Lisa Simpson
Nov 6,2009
In: Foreclosure

Detroit Foreclosure Auctions Have a Weary Derelict Look

detroit

The Detroit foreclosure auctions have a weary derelict look with its array of over 9,000 houses in various stages of decay. Foreclosures have given the final blow to the damage left behind by the collapsing auto industry. It has devastated the middle and poor section of society. Many units had been seized by the tax authorities and these together compared in size to the Central Plaza of New York. The vacant lots added together are equal to the area of Boston according to Detroit Free Press.

Wayne County conducted a tax foreclosure auction – it being one of the most ambitious one to sell off at one go a bunch of urban properties. The minimum bid was $500 amounting to slightly less than one fifth of land in Detroit. It took four days to get going. Those adding to the selling list will further enhance the looks of the ghost towns in Motor City – once vibrant and throbbing.

The poor show at the auction underlines of limitations of market based methods to solve the problem of getting tax dues cleared. The system has fattened few but has failed to stop the exit rush of people from Detroit. This is worsening the vacancy crisis.

A tentative suggestion is of officials taking over the reins of tax foreclosure by a land bank programme – something like what is being done in nearby Flint.

Since 2007 the numbers of tax foreclosures have gone up three times. The indication is that it will further increase. Terrance Keith deputy treasurer of Wayne County said, “We have to keep in mind that GM and Chrysler filed for bankruptcy this year. Some people are going to be totally tapped out next year.”

Detroit is facing a deficit budget of $300 million as it struggles trying to control the weeds and fire outbreak fears in hundreds of abandoned units.

Many potential buyers in Detroit feel they have not got a proper chance in the auctions. Purchasers with bulging pocket outbid them in the auctions held right from California to New York. They competed for the few remaining habitable properties that were not mauled by the departing owners, vagrants or the elements. It was mostly the locals who had to turn away because they could not register timely. It is the speculators from outside the city that are once again winning the bids. This does not bode well for the future.

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