No Property Left Behind: Want to buy 4,500...

No Property Left Behind: Want to buy 4,500 properties in Detroit? And then what?

Jerry Paffendorf
on Mar 28, 2012

Every year Wayne County holds a massive tax foreclosure auction (the largest in the world). Last year 13,000+ Detroit properties were auctioned off starting at $500 a piece. 4,500+ went unsold. $2,225,000-ish would have bought all the left over properties. Want to start a fundraiser to buy what's left after the 2012 auction and start a land bank that actually works? And how *would* it work?

Participants (6)

What do you think?

Anonymous
on 2014-10-21T18:20:30+00:00
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Jerry Paffendorf
on Mar 30, 2012
"matt, check out the microhoods map sketch i just posted on delphia's comment above. it might be a..."
Jerry Paffendorf
on Mar 30, 2012
"delphia, i definitely feel that, and the "adventure" (<-- sometimes i use a hobbit metaphor..."
Jerry Paffendorf
on Mar 30, 2012
"david, with the foreclosure auction they wave all back taxes except those generated during the..."
Jerry Paffendorf
on Mar 30, 2012
"while you do take on responsibility for the year-of-purchase's taxes, you don't have to pay it..."
David Hayman
on Mar 29, 2012
"An excellent idea.  I was and still am very interested in purchasing property in Detroit.  The..."
Greg Holman
on Mar 29, 2012
"I think you have to pay the first year's taxes up front so $500 is just the tip of the actual..."
Matt Dibble
on Mar 29, 2012
"Also, just kind of thinking through this... I don't think you refund money. I think it's $500 to..."
Matt Dibble
on Mar 29, 2012
"Count me in on this, I love the idea. I'm imagining on a map, Detroit being connected by little..."
Tunde Wey
on Mar 29, 2012
"I like the breakdown delphia... really interesting"
Delphia Simmons
on Mar 29, 2012
"Hey Jerry, After purchasing two properties in the last auction and having them broken into and..."

Jerry Paffendorf

Jerry Paffendorf - 2014-10-21T18:20:31+00:00 - "Every year Wayne County holds a massive tax foreclosure auction (the largest in the world). Last..."

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Jerry Paffendorf
on Mar 28, 2012 - 9:10 pm

Quoting from a blog post called GRABBING THE DRAGON’S TAIL: AN EXAMPLE OF AMBITION & TERROR (NO PROPERTY LEFT BEHIND):...Every year Wayne County has a huge tax foreclosure auction. As far as I can tell, it is the biggest property auction in the world (please correct me if I’m wrong). This past year just over 13,000 of those properties were in Detroit, each being auctioned for an opening bid of only $500. LOVELAND mapped and tracked the whole thing live at WhyDontWeOwnThis.com and tallied 1,132 unique bidders buying 5,815 properties for a total of $20,580,806. 

[Note: you can see a pre-auction Detroit News video on the project as well as The Land Blank experiment with Andy.]

That’s a lot of action, but it also means that 4,510 properties were left on the table. At $500 a piece, if you wanted to buy all those properties you would have needed $2,255,000. That’s a number that I would call both big and small, right? 

So imagine this scenario. What if we set up a crowd fundraiser for the 2012 Wayne County Tax Foreclosure auction trying to raise $2,255,000, using last years leftover numbers as the base. The way it would work is as follows:

• People pledge funds with their credit cards but no one is charged anything until the auction

• The auction happens online, so we write a script that tracks all auction clocks and bids on properties at the last possible momentonly if they have received no other bids

• At that point we extract the appropriate amount of funds from all funders equally. So say for the sake of easy numbers that there are 500 who’ve pledged money into the pool, when one $500 property is bought $1 is taken from each of them to cover the cost

• This repeats until each funder has hit their pledged limit and the pool runs out. If there isn’t an opportunity to spend the entire pool then people are never charged the remaining amount

Now let’s say this year’s auction plays out similarly to last year’s. Let’s say 4,000 properties receive no other bids, and the group ends up buying 4,000 properties. Is this a good thing or a bad thing? Well, there’s where the terror starts to kick in. Now that you’ve grabbed the dragon’s tail, what do you do?... 

 

Responses(10)

Delphia Simmons
on Mar 29, 2012

Hey Jerry,

After purchasing two properties in the last auction and having them broken into and further trashed and stripped I have grabbed, well, maybe not the dragon's tail but at least very large lizard's tail.  But in spite of the bad experience I don't regret the....um...adventure.

No doubt purchasing that many properties would by sheer numbers transform neighborhoods.  So, lets say that 4,500 properties came under the control of 500 purchasers.

1. Divide those 500 into teams of 100 

2. Divide the properties by area--roughly 45-50 per area

3. Develop or utilize existing methods to engage the existing residents in "placemaking"

http://www.pps.org/placemaking/articles/placemaking-tools/

Odds are that the skills and resources needed for rehabbing would be found with the 500 and within their individual networks.

