Race heats up for $1 homes

Race heats up for $1 homes

Both county, cities want property

BY KATHLEEN GRAY • FREE PRESS STAFF WRITER • April 13, 2008


Wayne County's plan to buy more than 700 federally subsidized and foreclosed homes in Detroit and another 500 elsewhere in the county for $1 each has hit a snag.


Competition.

The cities where the homes -- mostly abandoned and in disrepair -- are say the county is trying to poach what belongs to the cities.

Many of the cities had applied or were planning to request the $1 homes when they learned Wayne County was doing the same thing. Many had plans to rehabilitate the homes, sell them to the public or employees or demolish those in the worst shape.

The cities took their cases to the county, U.S. Rep. John Dingell and the U.S. Department of Housing and Urban Development, saying they knew better what was best for their neighborhoods. Twenty western Wayne communities signed a resolution last month saying they wanted first dibs on the houses.

The homes -- which are among 11,000 foreclosed HUD homes in Michigan and Ohio -- are another sign of the nation's mortgage foreclosure crisis. The $1 program began in 2003 to help communities fight blight. City officials know that one deteriorating vacant home on a block can begin to bring property values down for entire neighborhoods.

"We know what's best for our community, and we're very interested in partnering with the county on counseling programs to help residents save their homes," said Riverview Mayor Tim Durand. "But at the end of the day, we want the houses."

Bulk sales on hold
Since the complaints, HUD has put a hold on the bulk sales of $1 homes in Michigan and Ohio, which has affected the Wayne County Land Bank's inventory. The bank obtains and resells vacant properties, as well as foreclosed and criminally seized homes. Many of the $1 homes would have been turned over to community groups like Blight Busters or churches to be resold to residents within six months.

Any revenues generated from the land bank would go into a foreclosure prevention program for county residents. The county said it was ready to deal with the large inventory of homes. It had contracts with landscaping companies, had purchased 50 lawn mowers and had 22 inmates serving alternative sentences available to keep up the properties.

"We have a very vested interest in putting these properties back into productive use," said Deputy County Executive Turkia Mullin. "We need to make sure we nip this problem in the bud."

Difference of who knows best
Cities across Wayne County agreed but still thought they could do the job better.

In Dearborn Heights, for example, two homes the county bid on were along the Ecorse Creek, which floods every spring. The city was putting together an application for the homes and several other HUD properties in the city when it caught wind of Wayne County's competing request.

"We think it's ... wise to purchase those parcels now while we fix the problems with the creek," said Dearborn Heights Mayor Daniel Paletko. "Some of the other homes, we hope to use to encourage our employees to move into the city."

Program under review
Last week, HUD sent a memo to Wayne County, saying it was suspending sales of more than 10 of the $1 homes to any one community until the entire program could be reviewed.

HUD spokesman Lemar Wooley wrote in an e-mail to the Free Press that "we need to determine that there is a responsible plan and the capacity to implement the plan so that houses don't continue to sit vacant."

After evaluating about a dozen homes in Lincoln Park, the city wants to buy about 10 of the foreclosed homes and has set aside about $30,000 in federal Community Development Block Grant money to fix them up.

"Those homes are more in our face, and we can take more prompt action when problems arise," said city manager Steve Duchane.

In Redford, the township has set aside up to $400,000 for redevelopment of about a dozen HUD homes and will try to lure the city's police and firefighters into some of the homes at a discounted sale price.

"We'll purchase every one we can for $1," said Supervisor R. Miles Handy. "The way we look at it, if we demolish the property, then we can sell the lot. If we fix the home up ... put $40,000 into making it a nice attractive home site, we get a resident in our community and get rid of a potential eyesore."

County officials, however, aren't giving up. They are working with HUD on a pilot program to prove they can turn vacant foreclosed homes into family domiciles.

"When you get pummeled with 30 foreclosed houses, there's not a single community that has the resources to manage those properties," Mullin said. "We're certainly willing to back off, but we hope that the elected officials in those communities have the common sense to see how well we can do with these properties."