Outlier investigation reveals tax auction invites speculation-doesn’t require buyers to pay back taxes

Outlier users ask us again and again with help figuring out exactly who owns their home.

The Wayne County tax auction is a huge public property sale that has fundamentally changed Detroit’s neighborhoods. The sale has swept up close to 150,000 properties in the last 15 years – since 2012 being the busiest years. Some buying in the tax auction are looking for a good deal on a house. Many are investors looking to get as many homes as they can on the cheap.

Trying to trace homes through the auction process to find the owners also revealed how common it has been for investors to lose properties to tax foreclosure yet keep buying properties through the auction the next year. It’s against state law and that doesn’t seem to be stopping anybody.

This piece, published today in Bridge Magazine, lays out the investigation inspired and fueled by Outlier users. When data becomes available for this year’s auction we’ll be following up to see if the pattern continues.

IMG_1097Owe taxes? That’s OK. Wayne County will still sell you foreclosed homes.

Outlier investigates bungled rent-to-own program in Detroit’s Brightmoor

Dawn Wilson Clarke has a reputation among her friends and neighbors for being able to get things done. She is a native Detroiter, an Army veteran, professional education advocate, mother of five and founding member of the Brightmoor Alliance. She even makes time to keep up her side job as Cuddles the Hip Hop Clown.

Wilson-Clarke has been working hard to get somebody, particularly a city official or one of her elected officials, to do something about her American Dream and those of her neighbors, collapsing in Brightmoor. She has hit a wall.

Wilson-Clark moved to Brightmoor almost two decades ago on the promise of a rent-to-own deal. A nonprofit developer, Northwest Detroit Neighborhood Development (NDND) was building 50 homes with a mix of city, state, and federal money and a bank loan. The homes would be handed over to tenants, Wilson-Clark says she was told, in 15 years.

It’s been 17 years. Wilson Clark has already paid $110K for her home and if she wants to purchase it outright NDND says that will cost her an additional $59K. None of the original Brightmoor homes has been handed over to a tenant or sold at all. Wilson-Clarke is still looking for answers and accountability.

Read Outlier’s investigation in the Detroit News.



How does this kind of journalism work?

Outlier is pushing a new approach to journalism. We are service journalism on demand. We use data journalism to report differently. We are more inclusive of those usually devalued by news media. We more responsive to the community we aim to serve. Outlier’s model was featured recently in NiemanLab. It is a good summary of what we’re doing and why but if you’d like more, here are the FAQ’s:

Outlier doesn’t do articles, so how does it deliver the news

Outlier wants to deliver valuable information to busy people. We strip our news down to the basics. We deliver information over text message directly to our news consumers. We cover housing and utilities because Detroiters say those are their biggest information and accountability gaps. Our information is as personalized as possible, drawing on our own reporting and data we’ve found in the public domain or through Freedom of Information Act or public records requests. To see how Outlier works text DEMO to 63735.

How does Outlier engage with and stay accountable to its readership?

Every Outlier reader has the ability to easily get in touch with a reporter over text message. A reader simply texts “FOLLOW UP” and a reporter will reach out to them within 48 hours. We encourage readers to ask for a follow up if the information we provide doesn’t fit their needs, if they have insight they want to share with us, or if they have an question or problem they think deserves some news coverage. We chase down those leads or work with other local newsrooms to get answers.

How do you decide what to cover?

We use publicly available data and data from social service agencies to inform us about which issues Detroiters ask for help with and complain about most. We think this is most likely to lead to the kind of reports our news consumers will find valuable. 

How do people find Outlier’s stories?

Outlier doesn’t wait for news consumers to find us, we find them. We buy lists of Detroit cell phone numbers from a data broker. We text an introduction to Outlier and our news consumers can use the service right away. Anybody can opt-out, we never sell our lists and we don’t text users unless something important related to our coverage has changed.

Are you sure what Outlier does is journalism?


Where do you work? 

We cover Detroit, the community where we live and work. We proudly seek to put the information needs of low-income news consumers first as this is an overlooked and undervalued news market.

Who pays for this? 

We were funded as a pilot project by the W.K. Kellogg Foundation and our utility reporting is funded by a joint grant from the Community Foundation for Southeast Michigan, the Knight Foundation and the Ford Foundation. We are so thankful for their support and are experimenting with ways to make our work more self-sustaining.

Can I bring an Outlier project to my newsroom or area?

Of course! Get in touch and we would be happy to talk through options or ideas. Contact Sarah Alvarez at sarah@outliermedia.org.

The rental market in Detroit is getting better – as long as you’re not a renter.

Renting a home in Detroit should be a situation where most people can get a pretty good deal, and by deal I don’t mean a cheap price – I mean an affordable home worth the price.

