delinquent property owners can't buy more?

**hamtown mike** · February-09-11, 04:26 PM

Did anyone catch the story on WDET about the idea of banning tax-delinquent property owners from purchasing any other property?

I heard the tease on the radio on the way in this morning but missed the conversation. Think it was on Craig Fahle.

I for one think it's a great idea but why stop at taxes? How about anyone with a code violation lien?

**Jimaz** · February-09-11, 04:42 PM

I can't find the article now but I think they're questioning whether this plan is even possible within the law. There's also some doubt about whether it can be effective. Something about hiding the ownership under separate corporations or some such.

It sounds pretty common sense to me though. It sounds like this speculation wheel is just spinning and not accomplishing anything.

**SWMAP** · February-09-11, 04:44 PM

Right - what seems simple is actually really complicated and doomed:

http://detnews.com/article/20110209/...tion-ordinance

**Richard** · February-09-11, 04:53 PM

Other cities do not seem to have a problem implementing this, of course they due their due diligence on who the actual winner of the bid is before turning over the deed.Only takes a few seconds to find out who is attached to a specific corp or LLC

**kraig** · February-09-11, 06:02 PM

It's reactionary, too reactionary. Both the City and County would do well to study the situation, develop realistic goals and come up with a realistic plan.

**Goose** · February-09-11, 08:46 PM

and while we are at it, lets ban fat people from buying food at mcdonalds...

**Planner3357** · February-09-11, 08:51 PM

It is possible, it's written into city land policy where I work. A new owner can be rejected purchase if he/she has outstanding taxes owed or liens. This is a way to protect us from having more vacant buildings..

**fryar** · February-09-11, 09:08 PM

Originally Posted by SWMAP

Right - what seems simple is actually really complicated and doomed:

http://detnews.com/article/20110209/...tion-ordinance

I just read through that article. The following are the objections:

Treasurer Raymond Wojtowicz told county commissioners on Tuesday that he's reserving judgment, but warned that "I don't think it's possible to restrict private business in conducting business with the county." A treasury staffer added the office is worried about costs of checking tax status and the measure's legality.

I don't get it. He doesn't think it's possible to restrict scofflaws from making a mockery of the state, and they can't just check their deadbeat database real quick?

IIRC, folks who don't pay their speeding tickets lose their license.

**Goose** · February-09-11, 09:23 PM

bad idea, this would not only hurt the potential purchaser, but it hurts the seller, why should the seller be forced to find another buyer because of this??

how about enforcing existing laws about paying property taxes and upkeep on properties... why is the answer ANOTHER law....

enforce what is on the books and the problem is solved....

**eastland** · February-09-11, 10:08 PM

Originally Posted by Goose

bad idea, this would not only hurt the potential purchaser, but it hurts the seller, why should the seller be forced to find another buyer because of this??

how about enforcing existing laws about paying property taxes and upkeep on properties... why is the answer ANOTHER law....

enforce what is on the books and the problem is solved....

Goose:
The ordinance is designed to stop speculators from loading up on county-owned property at auctions and then not maintaining or paying taxes on the property.

**mwilbert** · February-09-11, 10:41 PM

I'm not sure these properties should be auctioned at all. Why aren't they going into the land bank, and then held or disposed of in conjunction with an overall redevelopment plan?

**kraig** · February-10-11, 07:46 AM

Because that shit doesn't work.

**Richard** · February-10-11, 08:52 AM

Its not rocket science you have a master growth plan ,land bank those properties that are going to be in the path of this plan, what is left is considered surplus properties to be auctioned off.

So then who are you going to sell the surplus to? Someone that already has proven that they are not going to cover the taxes or maintenance ? Other then removing the the liability from the city, a $500 property sale hardly even covers the legal aspect of the sale.

Speculation entails going down to the city hall and looking at the master plan and buying those available properties from private owners that are in the path of future growth. IMHO

**DetroitPlanner** · February-10-11, 09:51 AM

This is really quite simple. If you owe taxes on your current real estate you can't buy more.

**detroitind** · February-10-11, 10:54 AM

The issue has two parts to it:

1) the properties that are bought for $500 have no real value. So a new owner hopes that they can off it for more than they paid for it prior to tax forclosure. The process of forclosure can only start after 2 years. This being said they sit on the property for 2 years do nothing and worst case is the city or county goes through the process to take it back. That process costs more than the parcel is worth so it is difficult to justify financially. On top of that the owner has had to do nothing and pay nothing with fear of only loosing that $500 at best in 2-3 years. Not a high risk to them. Even if you write citations against them best you will come up with is the property which once again causes more money in court filings then the property is worth.

2) the second portion of the issue is county vs city. The county has forclosed on several of these homes and they want the the money. To give them to detroit for a land bank is essentially giving money from the county to the city which the county uses to balance their books. The City of detroit has first right of refusal for the properties and can request that they be moved off the auction or purchase them. Currently it is my understanding that the city has spent all the money set aside for the land bank on key parcels and cannot afford to buy every forclosed property. This becomes a situation where the city had to pick and choose key parcels based on future plans or highest rate of return. Key parcels at this time included all properties along the woodward light rail.

so there is an issue with speculators investment and really nothing can be done to keep them out except for more money for the city to land bank and then upkeep properties or remove blight. By detailing who is involved in each purchase prior to sale could help stop these people from the endless cycle of nothingness and blight.

