Fireside Chats With Duggan: Tax Auction & Vacancy Edition

Editor's note: This is Part 3 of a three-part break down of an interview conducted Monday March 10 between Duggan and Mode Shift Staff Writer Amy Swift. This segment’s focus is on auction and vacant property related issues.

MS: The tax auction has obviously become a huge challenge in this city. As it stands, it looks like the number of tax-foreclosed properties offered at auction in 2013 will surpass the historic high of 22,000 properties offered last year. What is your opinion of the auction as it stands today?

Duggan: I’ve been highly critical of it from the beginning. The Treasurer has complained to me about my criticism, but there’s nothing about the way abandoned properties are handled in this city that makes any sense.

The city of Detroit owns 60,000 parcels of land. The State of Michigan own 10,000 parcels of land in the city only because the city didn’t want to take any more, so now the state has them. The city has a land bank, which could buy or sell or dispose of these properties quickly and efficiently. None of the city’s 60,000 parcels are in the land bank. They’re over in Planning and Economic Development, which means that if a neighbor buys a lot next to their house they need city council approval for each of the individual 60,000 parcels.

We’re letting people with a history of tax delinquency bid on these auctions. There is nothing about this auction that makes any sense.

There’s no logic to any of this, and then the tax auction continues to dump more and more in.

The tax auction sells to some people who are contributing great value in buying and renovating houses, and it also sells to people who are just letting the houses decay, essentially holding them as a lottery ticket in the hopes that Mike Ilitch comes along and wants to put a development there so they can sell it for a lot of money.

We’re letting people with a history of tax delinquency bid on these auctions. There is nothing about this auction that makes any sense.

I think it will take a change in state law. I’ve talked to the Governor about it and I’ve talked to the Treasurer about it. Nobody disagrees, we just haven’t done anything about it, but we need to stop this auction process. We need to think about which parcels of land the city ought to be banking for long term (returning it to natural vegetation or whatever), which areas we’re trying to develop, and we need to certify the buyers in a more thoughtful way so that people who are legitimately fixing up houses are encouraged to buy. People who are already holding a bunch of abandoned houses and not paying any taxes are excluded. None of those things are being done.

This theme of every neighborhood has a future will have a very specific plan of statutory changes and the like, but the key to this city’s turnaround is control of our vacant property. Nobody has thought it through in a comprehensive way, but we’ll be talking about it in this campaign.

MS: Not all of the properties in the auction are abandoned, which is another untold consequence of the tax auction. Very often there’s a resultant social instability as a result of property owners losing their homes. On the front end, do you have plans to help homeowners that are either in pre-foreclosure or are struggling with tax delinquency in order to keep people in their homes?

Duggan: Yeah. What I did at the prosecutor’s office helped that enormously because we filed suit on every abandoned house on a block. It didn’t matter if your uncle died and left it to you and you can’t handle it, or if you were a bank that foreclosed. If a property is vacant it is as much a danger to the rest of the block no matter who owns it, so I filed suit against everybody including the banks.

When the banks realized that when they’re foreclosing on a house and they don’t have somebody to go into it, all that was happening was that the prosecutor was suing them and taking the house from them. They were more willing to work out arrangements for people to stay in the homes, so we need to go back to that. But my position is going to be, if you leave that house vacant we’re going to take it and sell it to a family that wants to be there whether you’re a bank or whether you’re an individual. I think it’ll have a positive effect.

MS: Scrapping is of course a huge barrier to renovation work of any kind in this city. There was a bill introduced into state legislature last year that would impart regulations on scrap yards to help curb scrapping. Is that something you would be in support of?

Duggan: We had the solution when I was in the prosecutor’s office. […] It is a crime in this state to purchase stolen property. We should actually be responding to citizen calls when they call to [report] a house is being stripped, which the police don’t today [do] very frequently. What I was doing was seizing the scrap yards and prosecuting the scrap yards that were buying the scrap. If there’s not a place for people to sell, they won’t be pulling up in a truck and stripping the aluminum siding off the house.

All we need to do is be very vigorous about prosecuting the people buying the scrap, and seizing the scrap yards where the people are. When we do that we’ll dry up the market. So we can do all the other things, but we need to take the profit incentive out of it. That’s the cleaner way to do it. We need to get back to that.

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