U.S. This foreclosed home costs $40 in Detroit

Published on March 30th, 2009 | by Jennifer Lance

22

Greening Foreclosures: Buy a Home in Detroit for $40

This foreclosed home costs $40 in DetroitAlong with the rest of the country suffering from the mortgage crisis, Detroit has seen more than its fair share of foreclosures. Coupled with a failing American auto industry, the Motor City has been hit hard by the current recession.  The national rate for home foreclosures is one in 300, yet Detroit has the highest home foreclosure rate in the country.  Since 2000, Detroit has lost over 150,000 jobs to downsizing in the auto parts and auto industry.  Michigan also has the highest percentage of subprime mortgages in the US, and the state suffers from the highest unemployment rate in the union.

So how much does a foreclosed home in Detroit cost?  Two weeks ago, you could buy a home for $1 in the city. Today the lowest price I could find was $40.

That’s right, you can buy a bank owned home in Detroit for only $40.

Of course, homes for these low prices may have fire damage or boarded up windows, but it is still a house sitting on a lot.

Another shocking statistic from Detroit is that the average price of a home is almost equitable to a year’s worth of auto insurance.  According to the Macomb Daily:

Because the neighborhoods and housing stock in the city have deteriorated so dramatically, the median sale price for a foreclosed home in Detroit has dipped to $7,750. At the same time, auto theft, insurance fraud and vehicle burglaries are so rampant that the average car insurance policy carries a price tag of $5,072.

The city’s morale has dipped so low that only 14 percent of voters turned out for the big mayoral election in February, and two-thirds of children drop out of high school.  What could we do to boost moral in Detroit?  We could buy up foreclosed homes and lots and turn them into green urban spaces.

By turning foreclosed homes into nature preserves and parks, Detroit could undergo a green urban renewal that would mitigate environmental damage the auto industry has done and improve the health of its citizens.  Recent studies have also shown how inner city children that grow up in neighborhoods full of green spaces grow up healthier and happier:

This study’s findings align with previous research linking exposure to green landscapes with health improvements.  Among adults, greenness is associated with less stress and lower [body mass index], improved self-reported health and shorter post-operative recovery periods. Among children and youth, the positive health effects of green landscapes include improved cognitive functioning and reduced attention deficit hyperactivity disorder symptoms.

Another study has shown that crime rates go up in cities when the landscape is barren of nature.

Turning foreclosed homes into parks, wildlife sanctuaries, and urban gardens could be just what the Motor City needs to revitalize itself.  Considering the price of these foreclosed homes, it would be affordable for any grassroots organization to undertake.  I volunteer to buy a home and donate to any group willing to take on this challenge.

Image: Realtor.com




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About the Author

Jennifer lives on 160 acres off-the-grid in a home built with her own two hands (and several more skilled pairs of hands) from forest fire salvaged timber. Her home is powered by a micro-hydro turbine, and she has been a vegetarian for 21 years. Jennifer graduated from Humboldt State University with a degree in art education and has been teaching art to children for over 16 years. She also spent five years teaching in a one-room schoolhouse before becoming the mother of two beautiful children. Jennifer has a Master's Degree in Early Childhood Education and is currently teaching preschool, as well as k-8 art. She enjoys writing, gardening, hiking, practicing yoga, and raising four akitas. Jennifer is the founder and editor of Eco Child's Play (http://ecochildsplay.com) "I’ve always been concerned about the earth and our impact upon it. Now that I have children, I feel compelled to raise them with green values. From organic gardening to alternative energy, my family tries to leave a small carbon footprint." Please visit my other blog: http://reallynatural.com



22 Responses to Greening Foreclosures: Buy a Home in Detroit for $40

  1. i wish i understood this. id buy a house at this price for a nonprofit.

    im commenting so i can be informed if such a group forms or someone can explain whats happening better.

    sounds like a too good to be true bargain. ;)

  2. TT says:

    It cost money to have the home demolished, my guess would be $3-5000. Then is is succeptable to having trash dumped on it for which you would be responsible to clean up. Then if some kid builds a scateboard ramp and gets hurt, or cooks meth, you are responsible for creating a constructive nuisance and clean up.

  3. Desoto says:

    Very kind of you Jennifer to offer $40.00 to purchase a house. Would you please donate the $8,000.00 necessary to demolish the house.

