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Blast from blog past.
Author: Raine    Date: 07/24/2013 12:53:06

In October 2009, I wrote this blog about the housing crisis in Detroit. I am reposting it as written.
-----------------------------------------------------------------------------

Amid the chaos of our crappy economy it might be easy to forget that there are still thousands, if not hundreds of thousands of homes that are still empty due to the mortgage crisis. Reuters reported that Detroit tried to auction off "9,000 homes and lots in various states of abandonment and decay from the tidy owner-occupied to the burned-out shell claimed by squatters." Only 1/5 of them sold. The starting bid was $500.

Location, they say, is everything, and a town like Detroit, devastated by Auto industry layoffs, is no exception. Even one house left empty in a neighborhood drives down prices, but 9000 in a city? That would fill up Central Park. Detroit - like other cities - has chosen to look at these empty homes and lots as a potential source of revenue.

The biggest problem with this situation, is that there are people expecting to make money off this total disaster area. The housing crash in this nation is a disaster of Katrina-like proportions. Instead of nature, it was caused by greed and unregulated capitalism. City and state governments trying to solve the problem with the same thing that caused the disaster seems not only counterproductive, but insane.

I have long wondered why, when a home is foreclosed, the bank that reclaims the mortgage is not held responsible for it's upkeep. Aren't they the ones taking it back? Doesn't that make it their investment as well? At what point do the people who helped create this crisis become responsible for it? Cities like Detroit are trying to replenish the tax revenue they lost from the housing crash -- shouldn't banks bear some of that responsibility? They are making money, and they still own these houses; they are not paying taxes on those houses, and they are not maintaining those houses -- driving the values down.

Maybe that is what the banks and investors wanted all along.
Many potential homeowners that Detroit desperately needs said they felt penalized by the auction process.

They mostly found themselves outbid by deeper-pocketed investors from California and New York who were in a race to claim the auction book's relatively few livable properties.

Dozens of potential bidders, mostly local residents, were turned away on the first day of the auction by deputies after they failed to meet the morning deadline for registration.

Ross Wallace, a lieutenant in the U.S. Army, turned in his check for $500 and waited on the auction floor in full dress uniform for a chance to buy a Detroit house on the cheap.

Wallace, 27, said he did not want to leave his fiancée and two children with a mortgage before shipping out to Iraq later this year.

"I still have student loans and I'm trying to be responsible. I don't want to leave debt," he said.
Wallace waited for the auction to roll around to Detroit's Boston-Edison district, a once stately area that was home to boxing legend Joe Louis and Motown founder Berry Gordy.

But he was quickly outbid. An unidentified investor at the front of the room who had scooped up several dozen properties took the home Wallace wanted for about $15,000.

"Why am I competing against a bank?" he said later. "It would be common sense to have a separate process for people who want to move back to the city or it's going to stay empty."
A soldier can't even get a home for his family and yet investors can blind bid from California. Detroit and other cities need to start taking care of their own communities by allowing locals to buy these properties. Capitalism is not going to save this city and others like it. To expect the very people who caused this problem to come in, purchase these properties and pay off the $300 million budget deficit is irresponsible and foolish. Those houses are being bought to sit there empty and in the same state if disrepair, until the very people who drove the market down decide that Detroit is worthy again of their money. In the meantime, the city is still paying for the cost of 'cutting the weeds and responding to fire calls for thousands more abandoned lots.'

It's a scam -- and Detroit has fallen for it.

I don't have a lot of experience with rebuilding a community or economics, but there seems to be a few smart things the city could do here. Perhaps by cutting red tape and letting local residents have priority to these home may make for an easier transition -- the properties would be occupied. Let that be a requirement. Allow non-profits to buy these houses,and resell them to low income families. How about partnering with a land trust group? Then tear down the houses that are lost, and make a park. In the meantime, the families that do move in can keep what little money they have in their own communities. There is great potential here, and it isn't going to happen overnight, but it is better to include actual residents into the process, instead of bending to a million dollar investor in a state thousands of miles away.

There are no easy answers, but allowing real estate speculation seems to me to be the wrong one. You simply don't solve a problem with what caused the problem in the first place.
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&
Raine
 

68 comments (Latest Comment: 07/24/2013 22:10:20 by BobR)
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Comment by TriSec on 07/24/2013 13:10:31
Morning, comrades!

After seeing the Detroit photos yesterday, I skimmed around some Real Estate sites out of morbid curiosity.

Very few homes are listed out there as "Single Family" homes...they're all being pitched as "Investment Opportunities".

