In Detroit Neighborhoods, Housing is the Center of Every Conversation

Detroit   It’s a good thing that we wanted to talk about housing in Detroit, because no matter the organization or the individual, invariably in Detroit the conversation comes back to housing. Despite all the talk, solutions are illusive, but efforts and ideas are bountiful.

Although, maybe it depends on who you are. One person told us a true story. Neighbors were frustrated at their inability to acquire lots next door, despite maintaining them for years and being subjected to a constant runaround that it could be any day, except that it was a Groundhog Day, and went on for years. A friend called the Detroit Land Bank, which handles these kinds of things and said he was a developer from San Francisco and he wanted to get twenty houses to rehab and rent, and he wanted them for free. The land bank representative on the other end of the phone immediately told him, “we can work with you on that.”

The land bank controls almost 100,000 properties and, depending on who you talk to, maybe it’s 120,000 and maybe it’s only 80,000. It’s very likely that the land bank itself really doesn’t even know for sure. The land bank also doesn’t make it easy for families that might want to acquire the houses. You have to have a credit card that can handle a $1000 charge for example, which ices a lot of lower income families. You only have 90 days to get the house up to code or a little longer if the home is in a historic district. You have to prove that you have no record of property tax nonpayment or tax liens, or if you do, that you are current on the payment plan. It’s like that. The deck almost seems stacked towards developers and speculators. The only meeting that didn’t materialize for the Home Savers Campaign in this quick trip was a hard to get meeting with a representative of the Detroit Land Bank where a series of missed connections led to last minute meeting at the end of the day, but then he couldn’t be found when we arrived, so we had to abandon ship and hoped to connect later.

The tax auctions, which are a hot button issue for everyone, have also gotten more difficult and more slanted towards speculators. The minimum bid has risen to $3000. No previous owner can bid on their own foreclosed property. One nonprofit, a seasoned player in the process, told us that they were lucky to win at all in the most recent auctions, and had only garnered about a third of the homes that they usually were able to win for families.

Meanwhile our list of companies like Detroit Property Exchange, that seem to change corporations in the bidding the way most people change their shirts everyday, are able to escape these kinds of regulations with impunity. One colleague who is an excellent data cruncher had offered to give the Treasurer’s office a list of the front corporations for both DPX, as it’s known, and some other outfits, but found himself, like the Maytag repair man, stuck waiting for a call.

Rent-to-own and lease purchase mechanisms are common in Detroit even for nonprofits, since getting a mortgage from banks almost involves a ski mask and sidearm. Most agreements are short term, one to two years at most. One group, focusing only in one neighborhood, Regent’s Park, is trying to still figure out how to do such an agreement fairly.

It’s not easy we answered, but we were glad to be in Detroit and part of the excitement – and frustration – of trying to do something about housing.

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Detroit Paradox: People Who Need Houses and Houses that Need People

abandoned housing in Detroit

Detroit    Rarely is there a day in organizing when each meeting seems to be with one person after another who is smart as a whip, committed all in, and shoulder to the wheel, as we found in Detroit, but rarely is there also a day in which each story sometimes seemed a version of Sisyphus pushing the rocks up the hill and watching them roll down again.

Some of the rocks were avalanches I knew too well. Ted Phillips, director and litigator of the United Community Housing Coalition, stepped into a meeting that our ACORN Home Savers Campaign was having with Michele Oberholtzer, the shrewd, brilliant, and tough-as-nails director of the UCHC Foreclosure Project. Ted has years in the saddle and though we were deep in the weeds with Michele on potential strategy and tactics to allow lower income families to own – or keep – their homes, I couldn’t resist asking him what had happened to the old Detroit homesteading program that ACORN had fought and won over a decade of struggle. Ted knew exactly what I was talking about and quickly responded that it “had died because of governmental incompetence.” What we had won, only after Coleman Young left as Mayor after years of fights and squatting, was a compromise where a family would indeed get the house for $100 or so, but it required sign-off from several levels of government including the city, county, and possibly the state on adjudicated property, and essentially government writ large and small couldn’t effectively coordinate. Michele shook her head in disbelief, saying that could have been great. I thought to myself that perhaps we could have saved it if, big if, we would have had the resources to keep someone on staff who was bird dogging the bureaucrats 24/7. Michele had been telling us the complex lengths her program went in order to navigate the obstacles to allow people to keep their houses from auctions to governmental first refusals, so she knew what she was talking about.

In another meeting we got a short course in municipal and state financing that forced so many homeowners into auction because of the byzantine costs of living in Detroit. Property taxes, he told us, were the highest percentage to value in the country, but because of various austerity measures imposed by the state when Detroit when bankrupt, there is also no practicable way forward immediately to abate the levels without toppling the fragile city financing structure. We raised the questions of how it was possible to justify either spending Community Development money by the city or banks getting Community Reinvestment Act credits for developments in the downtown corridor while the neighborhoods starved, and heads nodded on the waivers that made it happen. Others talked to us about the unsustainable cost of even living in Detroit when property taxes were added to the cost of home insurance, water bills were soaring under new regulations, and in Motor City car insurance is easily $400 per month we were told. One person told us of being responsible for a city program design where the city lacked the money to actually implement any of the design she was producing.

On our pursuit of rent-to-own companies we found more names to add to our rogue’s gallery. We also heard of some promising handles that might save some owner-occupants in such agreements if we could get them into the landlord-tenant court where they could make the case that they had a land contract under Michigan law.

Rocks might be rolling down some of the hills, but the more we talked to people, the more we were on the team that was trying to mine those rocks to make a difference in Detroit.

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