DETROIT (Reuters) - In a crowded ballroom next to a bankrupt casino, what remains of the Detroit property market was being picked over by speculators and mostly discarded.

After five hours of calling out a drumbeat of "no bid" for properties listed in an auction book as thick as a city phone directory, the energy of the county auctioneer began to flag.

"OK," he said. "We only have 300 more pages to go."

There was tired laughter from investors ready to roll the dice on a city that has become a symbol of the collapse of the U.S. auto industry, pressures on the industrial middle-class and intractable problems for the urban poor.

On the auction block in Detroit: almost 9,000 homes and lots in various states of abandonment and decay from the tidy owner-occupied to the burned-out shell claimed by squatters.

Taken together, the properties seized by tax collectors for arrears and put up for sale last week represented an area the size of New York's Central Park. Total vacant land in Detroit now occupies an area almost the size of Boston, according to a Detroit Free Press estimate.

The tax foreclosure auction by Wayne County authorities also stood as one of the most ambitious one-stop attempts to sell off urban property since the real-estate market collapse.

Despite a minimum bid of $500, less than a fifth of the Detroit land was sold after four days.

The county had no estimate of how much was raised by the auction, a second attempt to sell property that had failed to find buyers for the full amount of back taxes in September.

The unsold parcels add to an expanding ghost town within the once-vibrant town known worldwide as the Motor City.

Critics say the poor showing at the auction underscores the limits of using a market-based system to clean up property tax problems. They say the system has enriched a few but failed to deliver a way for Detroit to staunch its dwindling population and could worsen the vacancy crisis.

One proposed alternative would have officials take control of the tax foreclosure process through a land bank program of the kind being used to revitalize the nearby city of Flint.

The stakes in the debate are rising.

The number of Detroit properties in tax foreclosure has more than tripled since 2007 and seems certain to rise further. The lots for sale last week represented arrears from only 2006, well before the worst of the downturn for U.S. automakers.

"We have to keep in mind that GM and Chrysler filed for bankruptcy this year," said Terrance Keith, chief deputy treasurer of Wayne County. "Some people are going to be totally tapped out next year."

...

http://www.reuters.com/article/gc03/idUSTRE59O17F20091026

more, no doubt are on the way. This winter is going to be brutal and it doesn't seem as though anyone in the hope-filled Obama regime gives a good goddamn. A friend asked if the death toll in Detroit would reach Katrina levels, I asked why he thought it hadn't already. It is so clear: if the concern, here, were the people in need then the solution is obvious and immediately implementable. The problem is that the concern is not with the people in need, but "tax arrears" or "the market" or "property values" - all euphemisms for 'fuck the poor'...

But I think it's sort of a harbinger.

It wasn't till I was around 20 years old and had seen a few 'regular' cities that I understood how strange a place it is.

It still surprises me that investors aren't swooping in. I guess it shouldn't. But they could be buying up whole blocks, whole neighborhoods for next-to-nothing.

Maybe we should just all move there and turn it into a leftist community. LOL. I'll be going downtown in a few weeks for a concert, maybe I'll head in early and scope out some locations :)

Hell, the people who are still in Detroit would probably like it, given what it's like now.

Although I will say, as bad as it is, the recent media crap is kinda nuts. Like they keep using pictures of particularly photogenic buildings that have been empty for decades in their articles about recent decay. And there's one shot where they've made it look like it's this huge vast prairie right downtown, but there are homes (with people in them) and businesses and everything right outside the frame, and this picture keeps getting used over and over again.

I think the only thing that prevents that is the city's proximity to DC. My home town has become something of a bedroom community for DC's urban professionals, gentrifying blue collar neighborhoods, like mine. Can't think about it too much, brings out the beast in me. Probably helps the tax base.....

Who the fuck do those people think they are? Baltimore was a top tier blue collar city and now these bourgeois vultures are picking at the remains.

Detroit: A city for sale, and very few takers
By Patrick Martin
27 October 2009

Over a four-day period a huge portion of the city of Detroit was put on the auction block, but very few bids were submitted. Of the 9,000 homes and lots put up for sale for prices as low as $500, only 1,800 attracted buyers. Most of these were not prospective homeowner-occupiers, but speculators from New York City and California hoping to cash in on a quick flip of the property.