The one that killed me was a 3 bedroom, 3 bath house of about 3900 square feet that I saw. For $50,000. Not a typo.

A similar house here in Waltham would be going for around $650,000.

Absolutely unbelieveable.

(And there were literally hundreds of listings for less than what I paid for my car, including a perfectly reasonable "starter" home for about $14k. But then it's Detroit; no work, and the schools suck.)



Comment by Mondobubba on 07/24/2013 13:19:24
Comment by Raine on 07/24/2013 13:20:11
What is happening in Detroit is a neo-con's wet dream. This isn't a joke, it's being looted by the 1%.

Comment by Mondobubba on 07/24/2013 13:33:36
Comment by wickedpam on 07/24/2013 13:36:13
Morning

Comment by Mondobubba on 07/24/2013 13:39:22
Royal baby name: Tupac Biggie Widsor.

Comment by Scoopster on 07/24/2013 13:39:44
Comment by wickedpam on 07/24/2013 13:40:21
Hey if anyone uses Chrome I just found what appears to be a good FB manager app/ext Social Fixer

Comment by Mondobubba on 07/24/2013 13:43:17
Quote by TriSec:
Morning, comrades!

After seeing the Detroit photos yesterday, I skimmed around some Real Estate sites out of morbid curiosity.

Very few homes are listed out there as "Single Family" homes...they're all being pitched as "Investment Opportunities".

The one that killed me was a 3 bedroom, 3 bath house of about 3900 square feet that I saw. For $50,000. Not a typo.

A similar house here in Waltham would be going for around $650,000.

Absolutely unbelieveable.

(And there were literally hundreds of listings for less than what I paid for my car, including a perfectly reasonable "starter" home for about $14k. But then it's Detroit; no work, and the schools suck.)



Tri, there is plenty of work in Wayne county, just not in Detroit. It is all in the burbs.


Comment by Mondobubba on 07/24/2013 13:56:13
Because it is raining and we are being down today I give you creepy-cute 3-eyed kittens!

http://www.marionpeck.com/paintings/2003-2005/images/lg/kittens.jpg


Comment by Scoopster on 07/24/2013 13:59:43
I have the overwhelming urge to write a blog post.. but I don't have the time because I'm at work ARGH!

Comment by Raine on 07/24/2013 14:02:32
See?

Nearly half of the adult population is functionally illiterate. Detroit fails to protect its citizens and their property rights. It was recently ranked the second most dangerous city in America, behind only Flint. No one says they wish to move to Detroit to send their kids to Detroit Public Schools.

Detroit has too much land area and infrastructure for its current population of 700,000. The city had about 1.9 million in 1950 and it no longer makes sense to have the geographic boundaries it once had.

The time has come to think outside the bun.

Suppose that portions of Detroit were simply sold to private developers to create private cities.


And then there is this:
Well, in this case we're talking about a black city, a black city that's had a black political establishment. And this is now being directed--many people believe that because it has been framed in a racist manner, that somehow the city of Detroit had this coming for the mismanagement and corruption and so on.

Well, the underlying causes have really very little to do with corruption. Perhaps what was happening is that during corrupt practices of the prior mayor, for example, they were not looking at what was happening to the debt that was being accumulated with the banks, and the banks were very happy to do this. So I think the racism in it is that the city of Detroit and the residents are being blamed for a crisis that was generated by the banks.
They have redlined Detroit over decades (it's not just white flight and it's not just the suburbanization af the area after the highways system was built.) Banks redlined this city for the pleasure of the rich to come in an privatize it.

And as far as city workers and retiree's, they have reason to be afraid.
The average annual pension payment for Detroit municipal retirees is about $19,000. Retired police officers and firefighters receive an average of $30,500. Top executives and chiefs can receive $100,000.

Police and firefighters don’t pay into the Social Security system, so they don’t receive Social Security benefits upon retiring.
They are facing a very real possibility of losing their retirements. Why is that? The pension plan predates the Social Security Act of 1935.

More details:
Approximately one-fourth of employees of state and local government do not participate in Social Security. This includes most to substantially all public employees in Alaska, Colorado, Louisiana, Maine, Massachusetts, Nevada, and Ohio.

In addition, approximately two-thirds of public safety officers--firefighters and police officers--do not participate in Social Security. These workers are in the seven states listed above and many other states.

An estimated one-half of public school teachers do not participate in Social Security, including a majority to substantially all in California, Connecticut, Illinois, Kentucky, Missouri, and Texas.

