2,400 Former Detroit Homeowners Might Be Able to Recover a Total of $20M in Tax Foreclosure Profits

A map to help former Detroit homeowners potentially recover some of what they lost to tax foreclosure in 2015 - 2019 auctions

A screenshot of the Windfall Profit Dashboard

Around 2,400 former Detroit homeowners who lost their homes in tax foreclosure auctions between 2015 and 2019 may have an opportunity to recover a total of $20M in “windfall profits” — an average of $8,300 per former homeowner — as a result of the Michigan Supreme Court’s ruling in Schaefer v. Kent County earlier this year.

My analysis, using Regrid’s Wayne County tax foreclosure auction data and Detroit assessment records from 2015 - 2019¹, identified homes that sold in the 2015 - 2019 tax auctions for more than the tax debt owed² and appeared to be owner occupied at the time. These sales generated so-called “windfall profits” that could be reclaimed by former property owners due to the court’s decision.

To help affected homeowners determine if they may be able to recover windfall profits, I’ve created a map and dashboard (click the button below to open) showing the ~2,400 homes and the estimated amount each former homeowner could reclaim through the Wayne County Treasurer’s retroactive claim process.

Though tens of thousands of Detroit homeowners lost their homes to tax foreclosure in the 2000s and 2010s, most sold for less than the tax debt owed or didn’t sell at all, meaning no windfall profits were generated. Michigan’s statute of limitations also limits retroactive claims to the 2015 auction and later.

Between 2015 and 2019, more than 11,000 Detroit homeowners lost their homes to tax foreclosure, but only about 2,400 (22%) appeared to sell for more than the debt owed, meaning they may be eligible for claims.

Those who lost their homes to tax foreclosure likely don’t know whether their property sold at auction for more than the tax debt owed. This tool provides information that can help former homeowners determine if they may be able to recover any windfall profits. However, this dashboard cannot guarantee the recovery of windfall profits: Ultimately, only the Wayne County Treasurer can notify former homeowners who file a Notice of Intent form if there are proceeds to claim from the sale of their property and the exact amount.

I opposed the legal challenges to the tax foreclosure process which led to the decision allowing retroactive claims. As I wrote extensively here in The Chargeback, in the Detroit Free Press, and the Brennan State Court Report, these legal challenges did not address the actual source of profit in the tax foreclosure system, and the retroactive claims process will benefit speculators and landlords far more than former homeowners. Nonetheless, given the court ruled the way they did, I want to do what I can to help former Detroit homeowners recover what money they can.

What’s in this Piece:

1. How to Use the Windfall Profit Dashboard

A walkthrough of the Windfall Profit dashboard and how I think this data will be most productively put to use

2. The Retroactive Claim Process with the Wayne County Treasurer’s Office

Steps on filing a retroactive claim with the Wayne County Treasurer’s Office.

Critical Note: The Notice of Intent to claim windfall profits form, which is the first step in the process, must be filed with the Wayne County Treasurer by March 31, 2025. More details on this process are below, but I wanted that deadline mentioned up front.

3. Limitations on the Data and Dashboard

Defining what this data & dashboard can and can’t do, and where there are limitations in the data

4. Can Former Homeowners be “Made Whole” by Recovering Windfall Profits?

Exploring whether former homeowners can actually recover the value of the homes they lost by claiming windfall profits

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1. How to Use the Windfall Profit Dashboard

A. Search for a Property

You can search for an address using the search bar in the map. The map will zoom to that address. (You can also just navigate around the map and zoom in / out as with any other online map.)

Each blue circle on the map represents an owner occupied home that was tax foreclosed and generated windfall profits at auction. The larger the circle, the more money the property generated in windfall profits.

Click on the property to pull up its windfall profit details:

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B. Details Provided for Homes with Windfall Profits

The box that pops up with a property’s details and windfall profit information contains several pieces of information, some of which are highlighted in the orange box below:

1. Status: This shows whether the home was Likely or Possibly a homeowner.

   1. “Likely Homeowners” are properties that had a 100 Principal Residence Exemption (PRE) and were owned by an individual (not an LLC or business entity) in the year the tax foreclosure took place.

   2. “Possible Homeowners” are homes that did NOT have a PRE but were owned by an individual AND the property tax bill was mailed to the address of the home (not a separate address like a property management company). This doesn’t necessarily indicate an owner occupied home, but it may.