The auctions were held in a ballroom next door to a casino. According to an account published by Reuters, “Taken together, the properties seized by tax collectors for arrears and put up for sale last week represented an area the size of New York’s Central Park.”

No estimate was available of the total revenue generated by the auction, but it was certainly minuscule. For 200 properties in 12 city tax districts where information was provided, only $250,000 in revenue was brought in, for an average price of $1,250 per house or lot.

The total number of abandoned and vacant properties in the city of Detroit has skyrocketed from 46,000 to 78,000 over the past three years. According to data obtained from the Detroit Office of Foreclosure Prevention and Response and compiled by the Detroit Free Press, the total area of these properties approaches that of the entire city of Boston.

The city of Detroit occupies 139 square miles, and the vast majority of the housing stock consists of single-family dwellings. More than 50 years ago, when the US auto industry dominated the world market, the city’s population approached 2 million. Today, with GM and Chrysler bankrupt, the city’s population is down to about 830,000. Detroit is believed to be the only city in modern history to surpass the 1 million mark and then fall back below it.

Last week’s auction was conducted by Wayne County, which includes Detroit, in an effort to recoup back taxes owed on foreclosed homes, and to put some fraction of this abandoned housing stock back on the tax rolls. It was the second such attempt this year, both largely unsuccessful.

The 9,000 lots available last week were from foreclosures based on tax arrears through 2006. Tens of thousands more homes have gone into arrears since then. While the city of Detroit and Wayne County are no longer able to collect taxes on these properties, the city still provides fire cover and occasionally cuts weeds, exacerbating the $300 million deficit.

The Reuters report noted that local residents who bid for the relatively small number of livable homes were frequently outbid by speculators. A lieutenant in the Army, awaiting deployment to Iraq, sought to buy a home for his fiancée and two children. He tried to get a home in the Boston-Edison district, where old mansions built early in the last century provide a good value. After an investor who bought multiple properties outbid him for the home, he asked Reuters, “Why am I competing against a bank? It would be common sense to have a separate process for people who want to move back to the city or it’s going to stay empty.”

One of the principal factors in the housing crisis is absentee landlords. In the Brightmoor district, a working class area on the city’s far west side, a single owner has more than 100 abandoned lots.

Many people seeking to buy homes for themselves or family members were denied access to the auction for failing to fill out paperwork properly or missing a deadline. On Desoto Street on the city’s near west side, 15 vacant lots were listed in the auction but residents of the street were not even aware the properties were up for bid.

There was not much of a speculative bubble in real estate in Michigan, unlike the Southwest and Western US. The wave of evictions, foreclosures and consequent abandonment and collapse of home values in the Detroit area are the direct consequence of the collapse of automobile manufacturing. Detroit now has a 27 percent unemployment rate, and double-digit unemployment is the rule in the suburban counties as well.

According to a study published October 22 in the Detroit Free Press, three small suburban cities actually have higher foreclosure rates than Detroit itself: Hazel Park, Eastpointe and Pontiac, all primarily working-class areas once populated largely by auto workers and their families.

The Free Press broke down foreclosures by postal ZIP codes, and found that 18 ZIP codes had a foreclosure rate of one in every ten homes or worse. Detroit’s 48205, in the northeast corner of the city, had the highest rate, one of every 5.2 households (nearly 20 percent of all homes in foreclosure). Hazel Park followed with one of every 8.2 households (about 12 percent)

Of the 18 ZIP codes with a 10 percent or greater foreclosure rate, nine were in the city, mainly in its far western and northeastern neighborhoods along the city’s border, which were until recently the last remaining stable residential districts in Detroit; nine were in the suburbs, including Redford Township, Southfield (2), Pontiac (3), Hazel Park, Warren, and Eastpointe.

http://wsws.org/articles/2009/oct2009/detr-o27.shtml

Is Detroit unique, or representative?

Canton, Toledo, Youngstown, Fort Wayne, Lansing, Toledo, Cleveland, Buffalo, Jackson, Saginaw, Flint, Marion, Gary...