Also, more than one-fourth, but less than one-half of public school teachers in Georgia and Rhode Island also do not participate in Social Security.


here is why:
Both employers and employees who do not participate in Social Security do not pay the Social Security portion of the FICA tax, (6.2 percent of payroll each). Public pension benefits for non-Social Security-eligible employees usually are higher than those of other public employees, to compensate for the absence of Social Security benefits.

Non-participation in Social Security dates to the origins of the Old Age, Survivors, and Disability Insurance program in 1935, when coverage was limited to private sector workers due to constitutional concerns regarding the authority of the federal government to impose taxes on states and political subdivisions (see Section 218 agreements, below). These concerns were addressed in Social Security Amendments of 1950.


Comment by TriSec on 07/24/2013 14:11:25
*non sequitir*

One of the benefits of going to a long-term BSA camp is that I actually get to live and breathe most of my "personal mission statement" and "values" for the week. (Yes, I'm a longtime assimilate of the Franklin/Covey planner system.)

It's very rare that I can recite the oath that my statement comes from in the proper context, as it's associated with the Honour Society and I attend official functions so infrequently....



Comment by Raine on 07/24/2013 14:14:49
Because Mayor MaryLouWho is just like him?




Comment by BobR on 07/24/2013 14:14:57
Quote by Mondobubba:
Quote by TriSec:
Morning, comrades!

After seeing the Detroit photos yesterday, I skimmed around some Real Estate sites out of morbid curiosity.

Very few homes are listed out there as "Single Family" homes...they're all being pitched as "Investment Opportunities".

The one that killed me was a 3 bedroom, 3 bath house of about 3900 square feet that I saw. For $50,000. Not a typo.

A similar house here in Waltham would be going for around $650,000.

Absolutely unbelieveable.

(And there were literally hundreds of listings for less than what I paid for my car, including a perfectly reasonable "starter" home for about $14k. But then it's Detroit; no work, and the schools suck.)



Tri, there is plenty of work in Wayne county, just not in Detroit. It is all in the burbs.

Hey - I work from home. I could pay next to nothing in a mortgage payment, and bank most of my pay. Of course - it would mean living in what looks like a war zone.

Comment by Raine on 07/24/2013 14:30:11
It will be interesting to see what the family has to say today.


Comment by Mondobubba on 07/24/2013 14:44:38
Quote by BobR:
Quote by Mondobubba:
Quote by TriSec:
Morning, comrades!

After seeing the Detroit photos yesterday, I skimmed around some Real Estate sites out of morbid curiosity.

Very few homes are listed out there as "Single Family" homes...they're all being pitched as "Investment Opportunities".

The one that killed me was a 3 bedroom, 3 bath house of about 3900 square feet that I saw. For $50,000. Not a typo.

A similar house here in Waltham would be going for around $650,000.

Absolutely unbelieveable.

(And there were literally hundreds of listings for less than what I paid for my car, including a perfectly reasonable "starter" home for about $14k. But then it's Detroit; no work, and the schools suck.)



Tri, there is plenty of work in Wayne county, just not in Detroit. It is all in the burbs.

Hey - I work from home. I could pay next to nothing in a mortgage payment, and bank most of my pay. Of course - it would mean living in what looks like a war zone.


That sounds like a plan!

Comment by TriSec on 07/24/2013 14:45:53
I can work from home too, although I rarely do.

I'm fortunate that what I do in healthcare is a finite resource - there's actually very few of us out there that truly understand the ANSI 5010 format for claims and all the associated workflows.

With ICD-10 in the offing, I'm back in high demand; my inbox and my cellphone have been ringing with many contract offers.

(If I ever left ol' New England, I'd head for North Carolina. I really can't say why. Although I have had some nibbles from the left coast.)


Comment by Mondobubba on 07/24/2013 14:57:54
Quote by TriSec:
I can work from home too, although I rarely do.

I'm fortunate that what I do in healthcare is a finite resource - there's actually very few of us out there that truly understand the ANSI 5010 format for claims and all the associated workflows.

With ICD-10 in the offing, I'm back in high demand; my inbox and my cellphone have been ringing with many contract offers.

(If I ever left ol' New England, I'd head for North Carolina. I really can't say why. Although I have had some nibbles from the left coast.)



North Carolina??? The newest bastion of stupid? Well the RDT has the highest concentration of PhDs in the country, but it didn't act as counter weight to the stupid gripping the rest of the state.

Comment by Mondobubba on 07/24/2013 14:58:45
Raine,

You did mention that Detroit is like 80% black, yes?

