Houses that are Cheap to Build
Want to buy an incredibly cheap house in Detroit? You're in luck - just make sure you read the fine print first.
A new program introduced by Mayor Mike Duggan Monday addresses one of Detroit's largest problems - thousands of vacant and blighted houses - by auctioning off some of the nicest ones to people who want to live in a Detroit neighborhood. (Scroll down to see a a slideshow of the properties.)
The Detroit Land Bank Authority's Building Detroit auction site initially lists several city-owned homes in East English Village, a residential neighborhood on Detroit's east side, with starting bids of $1, 000 each. The auction for each property will last one day only, with staggered dates in May.
Almost every listing in the auction looks like a steal for a grand, at least from the outside. But Building Detroit is up-front about possible costs new owners might incur, and some houses need extensive repairs. The new auction will also have open houses for the properties on April 27, unlike the summer auction, in which houses must be bought without knowing what's inside (or what's been stripped by scrappers).
Building Detroit is restricted to Michigan residents, companies and organizations who have not already lost a property due to back taxes in Wayne County in the last three years. These requirements seem aimed at eliminating out-of-state speculators who scoop up houses and then don't take care of them, a problem that sometimes occurs with properties in the county's annual tax auction. It also might dissuade less serious buyers - some have purchased homes in the tax auction, only to abandon them once they see the high costs for renovation or steep property tax bills.
Winning bidders won't just hand over a check and walk away; the city requires new owners to sign contracts agreeing to bring properties up to code and occupy them within six months of purchase or risk forfeiting the property. The Land Bank may extend the six-month deadline on a case-by-case basis for owners who have made significant progress on renovations.