Help us meet our fundraising goal. Thanks to NewsMatch, your donation will be doubled.

$40,000 goal
The Equity Factor

Detroit Launches Website to Auction Homes to Residents, Not Developers

Credit: AP Photo/Paul Sancya

There is no lack of housing stock in Detroit. Want to rehab an old house? There are plenty to choose from, assuming you’re willing to take on the risk of a rickety mansion that probably needs more work than you ever imagined. Yet the fact remains that preservation in this town is as important as demolition. And, starting in May, the Detroit Land Bank Authority will auction off city-owned homes.

Here’s the catch: You have to move in.

Every October, the Wayne County Tax Auction hawks foreclosed structures in various forms of disrepair and in all corners of the city. But this process leads to everyone from absentee landlords to real estate speculators snatching up properties. There’s a suspect landlord for every resilient Detroiter who wants to rehab a house and lay down roots. (Last fall a single buyer bought 21 of the 22 available properties in the North Corktown neighborhood.)

But, which the city announced on Monday, aims to auction off houses with the goal of ensuring they serve as building blocks of a given neighborhood. Within 30 days of closing on the property, you have to show documentation of a contract to rehab the home. Within six months of closing — bidding starts at $1,000 — you have to provide the Land Bank with a certificate of occupancy and show that the house has a real, live occupant.

If you miss any of these deadlines? “You forfeit both your purchase price and the property,” according to rules posted on the website.

“We are moving aggressively to take these abandoned homes and get families living in them again,” Mayor Mike Duggan said in a statement. “There are a lot of people who would love to move into many of our neighborhoods. Knowing that other people are going to be buying and fixing up the other vacant homes at the same time will make it a lot easier for them to make that commitment.”

You must be a Michigan resident or business to bid on the properties, so well-heeled foreign developers can’t step in and take all the desirable houses in sight. Auctioning starts on May 5 and one house will be auctioned daily. Right now, 15 homes are available for bid on the site, the majority of which are in the city’s East English Village neighborhood.

I was in Detroit reporting some other stories during the apex of last year’s tax auction, and there was a bit of concern among the folks I talked to that they might get outbid by some faceless out-of-state or overseas developer with no intentions of moving in. The idea behind the new site is to lure prospective homeowners who want to be active in the community, not just grab houses sight unseen and sit on them.

Which is another way that this new initiative separates itself from the annual Wayne County Tax Auction: On April 27, the East English Village Association will host open houses for prospective bidders. The only way you can see a house in the fall tax auction is if you break in. Otherwise, the first time you see inside your newly purchased property is after you get the deed from the city.

If you have dreams of ditching your life on the coast and buying an old Motor City mansion and fixing it up, you’ll have to wait until next fall’s tax auction. This one is for Detroiters only.

The Equity Factor is made possible with the support of the Surdna Foundation.

Bill Bradley is a writer and reporter living in Brooklyn. His work has appeared in Deadspin, GQ, and Vanity Fair, among others.

Follow Bill

Tags: affordable housingeconomic developmentdetroitequity factorhistoric preservationland banks