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The mandate of the Detroit Land Bank Authority sounds simple: collect the city’s vacant residential property and find ways to bring it back to “productive” use. Its definition of productive is to “provide as many opportunities as possible for people to purchase property.”
But Detroit is a city with an unprecedented amount of vacant property making the Land Bank’s task daunting and the agency’s decisions incredibly consequential. Should the Land Bank sell to the highest bidder? Should they distribute as much property as possible to residents? Demolish blighted property?
The Land Bank is also a “quasi-public” agency, which means it’s not as easy for Detroit residents to hold officials accountable as it is with a typical city department. It has received plenty of criticism, usually from Detroiters, for not being transparent enough about its sales processes or larger goals.
To shine some light on this agency, we’ve answered some of the most frequently asked questions and put the answers in one place.
How much property does the Land Bank own?
The Land Bank owned nearly 75,000 parcels out of around 380,000 in Detroit as of this month — a little less than 20%. But as recently as 2016, the agency owned around 97,000 parcels.
The majority of Land Bank properties — around 85% — are vacant lots. The proportion of vacant lots in the Land Bank inventory has increased over the past few years when compared to homes or commercial buildings. This is largely due to Mayor Mike Duggan’s focus on blight removal that demolished Land Bank homes and converted them to vacant lots. Since 2014, the city has demolished 20,000 Land Bank buildings and is in the process of demolishing an additional 8,000 Land Bank homes. The Land Bank has sold 15,700 structures and 22,000 vacant lots as of June this year.
Where does all this property come from?
Land Bank property is a combination of land owned by the city prior to the creation of the agency, properties that don’t sell at the Wayne County tax foreclosure auction and some transfers of property from the state. The Land Bank has also added 1,487 properties through a Nuisance Abatement program, which allows the Land Bank to legally seize vacant property that’s blighted or a source of illegal activity.
The Land Bank’s inventory has gone down in recent years, largely due to an increased number of vacant lot sales on residential streets.
Is the Land Bank a city agency?
Yes and no. The Land Bank was created by the City of Detroit and the Michigan Land Bank in 2008 to “acquire, develop and resell land.” Its activities are guided by a Memorandum of Understanding between the Detroit Land Bank and the City of Detroit.
While technically a local public agency, the Land Bank is overseen by a five-member board, not by elected city officials. The Mayor of Detroit appoints four, and the Michigan State Housing Development Authority appoints one.
The Land Bank is a public body, which means that “all records that are prepared, owned, used, in the possession of, or retained by the Land Bank in its official capacity are public records.” The Land Bank’s Board of Directors meetings and committee meetings are public and subject to the Open Meetings Act.
But the City Council has little to no say in how the Land Bank is managed, unlike with other city agencies. Though Land Bank officials clarified that Mayor Duggan has regularly appointed one board member based on a recommendation from City Council, and City Council approves the budget allocation for the agency. Although its activities are funded by the city, the agency does not require approval from the City Council to make most decisions including which properties it will demolish or sell, though Council approval is required for any Land Bank sale of more than nine properties bundled together or the sale of more than nine properties to a single purchaser within in a 12-month period.
Bruce Simpson, the city’s ombudsman, said the Land Bank should be a normal city department.
“Let’s put it this way: If the objective is to be as transparent as possible and have as much oversight as possible, then you put the function in a department,” he told Curbed Detroit in 2020.
How many people work at the Land Bank, and what is its budget?
The Land Bank has 147 full-time employees and 23 contract employees. The City of Detroit granted the Land Bank $11 million for the 2022 fiscal year, as a part of agency’s $24.4 million budget.
What have been the biggest Land Bank scandals over the years?
Multiple investigations uncovered problems with how the Land Bank handled demolitions. Contractors for the demolition program filled in holes with debris and contaminated dirt. Homes were demolished with asbestos and lead, despite the high risk of lead poisoning. Two employees of a firm that worked with the demolition program were charged with bid rigging.
In order to give City Council more oversight of its practices and contracting, the city created a Demolition Department in 2021 ahead of launching Proposal N, the city’s $250 million blight initiative.
Are Land Bank homes in good condition?
It’s very much a “buyer beware” situation when it comes to Land Bank homes.
The Land Bank receives many homes in poor condition and has difficulty maintaining them. Reporting from Outlier has shown that homes rapidly deteriorate after the agency becomes the owner.
In April, the City Council said that poorly maintained Land Bank property “continues to plague neighborhoods” and urged the Mayor’s Administration to work with the Land Bank to develop a plan to better maintain these properties.
All Land Bank homes are sold “as-is,” meaning any issues at the home are the responsibility of the buyer. The agency also doesn’t have to report all potential problems with a house because they are exempt from Michigan seller disclosures. The Land bank does include a condition reports for all homes it sells, and regularly provides free open houses or private walkthroughs for $35 if interested via the listing page for that property or by calling 313-974-6869.
