It has been almost a decade since the City of Detroit entered into a contract that would help it profoundly reshape the city’s housing and neighborhoods.
That contract, with the Detroit Land Bank Authority (DLBA), is now up for renewal by Detroit City Council. The role of the Land Bank is poised to shift, though it will be no less central to Mayor Mike Duggan’s ability to deliver on promises to eliminate blight and create more affordable housing.
Detroit’s Land Bank is the nation’s largest. It owns more than 70,000 properties — about 18% of all city property as of last month. The vast majority of Land Bank properties, more than 62,000 parcels, is vacant land.
As big as the DLBA’s real estate portfolio is, it’s smaller than it used to be. In 2018, the Land Bank owned more than 95,000 properties including about 20% of all single-family homes in the city. The DLBA has sold more than 18,000 homes since it began.
The DLBA needs a contract with the city to operate because it is both of and separate from the city government.
It is not run directly by the city, but by a five-member board of directors. Four of those members are, however, appointed by the mayor. Last year, the City of Detroit contributed $11 million from its general fund to the Land Bank’s budget of about $23.7 million.
The most recent agreement between the DLBA and the city expired Dec. 31, but DLBA spokesperson Stephanie Hume told Outlier Media both parties have been operating in “good faith” since.
City Council’s Planning and Economic Development Standing Committee is expected to discuss a new proposed contract in its meeting tomorrow. City Council President Pro Tem James Tate chairs that committee.
“I’m always looking for better communication,” he said when asked what he hopes this agreement will deliver on. Tate said residents are eager to know when properties will be boarded-up or sold, for example, and “the information is slow to get to residents.”
Tate also said City Council wants more influence on the Land Bank’s Board of Directors. City Council does not have the authority now to appoint any members of the board. Despite wanting some terms of their agreement to change, Tate said the Land Bank is necessary.
“I’m one of the only members who was around before the Land Bank was here,” Tate said. “I’m not an opponent of the Land Bank,” he continued. “I believe it needs to be tweaked.”
A state law passed in 2003 gives cities the power to set up land banks. Detroit set up its own five years later, but a formal agreement wasn’t in place until 2014. By then, the city wanted to transfer more than 15,000 residential properties to the Land Bank. Most were tax-foreclosed houses Wayne County did not sell at auction and managed under different departments. Duggan also wanted to use the Land Bank to oversee demolitions being paid for by the federal Hardest Hit Fund and later by voter-approved tax dollars.
Over the years, the DLBA has spent more than $265 million dollars to demolish 15,083 structures.
The deal on the table
The DLBA last updated its contract with the city in May 2020. This new proposed contract would be in place until the end of 2026. Now that the DLBA’s demolition program is over, its proposed contract says it will work to “expand outreach and relocation efforts for people occupying DLBA-owned houses” and conduct “City-wide blight surveys” in addition to its current programs.
The current version of the proposed contract does carry over safeguards from previous contracts. The DLBA would still need approval from the mayor and City Council if it sells or transfers at least 10 properties to the same buyer within a year. It would also need council approval to increase the price of side lots from $100.
The proposed contract diverges from past agreements in that it gives the Land Bank the authority to “develop new programs regarding unauthorized occupants in Detroit Land Bank properties” in partnership with the city’s Housing and Revitalization Department. Hume declined to answer questions about this provision while negotiations are ongoing.
City Council and the Land Bank are considering including a discount to Detroit residents who paid excessive property taxes due to overassessments of their homes. In the board of directors meeting on Friday, Tammy Daniels, the Land Bank’s CEO, said it has been discussing a new agreement with the city since July.
A few years ago, City Council members asked its Legislative Policy Division to research the possibility of dissolving the Land Bank and having the city take over its functions. The research found that the city was spending about as much across departments as the subsidy it currently gives to the Land Bank while handling fewer properties before the Land Bank was created.
The Legislative Policy Division also found that the Land Bank’s powers include the unique ability to clear titles, which allows it to eliminate any past claims on properties and get them “placed back into productive use in a much quicker and more efficient manner than the City or other public or private entities could provide.”
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