Some new public spaces created in each area would be standard and duplicable (art park, gardens, etc.).  

Imagine the innovators who spoke at the UIX launch event duplicating their projects in each of the 45-50 areas!  

I'm wondering how the "resizing" plans for the city would come into play here.

I know this sounds simplistic and the devil is in the details but... :-)

 

 
Tunde Wey
on Mar 29, 2012

I like the breakdown delphia... really interesting

 
Jerry Paffendorf
on Mar 30, 2012

delphia, i definitely feel that, and the "adventure" (<-- sometimes i use a hobbit metaphor for property fixer-uppers, when someone says "look at this sweet house i got for cheap!" i hear "hey sam, look at this sweet magic ring i found!" well, looks like someone's gonna have to march into mordor. :-))

on place-making and teams focusing on areas, the new city map we're working on might be helpful and i'd love to hear your thoughts on this. we're going to test out a system where the city is overlayed with a grid of 560-some quarter-mile by quarter-mile blocks called "microhoods". the idea being that the city is just too big to think about as a whole and many neighborhoods are ill-defined and/or also too big, but if people start working in a specific microhood and connecting those microhoods, it might be easier to accomplish big things while not feeling like you're lost in a whole ocean. 

see the attached microhood sketch which is currently being interactified. even for the crowdfunding of left over properties, it might be helpful for people to break into microhoods. ("looks like there are 10 auction properties in the microhood i live in. $5,000 would buy them all so let's collect a pool and come up with a plan for just that.")

 
Microhoodsofdetroitsketch
Matt Dibble
on Mar 29, 2012

Count me in on this, I love the idea. I'm imagining on a map, Detroit being connected by little hubs of doing great. Delphia said it very well.

 
Matt Dibble
on Mar 29, 2012

Also, just kind of thinking through this... I don't think you refund money. I think it's $500 to get in. There's going to be plenty of need for that money after the houses are bought. Even with the amount of investors you'd get, you'd probably need to do rounds of fundraising based on specific projects going on in these places in different parts of the city.

For instance, if you have a house in Corktown that you believe would make a great place to help wannabe cooks or restauranteurs... you'd need to raise funds for the most kick-assingest kitchen you've ever seen. And you would strategically build a fundraising campaign around that specific idea. Even while, at the same time, there's a place in the Villages that is being fixed up and funded to be a daycare.

Different needs and methods of funding for different areas.

 
Jerry Paffendorf
on Mar 30, 2012

matt, check out the microhoods map sketch i just posted on delphia's comment above. it might be a way to make things like this more manageable by helping people focus on more discreet areas.

 
Greg Holman
on Mar 29, 2012

I think you have to pay the first year's taxes up front so $500 is just the tip of the actual cost if the property is a house.  Maybe start with vacant lots, taxes there should be reasonable.  

 
Jerry Paffendorf
on Mar 30, 2012

while you do take on responsibility for the year-of-purchase's taxes, you don't have to pay it right away, so it's not an immediate concern in acquiring the property. the way it would work is the group would heavily and openly advertise the availability of the properties they purchase and in the worst case, if no one wants something, you let it foreclose again in 3 years and it returns to the county. it would seem that this would cause no harm because no one else would be collecting taxes from or using it anyway. and hopefully within that time period an alternative solution emerges, but if not, no harm no foul.

you're right, though, that it's totally possible to be targeted in selecting more manageable properties. the moon shot scenario i proposed would undoubtedly include buying some incredibly large, incredibly unweildy, incredibly decrepid, incredibly tax expensive properties. in theory, though, this could be the best chance to actually find someone to address these properties.

 
David Hayman
on Mar 29, 2012

An excellent idea.  I was and still am very interested in purchasing property in Detroit.  The real bugaboo however seems to be the liabilities (back taxes, etc.) many of these properties would have attached to them.  I would love if in whydontweownthis 2.0 there was some sort of checklist that would show if the property were free and clear or what liabilies would be due on the property (I imagine this would be a nightmare to sort out...but in all honesty, is very neccessary when acquiring any property anywhere)  The process of due dilligence on the part of the buyer ideally would be streamlined...short of that the time needed for one to do it on their own if equated in dollar terms could add significantly to a potential $500 sales price...and would you be SURE you checked under every stone (oops I didn't know I'd have a $1500 water bill due!).

 
Jerry Paffendorf
on Mar 30, 2012

david, with the foreclosure auction they wave all back taxes except those generated during the first part of the year of purchase. you're totally right though that it's possible there are hidden troll costs, though i haven't heard of anyone getting stuck with anything crazy yet -- just the craziness of suddenly having to maintain a property. :-) 

since there really is no perfect data out there about what past costs rightfully or wrongfully might try and attach themselves to buyers, maybe the easiest way to improve dealing with this issue in a whydontweownthis 2.0 is to make it easier to check public lookups for things like water bills, but also make it easy to connect directly with professionals who know how to look under every stone on a case by case basis. 

 
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