After all this city is enormous, and there are more homes than people to live in them. which paints a profitable picture for those interested in real estate development or investing. Detroit has one of the most undervalued real estate markets in the county and not surprisingly this leads to one of the best markets for owning a rental.

From the renters side the data paints a darker picture (more details about data sources can be found at the bottom of this, and all, Outlier posts).

The majority of housing decisions in the Detroit housing market are not made on the basis of things like neighborhood, amenities, or architectural detail. Rather, the number one driver of where somebody in Detroit lives is money. The majority of Detroit renters are pretty financially constrained. The median annual income of a renter in the Detroit area is $25,000 and a full 33% of renters live below poverty level.

Housing in Detroit might be comparatively inexpensive with average rent for a 2 bedroom apartment is around $700, but it’s still unaffordable for a lot of residents. The general rule of thumb is that for housing to be considered “affordable”, a family should spend about one-third of their income on housing costs. In the Detroit area about half of families spend more than this. For people living in poverty, the amount of monthly income spent on housing is an unsustainable 88 percent.

So, as one ingredient in this stew of rental market mess we’ve got a lot of renters who need a deal. The other ingredient is housing stock with a lot of liabilities. The housing stock in Detroit is old, can have thousands of dollars in tax debt or back water bills, some are not even licensed rentals, and others haven’t been inspected recently. Worse, there is no way for a renter to find out what kind of legal or financial baggage a potential rental might have.

Landlords have access to a lot of information about their renters and they make decisions on who to rent to using that information. Renters should have more information about the places they want to rent in order to help them negotiate or make a decision. We’re rolling out a reporting project we hope might fill this information gap. Soon, anybody will be able to text the address of a place they’re thinking of renting in Detroit and get back a text report of the liabilities associated with that address including that data about inspections. They’ll also be able to text directly with a reporter if they have other information needs or have a story that could use following up.

*A note on data. Figures used here without hyperlinks are from the American Housing Survey, a survey done every two years by the Census. The figures are from the Detroit Metro area, and Outlier was told by census officials data could not easily be disaggregated in order to examine Detroit alone. It is likely, therefore, that the housing picture for renters is worse than presented here. I used tables from the Detroit Metro Metropolitan Area Survey C-01, C-07, C-09, and C-10, all from the RO-M, Detroit series. The tables have been updated with 2015 data.

For more on the difficulty of getting accurate data on rentals and renters, especially in lower-income markets, the notes section of Evicted by Matthew Desmond is incredibly informative. Desmond studied evictions in Milwaukee, Wisconsin and had to conduct his own large scale survey to get data reliable enough to use in his book.

What is an information gap and what’s so bad about it?

When there’s a disconnect between what the news media covers and what is actually important in people’s lives you get an information gap. These gaps have become a problem because;

  • they are large
  • they are concentrated
  • they aren’t getting fixed by the news industry and in fact, the economics of media right now are reinforce these gaps.

This is not something news organizations are doing on purpose. Basically, it’s economics.

Newspapers and online media make most of their money from advertising.  For public media the biggest chunk of revenue comes from members making donations. These business models depend on the idea of a loyal core audience. News organizations want to inform this audience in particular so they will be loyal. They also benefit when this audience has more money to spend on subscriptions, memberships or the things advertisers want to sell. Over time, this had led to news organizations working to please middle and upper middle class customers over everyone else and the value of most news is now as entertainment.

This means a lot of issues and perspectives outside those middle income communities don’t get much attention. If they do get covered it is more an exercise in translation for those middle income consumers. Since the news media plays a big role in keeping officials accountable to regular people, where there are information gaps there is also less accountability.

More reading: All The News That’s Fit to Sell, Pew Research Center report on local news consumption habits.




A better way to get better information

There is too much news and too little of it matters.

That’s not (only) a complaint, but a well researched reality. Outlier will be different. Our target audience is those news consumers discounted by most media organizations-the news consumers fed up with large information gaps and predatory businesses trying to take advantage of these gaps.

This is how our approach and stories are different:

Our information must have real value: A great news story can create a deep emotional connection to something you knew nothing about before. But a great news story could also just give you information you really need. Seriously, why isn’t that enough? Outlier will deliver highly targeted data-driven journalism directly to the phones of people for whom that information really matters.

We are user first: Our reporting is centered on the needs of our news consumers, some of the most time-strapped people in the country. We value substance over style. Our news is intensively reported and diligently crafted, but it is definitely not long form. It’s valuable information for busy people.

We are direct to consumer: Many if not most major news organizations have created information gaps in low-income communities by ignoring these places as full of potential news consumers. Outlier will partner with newsrooms that want to remedy this, but we will distribute our content independently. 

Take a look around to learn more about our research and our work. And join us in making news more powerful for real people. Stay tuned for updates about our pilot project in Detroit, launching summer 2016.