Blight Bungle

5710 senecaWith 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. Continue reading “Blight Bungle”