31,000 empty houses in Detroit, $500 may get you one of them. The City is strapped for cash
Detroit has been one of America’s poorest cities for decades without any significant investments from big corporations or the Trump administration. In the 2016 election, Trump promised Michigan residents real change but instead abandoned the state once he became president.
Despite the Herculean effort of Governor Whitmer to keep the city from bankruptcy, high unemployment and the COVID-19 pandemic, the city is financially strapped for cash.
One of America’s leading consulting firm Winston Rowe and Associates prepared a study offering solutions that can help propel the city back to prominence. The good old days of the booming auto section has come and gone but there is an opportunity for the city to take a 180 approach and consider capitalizing on its biggest resource, vacant land.
With Detroit Michigan sitting on a 430 square mile lake and the Detroit River this is some of the best real estate in North America, this is a gold rush waiting to happen if given a chance.
Detroit has become notorious for its urban blight. Most if not all of this real estate is owned by the City of Detroit should be sold not land banked.
Currently the City of Detroit uses a well-intentioned metered approach to selling these properties to individual’s and political insiders, which is clearly not working. Then asking Detroit and Michigan tax payers to foot the bill to combat blight.
A solution for Detroit would be to sell all of the land bank residential and commercial properties online in a massive auction to prequalified real estate developers and investors that have the extensive experience [not start up’s] in remediation and redevelopment which would be a condition of the sale.
This would convert these Detroit properties to assets instead of liabilities without tax payer money and a positive cash flow to combat blight at the same time bringing in much need property tax revenue and creating jobs.
There are an estimated at least 70,000 abandoned buildings, 31,000 empty houses, and 90,000 vacant lots, that’s a total of 191,000 commercial and residential properties
Using an example of an over simplified fictional math of what the properties may sell for.
90,000 vacant lots X $500.00 = $45,000,000.00
31,000 empty house’s X $500.00 = $15,500,000.00
70,000 abandon buildings X $2,000.00 = $140,000,000.00
A total of $200,500,000.00
If the 191,000 vacant or abandoned properties both commercial and residential paid property taxes of just $100.00 a month. The City of Detroit would have an annual positive cash flow of $229,200,000.00
Massive job creation.
Again, with the simplified fictional math.
If only two Detroit residents were hired for the related jobs per property.
191,000 properties X 2 Detroit residents = 382,000 related jobs
This is real money sitting on the table and The City of Detroit leadership needs to embrace a market-driven capitalist approach for solving the blight and jobs issue. The calculations in this article are extremely pessimistic of what properties would sell for, it could be Billions more.