Many homes that go into tax foreclosure in Detroit are owned by landlords. The renters are often booted out once the homes are sold at auction.
In a pilot project, Detroit has bought 80 of these homes where tenants have expressed interest in becoming homeowners. The city used right of first refusal for the purchases. That means the city can buy the properties before they go to auction, paying only the county and state portions of the taxes owing, but not the city portion.
Ted Phillips is executive director of United Community Housing Coalition, which is partnering with Detroit.
"There's 80 tenants that we hope will be able to buy the homes that they're occupying for a portion of the taxes that their landlord failed to pay," says Phillips. "They're either going to basically buy directly from the city, or if they don't have sufficient funds, we will buy it and then sell to them for the cost of what it took to do that."
Phillips says most of the houses were purchased by the city for about $5,000. That means a tenant could own the house outright after less than a year of monthly $500 payments. That's often about the same amount they were paying in rent.
The tenants were chosen based on factors like motivation and financial ability to maintain the home and pay the property taxes going forward.
City council could give final approval to the as soon as this week.