In Michigan, counties are required by law to offer tax-foreclosed property at auctions.
While this allows governments to receive immediate revenue if the property sells, it also leads to prolonged disinvestment.
Auctions have not allowed prospective bidders with long-term investment horizons to inspect properties. Purchasers deliver full payment within 24 hours at most, and they have received quit claim deeds with uncertainty about ownership of the property. Those with the financial means to accept these difficult conditions are often in the business of flipping properties, or extracting payment from renters, without making improvements.
This cycle continues until the county again takes the property for failure to pay taxes.
A land bank in Flint and a city department in Detroit have tried a different strategy: a managed sale approach.
This involves allowing planning staff more scrutiny of prospective owners and their plans for reuse.
The turn-around time is longer, but it allows interested purchasers have an opportunity to inspect the property, perfect title, and arrange financing.