**mwilbert** · February-10-11, 11:06 AM

I don't doubt you are correct about the amount of money available to buy stuff at tax sale, but it would make sense to allocate more money. The amount of money you would have to spend to buy up all the $500 properties is chicken feed, and it would probably save that much in enforcement and legal costs if any substantial number of those properties would otherwise go to deadbeats.

**kraig** · February-10-11, 11:27 AM

Originally Posted by mwilbert

I don't doubt you are correct about the amount of money available to buy stuff at tax sale, but it would make sense to allocate more money. The amount of money you would have to spend to buy up all the $500 properties is chicken feed, and it would probably save that much in enforcement and legal costs if any substantial number of those properties would otherwise go to deadbeats.

There's one critical issue that you seem to keep missing. The City and County can't afford to maintain the properties that are currently in their possession. How are they going to be able to handle more?

**mwilbert** · February-10-11, 12:01 PM

What difference would you expect in how the speculators handle the property vs the city? I wouldn't expect any difference myself.

**Meddle** · February-10-11, 12:03 PM

Originally Posted by Goose

and while we are at it, lets ban fat people from buying food at mcdonalds...

Not a bad idea, but not really relevant to the conversation.

I can't see any reason this shouldn't be legal. Whether or not the Clerks would do their job of researching ownership is another issue.

Then again, a few greased palms would make the whole ordinance useless.

**kraig** · February-10-11, 05:04 PM

Originally Posted by mwilbert

What difference would you expect in how the speculators handle the property vs the city? I wouldn't expect any difference myself.

Right. So if the vacant lot is going to be a dump, the City or County might as well get the money for it. I don't like blighted property any more than you do. But, this isn't the way to go about it.

Besides, the rule is going to hurt the little person that lost one house and is trying to pick up another at an auction with their last few dollars than it is Dearing, Moroun or Thor Management and the others.

**MSUguy** · February-10-11, 05:12 PM

Originally Posted by kraig

Right. So if the vacant lot is going to be a dump, the City or County might as well get the money for it. I don't like blighted property any more than you do. But, this isn't the way to go about it.

Besides, the rule is going to hurt the little person that lost one house and is trying to pick up another at an auction with their last few dollars than it is Dearing, Moroun or Thor Management and the others.

How much more will the city have to spend when they want that land back for a development? If the property isn't going to be cared for better that land be in city hands than some speculator.

**canuck** · February-10-11, 06:38 PM

Originally Posted by kraig

Right. So if the vacant lot is going to be a dump, the City or County might as well get the money for it. I don't like blighted property any more than you do. But, this isn't the way to go about it.

Besides, the rule is going to hurt the little person that lost one house and is trying to pick up another at an auction with their last few dollars than it is Dearing, Moroun or Thor Management and the others.

It might be a good thing to consider a case by case basis for tax evasion on property tax would do.
The way things used to be done prior when applying for a loan; if one was solvent, had a decent cashdown and all the stuff that used to make sense once upon a time; then and only then would you be considered for a loan. Same difrenz vis-à-vis the city; if you wanna buy a house, all the nuts and bolts are in place, fine, the city will grant you an amnisty on a tax default or not. It depends on the client. Anyone who defaulted while they were in a speculative position are out, and potential small property purchasers would be checked on a case to case basis. You want to repopulate and reinvest in city properties, you need to get with the program. Obviously a lot of folks will need to dish out the tax money they didnt pay on a property in the city they defaulted on.

**kraig** · February-10-11, 10:28 PM

Originally Posted by canuck

It might be a good thing to consider a case by case basis for tax evasion on property tax would do.
The way things used to be done prior when applying for a loan; if one was solvent, had a decent cashdown and all the stuff that used to make sense once upon a time; then and only then would you be considered for a loan. Same difrenz vis-à-vis the city; if you wanna buy a house, all the nuts and bolts are in place, fine, the city will grant you an amnisty on a tax default or not. It depends on the client. Anyone who defaulted while they were in a speculative position are out, and potential small property purchasers would be checked on a case to case basis. You want to repopulate and reinvest in city properties, you need to get with the program. Obviously a lot of folks will need to dish out the tax money they didnt pay on a property in the city they defaulted on.

That's more like it. Case by case won't hurt the little guy as much. This knee jerk reaction that's being done is going to end up making big broad strokes.

**kraig** · February-10-11, 10:37 PM

Originally Posted by MSUguy

How much more will the city have to spend when they want that land back for a development? If the property isn't going to be cared for better that land be in city hands than some speculator.

What development? "Life is what happens while you're waiting for those moments that never come."
The City is full of areas that are being "saved" for development. A lot of developers have proposed projects that were turned down because they weren't considered big enough. World Series are won with base hits, not home runs.

**Goose** · February-10-11, 11:56 PM

so these people will no longer be able to purchase properties

and thus the few people willing to buy these worthless properties from whomever won't

so these worthless properties are now unsellable, what do you think is going to happen to them?

repo'd, abandoned, put on the auction block with no takers, no maintenace, ,no upkeep, same as before....

but, at least another government beuacracy has been created and a few new jobs pushing paper

and since/if these properties are worthless, which they pretty much are, only purchased for speculation, what tax money is being paid, isn't the property tax based on the assessed value? why is the city still trying to collect money on worthless property???