The Great American Pixel


No Property Left Behind (Update In Progress)

What to do with a property like this? No one bought this 2 acre property in Detroit when it was first auctioned for $500:

In March I first wrote about an idea for a campaign called No Property Left Behind, which would crowdfund the purchase of $500 properties that go unsold at the annual Detroit/Wayne County Foreclosure Auction, and then crowdsource what to do with them.

When I was at MIT for the Knight Foundation Technology & Engagement Summit last month I got to brainstorm it with some very smart people, and in Toronto a couple weeks ago I mentioned it in my NXNE talk which got a nice little write-up in the Toronto Standard.

Long story short, there’s been a lot of enthusiasm and interest in it, and a lot of questions about how it could work. For those just tuning in, I’m going to try and do a super succinct breakdown of what we’re thinking, why, and big open questions right now, so you can understand and feedback on it, and potentially get involved in working out the kinks and making it real.


Every year Wayne County (which includes the City of Detroit) holds what I understand to be the world’s largest property auction — The Wayne County Tax Foreclosure Auction. Last year 13,050 properties in Detroit alone were auctioned online with an opening bid of $500, and a whopping 7,235 went unsold. I’m no math star, but that’s more than 1/2. The 5,815 that did sell sold for $20,580,806 to 1,132 unique bidders.

We know that because we wrote software to track the auction as it happened live on bid4assets.com. You can see an archive of the auction at http://whydontweownthis.com/rabbit including sortable lists of highest priced properties, biggest buyers, etc. 

Living in Detroit I know full well while many of these properties did not sell. Certainly incomplete awareness that the auction was even happening or how to participate in it played a role, but the truth is that a lot of these properties have buildings that need to be torn down (or at least cost a lot to fix up), have trash or contamination issues, and are generally in difficult locations (off the beaten path, surrounded by blight, perceived as dangerous, etc). In short they are difficult investments, and your $500 purchase might be a ticket to a $50,000 liability. 

Still, it doesn’t seem right to me that so much land and architecture spread all across Detroit could really be valued at $0 or worse by the market. I feel like there’s a massive failure of imagination happening and that a really hard problem like this might benefit from tilting our heads and looking at the solution space differently.

Having some experience with crowdfunding, you can’t help but add up the unsold properties and think, well, 7,235 x $500 = $3,617,500, and if someone had wanted to suddenly become the largest land owner in Detroit, that’s what it would have cost. 

$3.5 million is both a big and a small number. Many of us barely have $35 to spend right now, but if you’re a wealthy investor that number might look vanishingly small. And to a “crowd” of people from around the city, the region, the country, and the world, you could make mincemeat out of that fundraising goal if the channels for collection were clear and trustworthy. 

I’ll give you an interesting example. Last week a woman named Karen was harassed by kids on a school bus, the video went viral, and someone set up a fundraiser on IndieGoGo to buy her a vacation. With 24 days left on the crowdfunding campaign, more than *30,000* people have given her more than $655,000. To reach a $3.5 million goal in Detroit, those 30,000 people would have to give $116 each. Doable? Of course, especially when you consider the bigger fish who could step up with checks, and that the number of funders could be much higher (if you really tapped into the Detroit spirit). 

We do not live in a world of straight-forward value, so I hate to put Karen and the City of Detroit on a scale and ask which is more worthy of massive crowdfunding. However it’s an indicator to me that people can step up at higher levels to help sort out, clean up, repopulate, and reinvest in a truly great and important American city.


OK, so let’s pick our number. Let’s say that we want to raise $2.5 million, enough for 5,000 unpurchased properties, and that we hope the additional interest the campaign generates will decrease the number of properties left behind to that level or less. We create a transparent bank account (something I think is so important not just for raising the funds, but creating trust around how it’s being spent), we invite the world to put money in it, and when the auction happens we run a script that watches all the auction pages, and if there’s a minute left on something with no bids, boom, it auto-bids $500. And it does this again and again and again until all the money is gone and as many leftover properties as possible are purchased. (And if somehow there’s no room to buy leftover properties…miracle of miracles…the excess money is returned.)

Now let’s assume we’ve all just bought 5,000 Detroit properties that include vacant lots, decrepit abandoned houses that should be torn down, hulking open dangerous factory buildings, and some really nice stuff too. What do you do with all that???

The point of this all is not for the group to continue owning it, but to immediately advertise its availability with the simplest application form in the universe so that you can immediately begin receiving proposals and turning it over to people and projects. Proposals would be reviewed under guidelines that always favor the local first, and fan out from there. Depending on the property and buyer, they can be gifted or resold for $500 - $1,000, or for higher on a case by case (the proverbial Ms Jenkins can’t compete with the proverbial Acme Corp). Land contracts would come with such terms as, if you don’t pay taxes within a year and noticeably move to improve the property you lose it.

Speaking of taxes, I think the way you’d do this is to be upfront that the purchasing group *would not pay taxes*. Here’s how the ethics work out: properties at auction were not generating tax revenues to begin with, and if no one else stepped up to buy them they would continue not generating revenues. If there’s a good faith effort to find an owner who will, then the group is not being a deadbeat. The worst that can happen is that if no one steps up in 3 years time to take a property on, it recycles back to the county to be auctioned again. Yay!

The most open questions I have about the general approach include: 

Should it be done in more targeted areas?

Should it be done in something like a land trust?

How do you avoid liabilities for things like blight violations or people getting hurt on the properties?

Who sits on the board of something like this?

I’m going to come back and edit this more later, it got real long and I have to run, but wanted to get that out. Woo…

2 years ago

June 26, 2012
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