Comment by Mondobubba on 07/24/2013 15:00:09
Quote by Raine:
Because Mayor MaryLouWho is just like him?





Too bad these yahoos haven't gotten the message that they can't nullify federal law. That has been settled since the 1840s.

Comment by Raine on 07/24/2013 15:01:00
Quote by Mondobubba:
Raine,

You did mention that Detroit is like 80% black, yes?
That's common knowledge. did you see the massive semi blog I put down at 10:02? I;m still trying to figure out how to combine this blog repost with this information.


Comment by Raine on 07/24/2013 15:03:24
Quote by Mondobubba:
Quote by TriSec:
I can work from home too, although I rarely do.

I'm fortunate that what I do in healthcare is a finite resource - there's actually very few of us out there that truly understand the ANSI 5010 format for claims and all the associated workflows.

With ICD-10 in the offing, I'm back in high demand; my inbox and my cellphone have been ringing with many contract offers.

(If I ever left ol' New England, I'd head for North Carolina. I really can't say why. Although I have had some nibbles from the left coast.)



North Carolina??? The newest bastion of stupid? Well the RDT has the highest concentration of PhDs in the country, but it didn't act as counter weight to the stupid gripping the rest of the state.
What's happening in NC is another very calculated thing. Does the name Art Pope ring a bell?


Comment by Raine on 07/24/2013 15:04:16
Quote by Raine:
See?

Nearly half of the adult population is functionally illiterate. Detroit fails to protect its citizens and their property rights. It was recently ranked the second most dangerous city in America, behind only Flint. No one says they wish to move to Detroit to send their kids to Detroit Public Schools.

Detroit has too much land area and infrastructure for its current population of 700,000. The city had about 1.9 million in 1950 and it no longer makes sense to have the geographic boundaries it once had.

The time has come to think outside the bun.

Suppose that portions of Detroit were simply sold to private developers to create private cities.


And then there is this:
Well, in this case we're talking about a black city, a black city that's had a black political establishment. And this is now being directed--many people believe that because it has been framed in a racist manner, that somehow the city of Detroit had this coming for the mismanagement and corruption and so on.

Well, the underlying causes have really very little to do with corruption. Perhaps what was happening is that during corrupt practices of the prior mayor, for example, they were not looking at what was happening to the debt that was being accumulated with the banks, and the banks were very happy to do this. So I think the racism in it is that the city of Detroit and the residents are being blamed for a crisis that was generated by the banks.
They have redlined Detroit over decades (it's not just white flight and it's not just the suburbanization af the area after the highways system was built.) Banks redlined this city for the pleasure of the rich to come in an privatize it.

And as far as city workers and retiree's, they have reason to be afraid.
The average annual pension payment for Detroit municipal retirees is about $19,000. Retired police officers and firefighters receive an average of $30,500. Top executives and chiefs can receive $100,000.

Police and firefighters don’t pay into the Social Security system, so they don’t receive Social Security benefits upon retiring.
They are facing a very real possibility of losing their retirements. Why is that? The pension plan predates the Social Security Act of 1935.

More details:
Approximately one-fourth of employees of state and local government do not participate in Social Security. This includes most to substantially all public employees in Alaska, Colorado, Louisiana, Maine, Massachusetts, Nevada, and Ohio.

In addition, approximately two-thirds of public safety officers--firefighters and police officers--do not participate in Social Security. These workers are in the seven states listed above and many other states.

An estimated one-half of public school teachers do not participate in Social Security, including a majority to substantially all in California, Connecticut, Illinois, Kentucky, Missouri, and Texas.

Also, more than one-fourth, but less than one-half of public school teachers in Georgia and Rhode Island also do not participate in Social Security.


here is why:
Both employers and employees who do not participate in Social Security do not pay the Social Security portion of the FICA tax, (6.2 percent of payroll each). Public pension benefits for non-Social Security-eligible employees usually are higher than those of other public employees, to compensate for the absence of Social Security benefits.

Non-participation in Social Security dates to the origins of the Old Age, Survivors, and Disability Insurance program in 1935, when coverage was limited to private sector workers due to constitutional concerns regarding the authority of the federal government to impose taxes on states and political subdivisions (see Section 218 agreements, below). These concerns were addressed in Social Security Amendments of 1950.



Comment by wickedpam on 07/24/2013 15:28:42
OMG So Creepy!!!!!!!


