Wayne County’s auction program to decrease blight, increase investment
In a heightened effort to relieve neighborhood blight and decrease the availability of homes to detached real estate speculators who very often purchase properties, displace residents, fail to maintain homes, and contribute to disinvestment in Detroit neighborhoods, the Wayne County Land Bank Authority has implemented the Action Before Auction program. Under this groundbreaking new program, the Land Bank will partner with eligible residents living in foreclosed properties to assist them with continuing to occupy the property either as a rent or a homeowner.
“I’m very focused on this program,” says Bali Kumar, Wayne County Land Bank, executive director. Kumar, 33 took the position in October of 2017.
“Last year the County and the Wayne County Land Bank came together and launched a pilot program to remove properties from auction by way of the Right of Refusal Process, where we can acquire foreclosed properties from the state and municipalities and remove them from the [conventional] auction process,” explains Kumar.
The County’s housing auction process has been criticized historically for contributing to a counter-productive culure of speculation, allowing buyers from around the country and the world to accumulate properties in Detroit, force residents out and leave the properties abandoned and neglected for years, usually with the intention of selling at a profit at a later date.
“Too often what has happened is that a renter is living in the property, paying their rent on time, but the landlord doesn’t pay the property taxes and the property goes in to foreclosure. But letting that property go to auction can result in people who did nothing wrong getting kicked out of their homes … just because the landlord has a different business model,” said Kumar.
The new pro-Detroit pro-neighborhood Action for Auction Program will end the speculation process which for decades has been a primary contributing factor in neighborhood decline and distressed communities.
The Wayne County Land Bank, as part of its mission to promote community redevelopment in Wayne County, has begun accepting applications for the 2018 Action Before Auction program. Currently the County Land Bank owns approximately 1,300 properties.
The Action Before Auction program will build on the Land Bank’s success of 2017, when it ran a pilot program that removed 141 properties from the foreclosure auction. All 141 properties are currently in the process of being rehabilitated and returned to productive use. Notably, out of the 64 properties that were identified as occupied, in the majority of those houses — 54 total, or 84 percent — occupants were given an opportunity to remain in the home or were given re-housing assistance as a result of the pilot program.
“We’re pleased with the success of last year’s pilot, but we are not going to rest there.” Kumar said. “By improving and expanding on the pilot program, we can increase the number of properties we can affect and the number of Wayne County residents we can serve.”
The Action Before Auction program will operate on two separate tracks. Under the first track, participants will work closely with the residents of foreclosed residential properties, with the goal of turning those residents into successful homeowners.
“We want to cast a wider net this year. The more participants, the greater the impact we can have.” Kumar said. wanted scenario. Rather than selling at auction to the highest bidder, a property placed in the program will be assigned to a participant that has the resources, capacity, and experience to work with residents and rehabilitate the property.
Under the second track, participants will focus primarily on remediating foreclosed properties, investing in the properties, and then returning those properties to productive use.
Both tracks work together to accomplish three goals: to avoid speculation, to keep residents in their homes, and to promote investment across Wayne County. Since the programs primary objective is remediation of blight, Kumar says that bidders who will not be selling or renting a property to residents, under the Acton for Auction program they are required to make a minimum $25,000 investment for improvements to the property.
“The foreclosure process creates community upheaval,” Kumar. “Every foreclosed home perpetuates a cycle of divestment, transiency and blight that spreads from one property to other homes on a block, and from one block across entire neighborhoods. We want to take action to stop this cycle of blight
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