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The Detroit Land Bank Authority: Opportunities to Build and Expand

 

The Detroit Land Bank Authority (DLBA) is the largest current landowner in the City of Detroit and the largest land bank in the country. In 2014, the DLBA owned over 100,000 plots of land that had been deeded over by the City. Most of this land came to the city through tax-foreclosures. When property taxes are not paid for three consecutive years the house or property is foreclosed and forfeited to the city. The objective of the DLBA is “[t]o make vacant and residential public property available for sale in order to promote homeownership, neighborhood revitalization, urban agriculture and economic growth in the City of Detroit.” Community Enterprise Clinic Clients should take advantage of the DLBA’s objective and consider buying land from the DLBA.

            In October of 2023, the DLBA announced in their quarterly report that they are in possession of 71,107 total properties. Almost 90% of this inventory is vacant land. There are 8,232 structures in the inventory with some pending sale, unsold, occupied, and others ready for demolition. The DLBA has multiple initiatives to rehabilitate properties, reduce blight by demolishing unsafe structures, and work with new owners to abate nuisance issues. Due to the high number of properties under the DLBA’s control, they have created different mechanisms and ways of selling off properties and working towards restoration and revitalization. Not all of the available properties are listed for sale at all times. A certain number are available to auction or buy, depending on the type of lot. The DLBA auctions off properties with structures that are the strongest rehabilitation candidates. The public may also request for properties to be listed for sale, these properties are also auctioned off but called Own-It-Now properties. There is a debate about this slow-release strategy, and whether or not it would be better to list all properties. Some believe that certain neighborhoods are being targeted to the detriment of other neighborhoods. Whereas others think that releasing all properties would upset the market. 

Buying Structures from the Detroit Land Bank Authority

There are five ways to buy properties with structures or larger property blocks from the DLBA. Auction and Own It Now properties are structures that require rehabilitation before they can be fully owned by the property buyer. Rehabbed and Ready properties are listed at or close to market value. Marketed Properties are lots that do not fit within the auction structure, such as small bundles of homes, commercial properties, and land based projects. Land Based Project listings target community organizations that will activate vacant lots for agriculture, gardening, and other beautification efforts. And finally, there are Unlisted Properties owned by the DLBA that can be applied for online.

Auction and Own It Now properties start off at $1,000 and require repairs before full ownership can be obtained by the buyer. Along with the property price, buyers must pay closing costs including: closing/title fees, recording fee, tax certification fee, and tax insurance. At the minimum, these costs are around $800. Once a buyer wins at auction they must rehab and occupy the property within six months. After closing, new property owners will receive a list of resources, product discounts, and information about workshops at the Detroit Training Center to assist with the renovation process. The DLBA states on the website that they have no knowledge of the condition of the water line in the area and whether or not it is connected to the property. Every forty-five days property owners must upload photos of the property and their progress to their DLBA compliance representative. Auction and Own It Now properties are required to have an exterior in good condition, a year free of debris, installed and functional furnace and water heater, functional kitchen, functional bathroom, active utilities, an inspection from the Buildings, Safety Engineering and Environmental Department, and a compliance walkthrough by DLBA. 

Buying Vacant Land from the Detroit Land Bank Authority

The DLBA also sells off side, neighborhood, oversized, and accessory structure lots. The DLBA will soon be offering infill and homestead lots to promote new development. The different types of lots have various requirements depending on size and type of property. For example, side lots are small vacant lots adjacent to occupied homes and are sold for $100. Although there are no compliance requirements, side lots must be less than 7,500 square feet and can only be sold to the owner of an adjacent home. The DLBA has sold over 22,000. Whereas neighborhood lots can only be sold to homeowners with a primary residence within 500 feet of the lot. These lots cost $250 and sales have a three-year compliance period where the purchaser must not be found in violation of blight conditions before being deeded ownership.

These lots are an excellent way to expand already existing facilities, especially for urban farms. The DLBA encourages local block clubs and neighborhood associations to work together to endorse neighborhood lot projects. 

Community Partnerships

            The Detroit Land Bank Authority attempts to prioritize working with local organizations in Detroit, also called Community Partners. To be a Community Partner, a nonprofit, faith-based organization, or a community development organization must be located in Detroit, have federal tax-exempt status, be current on property taxes and fines, and receive a letter of recommendation. Pricing for properties is different for community partners, including discounts for auctioned lots and vacant land-based projects. This may be an option for many Community Enterprise Clinic clients.

            Clients interested in adding property to their assets or moving to a new space should consider buying from the Detroit Land Bank Authority. Whether your goal is to rehabilitate homes or start an urban farm, your goal fits with the DLBA’s mission to revitalize neighborhood growth and economic development in Detroit.


By: Ellison Hersch

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