Fetus Toys

Comment by Mondobubba on 07/24/2013 15:43:54
Quote by Raine:
Quote by Mondobubba:
Raine,

You did mention that Detroit is like 80% black, yes?
That's common knowledge. did you see the massive semi blog I put down at 10:02? I;m still trying to figure out how to combine this blog repost with this information.



Because of your info dump, plus all the stuff I've been reading some of the details get blurred.

Comment by Mondobubba on 07/24/2013 15:45:12
Quote by wickedpam:
OMG So Creepy!!!!!!!


Fetus Toys



Creepy on many, many levels too.

Comment by Mondobubba on 07/24/2013 15:55:14
Comment by TriSec on 07/24/2013 16:02:25
This is not directed at Mr. Weiner. (OK, maybe it is.)

How come no spouse of any politician in a sex scandal ever has come out and said,

"Yeah, he's a disgusting, cheating, SOB and I hope he gets everything he deserves. He wrecked our marriage and destroyed our family, and you seriously think he'll do something different if you elect him? Thank God it was only another woman; what's next, little boys in his office? You should all learn from what happened to me; I will never forgive him for what he did, and you shouldn't either. If he lies to his spouse, imagine what he's telling you."


Comment by TriSec on 07/24/2013 16:05:01



Best answer: "Not Boston."



Comment by Mondobubba on 07/24/2013 16:06:54
Quote by TriSec:



Best answer: "Not Boston."




<----carrot bits

I'd love to see this, but to Dunkie's locations. Boston would be a giant red glob.

Comment by BobR on 07/24/2013 16:07:40
Quote by Mondobubba:
Quote by wickedpam:
OMG So Creepy!!!!!!!


Fetus Toys

Creepy on many, many levels too.

I would be SO tempted to buy one then drop it on the ground and stomp on it right in front of them

Comment by TriSec on 07/24/2013 16:08:10
Comment by Mondobubba on 07/24/2013 16:08:21
Quote by TriSec:
This is not directed at Mr. Weiner. (OK, maybe it is.)

How come no spouse of any politician in a sex scandal ever has come out and said,

"Yeah, he's a disgusting, cheating, SOB and I hope he gets everything he deserves. He wrecked our marriage and destroyed our family, and you seriously think he'll do something different if you elect him? Thank God it was only another woman; what's next, little boys in his office? You should all learn from what happened to me; I will never forgive him for what he did, and you shouldn't either. If he lies to his spouse, imagine what he's telling you."



Don't you mean "Carlos Danger?" Which would also make a great name for new princeling.

Comment by Mondobubba on 07/24/2013 16:09:30



That might be the saddest thing I've seen so far today.

Comment by Mondobubba on 07/24/2013 16:16:18
Another name for the royal spawn: Ali G Borat Bruno Windsor.

Comment by Raine on 07/24/2013 16:16:46
Oh.




Comment by wickedpam on 07/24/2013 16:17:54
Quote by Mondobubba:



That might be the saddest thing I've seen so far today.


eep! That's very Final Destination-y


Comment by Mondobubba on 07/24/2013 16:20:29
Comment by Raine on 07/24/2013 16:22:48
best thing ever for the hour is this.

(as are the xtra gifs in the comments. )

Comment by Mondobubba on 07/24/2013 16:23:22
Comment by wickedpam on 07/24/2013 16:29:48
Quote by Raine:
best thing ever for the hour is this.

(as are the xtra gifs in the comments. )



love her!


Comment by wickedpam on 07/24/2013 16:33:09
Quote by Mondobubba:
Get your own "Carlos Danger" style sexting name.

Mine is Juan Death.


Anibal Peril or Fabricio Distress depending on which name I use

Comment by TriSec on 07/24/2013 16:41:05
Hi everyone.

"Dario Stealth" at your service.



Comment by livingonli on 07/24/2013 17:20:48
Good day, folks. Still taking forever to wake up.

Comment by Will in Chicago on 07/24/2013 17:30:06
Raine, I fear that your blog was prophetic and little has changed.

While looking up other things, I found an interesting article on the human brain.

Comment by Raine on 07/24/2013 17:33:05
George Alexander Lewis <--

I know that you are all disappointed at the name.

Comment by Scoopster on 07/24/2013 17:33:54
Dario Peril here - I'm up all night to get sexty!

Comment by BobR on 07/24/2013 18:05:04
Quote by wickedpam:
Quote by Mondobubba:
Get your own "Carlos Danger" style sexting name.

Mine is Juan Death.

Anibal Peril or Fabricio Distress depending on which name I use

Raphael Stealth