  4. Yes, demolition costs would be large, but my point was to think of the possibilities for green urban renewal.

  5. I love that idea of taking foreclosed homes, buying the property, and converting it to vegetable gardens and other green spaces. The improvement in physical health, the enjoyment and mental health of growing something good to eat and beautiful to see, would be welcomed by me in New York City… but that is not happening yet here in NYC. Maybe Detroit could get lucky for once and lead a new trend.

  6. klio says:

    Not that I am against more green space- but something to think about when tearing down buildings is the loss of historic value. It would be a shame to loose structures with unique architecture simply because for a brief moment the city fell on hard times… I don't know if Detroit can afford to loose all of its soul in some reinvention.

  7. Birte says:

    If the picture accompanying the article has anything to do with the kind of houses that can be bought for $40, nothing much is lost.

    Plots in this type of neighborhoods may not be that suitable for parks, but could be great as a place to grow organic vegetables. Doing that could pay for the demolition costs and at the same time create new jobs for some of the many unemployed.

    Using an opportunity like this and applying some "outside the box" thinking could bring up great new solutions.

  8. Jonha says:

    So you will buy a house and grow trees? Will you then pay the yearly property tax that is a ransom paid to the government so that your property won't be seized?

    Will you defend yourself in court 10 times per year when you are sued because someone tripped and fell on your property?

    $40 = $250,000.

  9. hermitofm says:

    Hmmmmm

    And here I was thinking,,,,,, Thieves sucked the life out of a lot of people,,, took their homes away from them,,,, for want of $40.00 Humanity at it's finest

  10. great says:

    Exactly! Humanity at its finest and even the worst. You should guys continue blogging and fight against recession

  11. hermitofm says:

    Was never my intention to kill this discussion. I had followed a series of links on Cap and Trade and Carbon Credits, ( which I personally feel is a big scam which generates monies for those holding the ''Credits'' and allows big corporations to pollute more by buying the ability to do so ) I read the article and responses and made mine before reading what the site was all about. People should really take the time to understand the motivation behind and the long term effects of any proposal touted as good for the environment, and ( In the best interest of the people )

  12. notaresidentofdetroi says:

    The best interest of those people who live there – that is key. Who are we to decide what someone else's city looks like? To buy a house for $1 and turn it into a park? It's one thing if the house is burned down or destroyed already. Putting a garden there would be a gift. But a house where someone could live? That is not an opportunity – that is a tragedy. What that means is that someone used to live there and then lost the entire value of the property. Where is that person living now? If it were only possible to pay the dollar and give the house back to its owner.

  13. Pingback: Wind Energy Industry Brings Badly Needed Jobs to Detroit : CleanTechnica

  14. hermitofm says:

    First to '' Wind Energy blah blah blah '' While I'm all for finding alternate energy sources that work, I'm afraid what we will be seeing soon is everyone and their brother jumping on the ''green '' bandwagon due to the potential money to be made. Tax incentives, Govt. funded projects, stimulus money.

    Second to ''Real estate complaints '' While there are many hard working citizens scrambling to make ends meet, the people like ''John'' in your link, in part caused some of the problems we're facing today. Money flowing like wine. Profit through the roof. He signed a contract to purchase a condo with the only intention to make a quick buck. Oh well, I can't say I have any sympathy for him or any other who played this game and lost. I do however feel for those who got conned into buying beyond their means, as this should never had been allowed and those involved should be held responsible.

  15. Aximilation says:

    Nice read, I would love to be a part of something like this. I agree, demolition would be an issue to deal with, but is it enough to be an unbeatable obstacle?

    Here's what I would do if I lived in the area:

    1. Rally support, put out cheap publications to draw some attention.

    2. Form a volunteer workforce of the unemployed.

    3. Demolish, renovate, build, and make property self-sustaining.

    4. Repay the volunteers with food/(whatever produced) from the properties worked on, in relation to the labor given.

    5. Turn a portion of the returns into a means to renovate more properties.

    Someone want to take the idea and run?

  16. hermitofm says:

    Aximilation, What?

    2. Form a volunteer workforce of the unemployed?

    4. Repay the volunteers with food/(whatever produced) from the properties worked on, in relation to the labor given?

    You work for the Govt.?

    What your suggesting is slave labour in return for food from the very people who have lost their jobs and homes. Adding insult to injury, let's beat them into submission.

    The majority of the people don't want handouts either, they want jobs and a decent life for themselves and their families.

