Can Land Banks Help Solve Detroit’s Foreclosure Woes?
Over at WalletPop, they’ve looked closer into a big recent auction of foreclosed properties in Detroit, and it’s an even bleaker situation than first
Jul 31, 202037.6K Shares2.3M Views
Over at WalletPop,they’ve looked closer into a big recent auction of foreclosed properties in Detroit, and it’s an even bleaker situation than first reported.
The Wayne County auction of some 9,000 repossessed properties last week resulted in more than 80 percent of them failing to draw a single bid. And that’s even with the minimum bid starting at just $500.
The fact that Rust Belt cities such as Detroit and Cleveland are plagued with foreclosed properties isn’t a new development. But what happened at that Detroit auction gives a glimpse into how acute the problem is. WalletPop explains:
“„The auction didn’t go smoothly, however. Out-of-town speculators cherry-picked prime properties in areas such as the Boston-Edison district, while locals who showed up too late for registration weren’t permitted to take part.
That’s the scandal. One of the reasons distressed communities have begun fighting for tools such as land banks— public enterprises is to prevent speculators from playing games with foreclosed properties, while local officials watch helplessly. But as we’ve reported,getting a land bank together can be a lengthy and complicated process. Communities like Flint, Mich., are spearheading the shrinking citiesmovement, which tries to deal with the problem of foreclosed properties by cordoning off abandoned areas of the city and letting the land return to nature. It can be a great idea for some communities, but to achieve it, local officials first need that land bank or some other way to gain control of abandoned and foreclosed homes and land.
Otherwise, you can end up with a situation like the Detroit auction, where out-of-town speculators with money and experience can out-bid any local community groups or investors who might want to actually rebuild neighborhoods, rather than just play real estate games.
As Virginia Tech urban planning expert Joseph Schilling toldTWI last spring, ““We do a pretty good job in this country of recycling cans and plastic bottles. But we do an awful job of recycling and reusing vacant properties.”
Until our national housing policy turns more aggressively toward encouraging and allowing more local control of foreclosed properties — and to providing some financial support for that effort — expect to see more sad situations like that Detroit auction. We have some of the answers to this, in innovative policies like land banks. Why aren’t we moving with urgency to use them?
Camilo Wood
Reviewer
Camilo Wood has over two decades of experience as a writer and journalist, specializing in finance and economics. With a degree in Economics and a background in financial research and analysis, Camilo brings a wealth of knowledge and expertise to his writing.
Throughout his career, Camilo has contributed to numerous publications, covering a wide range of topics such as global economic trends, investment strategies, and market analysis. His articles are recognized for their insightful analysis and clear explanations, making complex financial concepts accessible to readers.
Camilo's experience includes working in roles related to financial reporting, analysis, and commentary, allowing him to provide readers with accurate and trustworthy information. His dedication to journalistic integrity and commitment to delivering high-quality content make him a trusted voice in the fields of finance and journalism.
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