Detroit City Council member calls for probe into Detroit Land Bank Authority deals
A Detroit City Council member wants to halt all pending Detroit Land Bank Authority "bundle sales" of 10 or more properties.
Councilmember Mary Waters says there's a risk the land bank is selling homes out from under residents. She held a press conference on Wednesday, in front of one of the homes that is currently under review in a bundle sale to Bedford Development for $105,000 — $2,500 apiece for each house.
Waters is on the council committee that reviews land bank sales.
So far that committee is delaying its review of the sale of 42 land bank properties for two weeks. The land bank says 26 of those houses have renters living in them.
“People who live in those homes are supposed to get first dibs" through the land bank's Buy Back program, Waters said. "It has not been happening. And so, as a result of that, residents are beginning to be displaced, losing their homes.”
The Buy Back program is meant to help renters buy homes owned by the land bank.
Detroit land bank officials say in this case, the renters were either not eligible for the Buy Back program or they could not be reached.
"The 26 properties in the Bedford development that are being questioned right now were included in the deal because we know they are occupied. It was not a surprise or a mistake," said land bank spokesperson Alyssa Strickland-Knight.
She said there's another land bank program, the Occupied Property Disposition Program, that's meant to ensure that when a buyer purchases an occupied home, the buyer "must commit to renovating the house and working with the occupants to help them stay in the house ... or provide them with relocation assistance."
In this case, the prospective buyer, Bedford Development, "will provide supportive services to the occupied homes," according to a proposal given to the city council. "The homes will be renovated and efforts will be made to work with the occupants in an attempt to help them stay in the home as homeowner or tenant."
Still, Councilmember Waters said her staff canvassed the 42 properties, and residents said they were not given the chance to buy the property or enroll in the Buy Back program.
Waters said she wants an audit of all sales of 10 or more properties over the last five years.
“We need to go back and see from the last five years what in the world has been going on with homes — ten or more — that they've been bundling and selling? What happened to those people? How many of those homes at that time were occupied when they sold them?” Waters said.
Strickland-Knight said 1,159 people have qualified for the program so far and 984 people have graduated and are now homeowners. The land bank is expecting more than 100 other people to complete the program this summer.
“If we halt the program now, it would derail 136 people who are expecting to graduate from the program this summer after a year of hard work saving for their first summer tax bill and participating in homebuyer counseling workshops. It would also prevent us from helping anyone who is currently trying to enroll in the program and find their pathway to homeownership,” she said.
Strickland-Knight said in the past 13 months, City Council has approved eight Detroit land bank deals, and Bedford would by the ninth. She said only one other deal, besides the current Bedford deal, has involved currently-occupied properties. The last deal had eight occupied properties out of 23.