    Back on topic : Let's say a home is cleared for,ahem,farming / gardening. It wouldn't produce enough for one family for a year. But it would get labeled organic which means overpriced, in which case the average person would not buy it anyways because they know they couldn't afford to keep feeding their families if they did. So who really benefits from this waste of time and taxpayer money. And it would come up, some kind of govt/state money help maintain the park/garden.

    Stuff & Nonsense………………………….

  17. Pingback: Wind Industry Capitalizes on Michigan Tax Credits to Create New Jobs | ecopolitology

  18. Josh Kercher says:

    There are so many good points made by both sides (of the argument) here. I’m a SE Michigan native and I’m half ashamed of the current state of Detroit, however, still half proud of the history that remains intact…

    There is no QUICK FIX for Detroit but it COULD be considered one of the great US cities again if a few things happen. Utilizing current tax incentives and govt programs is a must here but you cannot completely rely on the city/govt to pay for this. A few of my own ideas include the following:

    1. I think demo’ing large areas that are to be restructured into green space IS what needs to happen. I like the idea of growing vegetables here or there but its not a solution to anything…just a good idea. Parks are the best idea (but they need to be controlled – keep the meth heads out). This is further supported by the point that crime rates tend to be slightly lower when these are present…

    2. Volunteers will definitely be needed and hopefully they can be rallied to help by strong leadership (this has been missing for years). If it is still in place; the volunteers can take advantage of the govt incentive that allows volunteers to get education credits.

    3. Coming off the back of the last point, we will need to further develop our current higher education programs as well as add some vocational schools if possible. (I think that if the city can make some moves in the right direction, such as leading a green movement, and improve their education system than we can bring in some new companies that want in on the change and the state incentives).

    4. Again off of the last point, getting new industry into Detroit will be a huge part of fixing things.

    5. As for the previous argument made about losing potential homes in a highly populated city…I think we should just do what some asian developers have be doing for years…keep your green space to promote community wellfare and build UP on small footprints. There is no reason that we can work with developers to create multi=story affordable housing developments that would allow us to keep the parks AND keep affordable housing that is even easier to maintain because of its location. Again, the govt incentives would apply here as well. This is long overdue in many cities across the country and is being done in more progressive cities.

    These are the main points of ideas that I’ve had brewing for a while now…

    Something else that some people might think IS NOT a good idea but makes sense to me is to get a stronger military recruiting effort in urban areas like Detroit. If you think about it, there would be many people (if they qualify) that could support our country while also getting an education paid for and getting PAID. After serving their term they would come back and not only be better suited to contribute with an education but they would also have some money that they can live with and put back into the economy. If I was without a job (which means I’m not paying any taxes) not able to afford healthcare (by the way I’m not in favor of making it free) and getting to the point where I’m doing less than honorable activities to get by than the military would be looking pretty good to me (if someone presented it in the right way).

    I kind of wish I would have done more research and posted supporting links and documents to my points but I did this at my lunch. I’d love to hear from anyone who has further ideas on the subject…

    -Josh

  19. rick jones says:

    I wish that people would do what they say they will, Instead of pointing out what a good price it is. The old saying goes he who knows the price of everything knows the worth of nothing. Most of those houses were built full of asbestos and painted with lead paint. Add leaky windows and no insulation and energy bills add up. Detroit taxes are too high and insurance is red-lined by the underwriters. With so much vacant land permaculture would be easy, If you didn't have to worry about getting mugged while you are planting trees.

  20. Amanda says:

    First of all it is heartbreaking to see what has happened to Detroit. We own 4 investment properties, beautiful homes that we bought in forclosure and fixed up in 2006, which are now sitting in ruins. I agree that the taxes are WAY too high and out of proportion in Detroit. I never understood why the taxes on a property that was worth 10% of my home in Miami, were the same as those on my home in Miami. In addition all the Detroit municipal utlitites are a mess. We have been having an ongoing charade played out with Detroit Water to get them to shut off the water because we have squatters in one of our properties and they keep shutting it off and then the squatter just goes back and siphons off more water (and we keep getting an insane bill). It is just a nightmare.

    I do think the only solution is to make these properties into green spaces, but if anyone is thinking about paying $40 for a house in Detroit you'd better do yourself a favor and understand how the taxes are going to be written of (because they can amount to over $10,000 if a couple of years are owing)

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