Detroit, Michigan just had an auction of real estate property that the city holds. A lot of the property has been seized from owners who have abandoned them. A lot of the property has been seized from owners who have seen hard times and simply couldn’t afford to continue to pay the taxes. The properties run the gamut of conditions of decay from a modern interpretation of ancient ruins to the fairly pristine. And a lot of people wanted to attend an auction held to sell off all this property.
On the auction block was almost nine thousand homes and lots, the remnants of Detroit’s property market. The properties seized represented an area the size of New York’s Central Park. But it is rumored that the total vacant land in the motor city now occupies an area almost the size of Boston. And what little remains of the good stuff was being picked over by deep pocket speculators from around the country leaving the more downtrodden parcels of land to the locals who have more of an incentive to rebuild neighborhoods.
Many potential homeowners that the city so desperately needs to rebuild communities judge the auction process unfair. Investors from California and New York were competing with each other to claim the relatively few livable properties. People looking to buy properties for their families and make the investment to rebuild neighborhoods have to compete with investors who have never even laid eyes on the properties they are buying and have no intention to ever see them let alone live in these homes and make the commitment to help restore the city.
The story of Detroit’s real estate auction reminded me of my own ordeal with trying to buy abandoned property here in St. Louis, Missouri. The Peacemaker family spent the better part of a year and a half looking for a home to buy. We wanted one of the old school construction jobs. We wanted an all brick house built a hundred years ago when a house was built to last pert near forever. House after house that we saw and a few we tried to buy only to hit road blocks. Many times we were too late. We would try to buy a home only to be told that the house we wanted had been sold to an investor.
We were watching the four family house right next door to the apartment we were renting. We saw that the building was recently abandoned and we knew it was just a matter of time before it would come onto the market. We called the police when people broke into the home. We tried to protect it. And the very morning the building hit the market we were told by our real estate agent that it was already sold to an investor. That was almost a year ago. That house continues to sit abandoned and a blight to the neighborhood to this day. The city takes responsibility for keeping the yard from getting too far out of hand. But the city typically waits until whatever passes for grass looks like prairie wheat and weeds grow into bushes before getting someone over there to do a half-assed job of maintaining the yard. They don’t even pick up the trash before running across the lawn.
But somebody made a nice investment and will no doubt make a little money whenever the market comes back. In the meantime, the neighborhood has to deal with one more house that’s unavailable. Not only is it unavailable, it is one more blight in a community full of blight. And the more blight in the community, the less incentive residents have to stay and help rebuild. And the less incentive residents have to stay and rebuild, the more opportunities investors have to invest in foreclosures and abandoned properties and the like.
All an investor needs is one local real estate agents who doesn’t give a damn about the community. The same is true about a real estate auction intended to get land off the city’s books. If someone in New York has the money to pay for services then it doesn’t matter if a building or piece of land gets used or continues to decay from neglect. All that matters is the short term benefit of immediate enrichment. The long term, socially responsible gains associated with making sure that people have access to housing and a community has a strong foundation of neighbors who care about being good neighbors.
The American way has become a selfish way. Instead of people working together in a socially responsible way we continue to embrace a philosophy that leaves ourselves open to be plucked by carpetbaggers who don’t give a damn thousands of miles away. Those people who invested in those Detroit homes will do very well whenever the city is able to turn its self around. But in order to turn its self around, somebody has to be able to make a commitment to live in the city. That can’t happen as long as investors keep buying up all the good places. At this rate, the city is unlikely to turnaround any time, neither sooner nor later.