank’s bluff and actually bid on them.

It bears mentioning that the term “blight” itself is a misnomer. Many of the properties in the bundle are actually occupied properties in good condition. Many residents of these properties were vying for the chance to buy back their homes, only to find that they had become part of a package deal with a starting price of not $500 but $3 million. That well-kept homes were swept away in the name of blight remediation adds insult to injury.

The Land Bank has a point in trying to go around the foreclosure law – because it’s a bad law. Foreclosure often creates more problems then it solves, especially in the case of occupied properties. Displacing residents in large numbers creates financial and social costs and often feeds the problem of blight that the city strives so tirelessly to fight.

But instead of trying to manipulate the loophole, local government needs to work to change the laws that hurt Detroiters, and Detroit along with it. Instead of attacking the problem from the back end by tearing down buildings, Detroit needs to address the problem at its root: keeping occupied homes occupied if reasonably possible. Even if it worked, the blight bundle would be a band-aid rather than a cure.

In losing what the Lank Bank likely considered a “sure thing,” the city gets a minor taste of the trauma that Michigan’s foreclosure mandate inflicts on residents and owners on the other end of the equation. It is estimated that 10,000 of the properties in this year’s auction were occupied, and tax foreclosure is growing every year.

Now that Detroiters no longer have to deal with the herculean task of managing those 6,000 properties, they might have some free time on their hands to attack this problem at its source.

 

 

Sign Up

Article Tabs

Goma water movement, Lucha, Congolese fighting, Congo war, grassroots movement, access to safe water

The Congolese group Lucha successfully mobilized thousands to march for the right to water in the city of Goma. Now, the group is challenging the regime of President Joseph Kabila.

A special episode dedicated to the most militarized land in the world—one that you may not even have ever heard of.

Restoring Internet Freedom Order, FCC rules, net neutrality, Internet freedom, fast line, Big Telecom, telecommunications industry, Ajit Pai

Access matters, and unequal access can have onerous consequences for those who can’t afford the fast lane.

Brexit, Brexit opposition, Theresa May, Jeremy Corbyn, no-deal Brexit

“This historic defeat will show that the government is deadlocked – and we now need to throw this back to the people and give them a final say," said Paul Butters of Best for Britain.

manosphere, incels, misogyny, black men, black women, racism, sexism, Black Manosphere

In response to the racism often targeted exclusively toward black men on majority white digital spaces, black males have created their own manosphere – where they rail against black women.

Goma water movement, Lucha, Congolese fighting, Congo war, grassroots movement, access to safe water

The Congolese group Lucha successfully mobilized thousands to march for the right to water in the city of Goma. Now, the group is challenging the regime of President Joseph Kabila.

#climatestrike, COP24, UN climate talks, carbon emissions, catastrophic climate change, climate movement, climate protests, climate demands

"Science has clearly told us that we need to act now to keep the planet within 1.5 degrees of warming," the young climate activist said in calling for a day of global action on Friday.

A special episode dedicated to the most militarized land in the world—one that you may not even have ever heard of.

Global investors managing $32tn are urging governments to phase out all coal burning. Photograph: Alexander Koerner/Getty Images

Global investors managing $32 trillion issued a stark warning to governments at the UN climate summit on Monday, demanding urgent cuts in carbon emissions and the phasing out of all coal burning.

Restoring Internet Freedom Order, FCC rules, net neutrality, Internet freedom, fast line, Big Telecom, telecommunications industry, Ajit Pai

Access matters, and unequal access can have onerous consequences for those who can’t afford the fast lane.

rising emissions, climate catastrophe, Global Carbon Project, climate impacts, carbon emissions, carbon cuts

According to a new Global Carbon Project report, emissions are heading in the opposite direction to the deep cuts that are urgently needed to prevent the worst impacts of climate change.

Posted 5 days 14 hours ago
rising inequality, income inequality, global wealth, costs of inequality

Americans pay a steep price for not spreading their wealth around as well as other developed countries.

Posted 5 days 15 hours ago
Brexit, Brexit opposition, Theresa May, Jeremy Corbyn, no-deal Brexit

“This historic defeat will show that the government is deadlocked – and we now need to throw this back to the people and give them a final say," said Paul Butters of Best for Britain.

Posted 4 days 5 hours ago

A special episode dedicated to the most militarized land in the world—one that you may not even have ever heard of.

Posted 2 days 13 hours ago
Restoring Internet Freedom Order, FCC rules, net neutrality, Internet freedom, fast line, Big Telecom, telecommunications industry, Ajit Pai

Access matters, and unequal access can have onerous consequences for those who can’t afford the fast lane.

Posted 3 days 16 hours ago
Brexit, Brexit opposition, Theresa May, Jeremy Corbyn, no-deal Brexit

“This historic defeat will show that the government is deadlocked – and we now need to throw this back to the people and give them a final say," said Paul Butters of Best for Britain.

Protesters on Sunday in Katowice, which is hosting the UN climate conference. Photograph: Sadak Souici/Le Pictorium/Barcroft Images

The move shocked delegates at a UN conference in Poland as ministers flew in for the final week of climate talks.

A special episode dedicated to the most militarized land in the world—one that you may not even have ever heard of.

rising emissions, climate catastrophe, Global Carbon Project, climate impacts, carbon emissions, carbon cuts

According to a new Global Carbon Project report, emissions are heading in the opposite direction to the deep cuts that are urgently needed to prevent the worst impacts of climate change.

rising inequality, income inequality, global wealth, costs of inequality

Americans pay a steep price for not spreading their wealth around as well as other developed countries.