A home in west Detroit near Dearborn being shown to potential buyer, Oct. 11.

DETROIT — The Detroit Land Bank Authority is auctioning off vacant homes in Detroit’s neighborhoods, starting at $1,000. Bidding on each house is open for one day. The buyer must rejuvenate the property and bring it to habitable code within six months of the sale. The program is being implemented in neighborhoods with low-end vacancies to generate densely populated quarters in the city. 

Mayor Mike Duggan said the city is mapping entire neighborhoods to locate vacant homes, then suing their owners to fix them or hand them over to the city. The acquired homes are sold to the highest bidder on Internet auction sites like eBay. 

Duggan added that he hopes improved services will encourage people to buy these properties.

Marshall Bullock, a district manager in the Department of Neighborhoods, said the program brings in new residents, combats blight and increases property values in the entire neighborhood.

Bullock, who manages District 7, which includes the neighborhoods in west Detroit that border Dearborn and Dearborn Heights, said the city is trying to form a partnership with community organizations to “create the diverse community that we need.”

He said the city is coordinating with Arab and Muslim organizations, including ACCESS and the Karbala Center, to assist with the program. 

The Community Partnership Program allows Detroit-based nonprofits, including religious institutions, to endorse a buyer. An endorsement from a nonprofit organization participating in the program earns the new owner a 20 percent discount off the bidding price. The organizations can also buy up to 10 homes for a negotiated price from the Land Bank. In order for an organization to buy more than 10 houses, the nonprofit has to provide a plan for the homes and seek city council approval.

Individuals are limited to purchasing one home per month.

The city is filing nuisance abatement lawsuits against the owners of vacant properties. Bullock said the owners are mostly relinquishing the homes to the city, which has not lost a single one of the cases that have gone before a judge since the program started this spring.

He added that abandoned houses are a threat to the quality of life in the neighborhood.

After taking the home, the Land Bank either demolishes it or lists it for sale, depending on its condition. The lots of demolished homes are offered for $100 to adjacent neighbors. The first neighbor to apply gets the property.

The properties are relieved of their back taxes once the Land Bank purchases them. The property tax new owners pay is assessed based on the value of the homes in the neighborhood, according to Bullock.

The buyer must be a Michigan resident with no outstanding tax debt; 10 percent of the price of the home must be paid within three days and the full payment must be made within 30 days after the sale. All bidders must have a credit card with more than $1,000, the starting price of the auction, on file.

Mona Ali, the assistant manager for the Department of Neighborhoods in District 7, said the requirement to be a “resident” allows people who do not have U.S. citizenships to bid on homes. 

Bullock said the final prices of the homes depend on their size, condition and location. “Some homes sell for $1,100; the other day a home sold for more than $95,000 and it probably needs another $90,000 in repairs,” he said.

Homes must be rehabbed within six months of the sale. If the owner does not rehab the home, the Land Bank would retain ownership. 

Bullock said if the house is still a work in progress after six months, the Land Bank can grant an extension. 

The Land Bank holds an open house for the properties, so potential buyers can see them before they become available for bidding. 

An open house for six homes in the Aviation Subdivision, which borders Dearborn from the north side of Tireman, will be held on Saturday, Oct. 18. The registration site to check out the houses will be at 8071 Carlin. Last Saturday an open house was held for properties in Warrendale, a Detroit neighborhood located between Dearborn and Dearborn Heights. 

To browse and bid for homes, go to BuildingDetroit.org.