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The 2014 Wayne County tax auction is over, but key details slow to emerge

Oct 29, 2014

Credit Sarah Cwiek / Michigan Radio

The final round of the annual Wayne County property tax foreclosure auction closed on Tuesday.

This year, about 24,000 properties—the vast majority located in Detroit--were up for auction over two rounds.

The auction has become a real estate mega-event in recent years, as the number of tax-foreclosed properties has soared, and bidding moved online.

More than 7000 of the properties up for auction this year were believed to be occupied.

Ted Phillips heads the United Community Housing Coalition in Detroit. For the past 5 years, the group has helped low-income homeowners who lost their properties try to win them back through the auction.

Phillips admits it’s not the ideal way to help people keep their homes--but says it’s sometimes the only way in a city beset by widespread poverty and a dysfunctional tax system.

“The auction shouldn't be a way of correcting tax policies," Phillips said.

"In the bigger picture, we need to look at getting [property] assessments right, and getting notices out to folks who are low-income and qualify for exemptions. So we get it right to start with, and don’t have to worry about people going to auction.”

But as housing prices edge higher, and auction participation explodes alongside the number of properties available, Phillips said it’s gotten harder for many people to reclaim their homes that way.

The massive auctions have also sparked growing concerns about irresponsible speculators looking to gobble up properties on the cheap.

In an effort to discourage that somewhat, Detroit and Wayne County officials put together a “blight bundle” this year--a package of more than 6000 of the city’s most distressed properties.

Few expected anyone to bid for the bundle, which comes attached to blight-prevention measures meant to be cost-prohibitive. If no one had bid, the properties would have transferred to the Detroit Land Bank Authority.

But the bundle did receive a bid: more than $3.1 million from a group called Eco Solutions, led by Detroit developer Herb Strather.

The group’s backers, and their plans for the properties, remained murky as the auction came to a close. Strather is expected to announce more details Wednesday morning.

Under the terms of the blight bundle agreement, the buyer must make a 10% payment within 24 hours, and pay the remainder of the price within 14 days. Then it must either demolish the blighted properties in six months, or present Wayne County Treasurer Raymond Wojtowicz with a development proposal for approval.

The Treasurer’s office hadn’t released final auction totals by Tuesday night. The office also allowed bidders to stay anonymous this year, so most auction winners remained unidentified.

Update: The Wayne County Treasurer's office released final auction numbers Wednesday. It counted 17,196 properties sold over the two rounds, for a total of about $66 million. According to the website Why Don't We Own This?, which tracks the auction in detail, that left 8,453 properties unsold, with a tax collection gap of more than $53 million.