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People are paying $14k for abandoned houses in Detroit

And they still need to fix them up. It’s all part of a plan to clean up the Motor City.

Abandoned houses in Detroit
Abandoned houses in Detroit
Image: Paul Sancya

Anthony Brown Anthony Brown Source: AP Photo/Corey Williams

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.”

How Detroit is tackling the problem

Detroit Bankruptcy White House Source: AP/Press Association Images

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 neighbourhoods.

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 neighbourhoods 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.

How many have been sold?

Reshaping Detroit Source: Paul Sancya

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.

“We’re going strong to weak. We’re starting in the strongest neighbourhoods 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.”

Bidding $14k for a house – and up to $135k

Reshaping Detroit Source: Paul Sancya

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.

How the program works

Downsizing Detroit Source: AP/Press Association Images

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 US 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.”

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Associated Press

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