In the last few years, it wasn’t terribly uncommon to hear of individuals and couples fleeing the gentrification of New York and San Francisco and rising prices with a nod towards Detroit and houses that could be moved into, if not lived in, for the money that most walk around with in their wallets… as long as they aren’t walking around in Detroit.
Detroit is a dystopian landscape of staggering crime, roving bands of abandoned fight-trained dogs running the streets unchecked, and staggeringly cold winters. While once a model of the U.S. economy with GM and Motown coming together, it was still the home of the worst riots ever seen within U.S. borders. A place that would make denizens of the Hunger Games’ of Panem and its 13 districts and capital city blush, at the risk of hyperbole.
While today saw a breakthrough in negotiations with the group that represents over 80% of the city’s retired firefighters and police officers with regard to their pensions and cost-of-living increases, the city remains as broken as a GM ignition switch.
Tax foreclosures have shuttered entire neighborhoods where banks are looking to unload properties as soon as possible to alleviate costs of maintenance and property taxes while keeping the same banks’ credit ratings mired in oblivion.
Act fast or miss out
As a result, the city launched a website on Monday with 15 home listings that will start getting auctioned off on May 5. The website, BuildingDetroit.org, will auction one property each day with the opening bid of just $1,000. While perhaps “too good to be true” it’s important to remember that these homes are not just in Detroit but come with a massive caveat…winning bidders must quickly rehabilitate the home and have someone living in it within six months or else they will lose the house and their money.
“We are moving aggressively to take these abandoned homes and get families living in them again,” said Detroit’s Mayor Mike Dugganon Monday. “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.”
The city presently owns over 16,000 vacant homes as a result of tax lien foreclosures. It will hardly sort out the city’s $18 billion in long-term debt but you have to start somewhere.
“People have walked away from great homes in their neighborhood because they thought their block had no future. Well, they left too soon,” city council president Brenda Jones said in a statement.
For now, you must be a Michigan resident in order to take part in the bidding so stop licking your real estate speculating lips.
In addition to the aforementioned caveat, winning bidders will need to find a 10% down payment within three days of winning while closing and paying in full within 60 days if they land a home under $20,000. Those that pay over $20,000 will be given 90 days to close.
“We are not looking for speculators” said Land Bank chairwoman Erica Ward Gerson. “If you’re not going to act diligently to fix up the house, you’ll lose the house and your money.”
An open house will be held on April 27 so bidders can look inside all 15 homes currently on the website, according to city councilman Andre Spivey.
“We’re going to fix up entire neighborhoods at once,” said Detroit’s mayor. “It’s important that everyone who buys one of these houses is serious about getting them rehabbed and occupied.”
Best of luck, Detroit.