Land Bank homes can sell for as little as $1,000, but renovations can be expensive. Many buyers should expect homes to need a new roof, water heater, furnace, plumbing, electrical and HVAC systems.
Outlier Media has also reported on the lack of reliable data from the Detroit Water and Sewerage Department about which Land Bank homes still have working water service lines. Replacing a service line can cost upward of $10,000. There’s no surefire way to know if a home has a working water line without putting a camera in the line, a procedure that can cost around $600. (Excavating the ground over the line is much more expensive.)
Due to the age of most Land Bank homes, many still have lead paint. This paint is a potential health hazard, particularly for children.
Some Land Bank properties, however, are fully renovated through the Rehabbed & Ready program.
Can Land Bank-owned properties get blight tickets?
City inspectors issue blight tickets when properties are not well maintained. The city uses these sometimes very costly tickets to incentivise owners to take care of their properties.
Ticketing a Land Bank house wouldn’t make sense because city funds would have to be used to pay the fines.
The city’s Buildings, Safety, Engineering, and Environmental Department (BSEED) can declare the need for an “emergency demolition” of a Land Bank property if it poses an immediate safety risk (possibly as a result of fire or severe weather) to neighboring homes, Strickland said.
Residents can report illegal dumping on Land Bank properties to the Department of Public Works for Illegal Dumping at 313-224-3901. To report dangerous trees on Land Bank properties, call the Abandoned/Dangerous Buildings Hotline at 313-224-3215.
Is the Land Bank required to maintain the properties they own?
All Land Bank structures should be boarded up or otherwise secured.
Under Proposal N, the City of Detroit must “stabilize” approximately 6,000 Land Bank homes, which includes covering up doors and windows with a transparent material called polycarbonate and patching the roofs. The Land Bank partners with other city departments to complete pre-sale work such as lawn mowing, board-ups and clean-outs for more than 600 properties currently under the Auction and Own it Now programs.
Yard overgrowth is cut back with an emphasis on the front yard, Strickland told Outlier. Homes in the Land Bank’s “Own it Now” program receive less sales preparation due to the “cost of cleanouts.”
Who can buy a Land Bank property?
The city and Land Bank have complete discretion over which properties the Land Bank sells.
Over the years, the Land Bank has been accused of sitting on property or choosing to sell to developers over residents. Some have gone so far as to describe the practice as property speculation.
In recent years, the Land Bank has increased the number of vacant lots available to residents. In 2020, it updated its Vacant Land Use policy to allow for residents to purchase lots on the same block as their house for $250.
The Land Bank also has a Community Partners program, which gives preference to nonprofit, faith-based or community development organizations in purchasing property. After becoming a community partner, organizations can submit proposals for projects and, if approved, are eligible for discounts on the purchase.
The Land Bank offers 50% off its auctioned properties for current and retired city employees. That discount also applies to K-12 school employees and those in the Skilled Trades Employment Program. Any buyer endorsed by a Land Bank community partner or who takes a homebuyer counseling course from a non-profit partner are also eligible for 20% off the purchase price of a Land Bank home.
How can I buy property?
Some Lank Bank homes can be bought at auction or immediately — most start at $1,000. You’ll have six months to reach compliance, or at least show steady progress on your renovations. Getting into compliance requires having the utilities turned on, a functioning kitchen and bathroom, a furnace, a water heater and more. See the full list of requirements here.
The Land Bank also sells move-in ready, rehabbed homes.
For developers or those with larger projects in mind, the Land Bank has a number of marketed properties. These can be bundled lots or single-family homes, as well as larger residential properties. These properties require interested buyers to submit a proposal that the Land Bank will then evaluate before a sale.
For just $100, you can purchase a side lot owned by the Land Bank if it is adjacent to your house and available for sale. For $250, you can purchase a neighborhood lot on your block if it is for sale, though there are a few additional stipulations: The nearby home must be your principal residence, and you can buy a maximum of two lots. There’s a 10-day holding period after your completed application is turned in during which someone else on the block can apply for the lot. The Land Bank will award it to whoever lives closer or to the person who submitted an application first if they’re equidistant.
The Land Bank can regain possession of the parcel if you incur blight violations during a three-year compliance period.
Enter your address here to see if there’s a lot on your block for sale.
Reach AARON MONDRY at aaron@outliermedia.org or 313-403-7221. Reach MALAK SILMI, the Report for America Corps Member for Outlier Media, at malak@outliermedia.org or 734-985-0377.
This article appears in today’s issue of The Dig, Outlier Media’s weekly newsletter on housing and real estate. Click here to sign up to receive it.
Corrections: This article has been edited to address three inaccuracies and two add clarifications. Homes must also be vacant to be seized by the Nuisance Abatement Program. City Council must approve all sales of more than nine properties to a single purchaser within in a 12-month period. While the Mayor is able to appoint four Land Bank board members, Duggan has regularly appointed one board member based on a recommendation by City Council. The employee discount is available to current employees and retirees, not all former employees.
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