Asbestos removal will add an additional $1,000 to $2,500 to the tab. The dumpsters cost money. The final task is to find volunteers, or pay workers, to demolish the house.
The city should be in the best position to remove houses, but the declining tax base means Detroit doesn’t have the money. And with so many people out of work, the city’s revenues are stretched thin.
“There’s a tremendous amount of taxes not being paid,” said David Szymanski, the chief deputy treasurer for Wayne County, which encompasses Detroit and other neighbouring cities.
“It is largely due to the fact that Detroit has gone from a population of 1.8 million to under 700,000. Therefore, we basically have housing for one million people who don’t exist, so those properties don’t generate any tax revenue,” he said.
Just about $706-million is owed to Detroit in overdue taxes and penalties, according to detailed property data compiled for the city by Loveland Technologies.
“What has happened is that the situation got so bad that enforcement of collection of taxes became impossible,” said Mr. Szymanski, who estimates that Wayne County loses more than $100-million a year in unpaid property taxes.
“It probably started off very innocently. ‘I have limited amount of money. I can either pay my taxes or feed my family.’ That’s an easy choice to make,” the deputy treasurer said.
The revenue shortfall combined with growing debts, political corruption and gross fiscal mismanagement finally pushed Detroit into bankruptcy a year ago. It is the largest municipal bankruptcy in the United States and the city owes more than $18-billion to thousands of creditors, including Wall Street banks, bondholders, retired city workers and pensioners.
The bankruptcy plan crafted by the state-appointed emergency manager, Kevyn Orr, provides the city with about $400-million to tackle blight, though the funds will come at the expense of creditors, who are expected to fight back.
If the bankruptcy judge approves the plan, Detroit still falls short of what’s required to remove all the ailing structures. Even if the city found enough capital to raze the existing blight, it will be facing much more.
The scale of the problem is monumental. Roughly 26 per cent of Detroit’s remaining houses are candidates for foreclosure. That’s nearly 100,000 homes. On top of that, another 59,000 households are considered “tax distressed” because residents are behind on their property taxes, according to Loveland Technologies’ website that maps out every property in Detroit.
“Tax distress is the clearest lens to the health of a neighbourhood. If you’ve got tax foreclosure, it is a bad sign,” said Alex Alsup, the chief product officer with Loveland.
In recent years, Detroit, like many other U.S. cities, became a target for real estate speculators, eager to snap up houses that had plummeted in value. Rather than drive a rebound in home prices, however, they have contributed to the city’s revenue shortfall, with many of the speculators buying houses and then failing to pay the property taxes. Owners are often hard to track down or unresponsive.
Beverly Frederick, 56, patrols her neighbourhood to make sure there is no blight. When she tried to get the listed owner of one property to take care of his battered house, he offered to pay her $40 to cut the weeds and vanished. That left Ms. Frederick and other neighbourhood volunteers to continually weed-whack and mow the lawn.
The city is now suing owners of abandoned houses and auctioning off houses seized through nuisance laws. Meanwhile Wayne county auctions off properties seized through tax foreclosures.
The foreclosures and blight have created another problem: what to do with all the cleared land. One in every three houses are gone and the vacant spots have become makeshift dumping grounds.
A city project called “Detroit Future City” developed a grand, all-encompassing plan that would repurpose a good chunk of the unused land into forests, farms and so-called green neighbourhoods lined with apartments surrounded by community gardens and forests.
The plan devotes 22 per cent of the city’s land to traditional neighbourhoods, down dramatically from the current 58 per cent.
“Large-scale urban agriculture is part of Detroit’s future,” said Michael Score, the president of Hantz Farms, a venture created to buy and rehabilitate vacant city land. The company recently bought 150 acres of land in Detroit’s east side and is growing a mixed wood forest on the site.