2. Street Address: The address of the tax foreclosed home.

3. Parcel ID: The unique parcel ID for the tax foreclosed home.

4. Tax Auction Year: The year in which the home was tax foreclosed and auctioned off.

5. Windfall Profit: The potential amount of windfall profit that could be claimed by the former owner, determined by subtracting the total tax debt, interest, penalties, and fees owed from the auction sale price (per Regrid tax auction data).

   1. Note: There are cases where the sale price at auction may differ from the actual price paid. This can happen when a bidder “falls through” and doesn’t pay the winning bid amount and the Treasurer needs to move to the next highest bid. Thus, these “Windfall Profit” amounts may not be exact.

6. Minimum Bid: The price for the home in the first round of the auction, which reflects total tax debt, interest, penalties, and fees.

7. Auction Sale Price: The winning bid amount at auction, per Regrid tax foreclosure auction data.

8. Approx Present Day Value: The approximate present day value of the tax foreclosed home.³

9. Windfall vs Present Day Value Gap: The gap between the windfall profits that could be claimed and the present day value of the home that was lost. I have included this to drive home the point that recovering windfall profits will not compensate former homeowners for the value of what they lost.

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C. Blue vs. Gray Circles on the Map

As mentioned above, blue circles on the map represent an owner occupied home that was tax foreclosed and generated windfall profits at auction. The larger the circle, the more money the property generated in windfall profits.

Gray circles on the map represent owner occupied homes that were tax foreclosed between 2015 - 2019 but did not generate any windfall profits at auction, meaning no money can be recovered by the former owner today.

I have included those homes tax foreclosed from 2015 - 2019 that did not generate any windfall profit because I do not want to lose the context in which these windfall profits exist:

They may be helpful to some former homeowners, and that’s a good thing, but the vast majority of former homeowners will see nothing at all from the outcome of these legal decisions.

Properties that generated windfall profits vs. those that did not

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D. Why There Are No Owner Names in the Dashboard

Since the former homeowners who can claim these windfall profits were tax foreclosed, it is almost certain they no longer live at the addresses on this map. That means the name of the owner at the time of foreclosure is the best hope of finding the former homeowner.

For the moment, however, I am not including those names in the public dashboard I’ve put together because I’m concerned attorneys may use it to try to track down former homeowners in the hopes of collecting a percentage of what they are owed.

For former homeowners who may use this dashboard, they likely don’t need the owner name — they will know their home by its address.

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E. How to Find Former Homeowners

I’ve shared the data behind this map with several housing counseling organizations. For those organizations I’ve included owner names in the data I’ve provided.

Some former homeowners may find and use this dashboard, but the far more likely way I think former homeowners will be found is via housing counseling agencies and other governmental or nonprofit organizations who have large rosters of clients & resident contacts.

Those groups can use the owner names at the time of foreclosure that I’ve provided and run them against their client / contact lists to see if there might be any matches, and then reach out to those clients with whom they likely already have a relationship.

It’s also worth mentioning that there is of course no guarantee all of these former homeowners are still in Detroit — I expect finding the people owed this money will be very difficult.

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2. How to File a Retroactive Claim for Windfall Profits with the Wayne County Treasurer’s Office

Below is the process on how to file a retroactive claim, which was shared by the Wayne County Treasurer’s Office.

Need Help? You can call the United Community Housing Coalition’s Tax Hotline at 313-725-4560 if you are a former homeowner who needs help with this process.

Step 1:
Download and complete the Notice of Intent form.

Step 2:
Ensure the form is notarized before submission. Notarization is required for all claimants.

Step 3:
Deliver the completed and notarized form to the Wayne County Treasurer’s Office by March 31, 2025. You have two delivery options:

• In person at:
  Wayne County Treasurer’s Office
  400 Monroe, Suite 500
  Detroit, MI 48226

• By certified mail (return receipt requested) to the same address.

Step 4:
Wait for notification. By July 1, 2025, the Wayne County Treasurer’s Office will send a certified notice (return receipt requested) to all claimants who submitted the Notice of Intent form. This will inform you if there are any remaining proceeds from the sale of your property.

Step 5:
If you are notified of remaining proceeds, file a certified motion with the Wayne County Circuit Court by October 1, 2025, the same court in which the foreclosure judgment was entered. This is required to claim your proceeds.

IMPORTANT NOTE: This step may change. Right now, the expectation is that the person seeking windfall profits must file a motion with the Wayne County Circuit Court after receiving confirmation of windfall profits from the sale of your home. That, of course, would be cumbersome for any individual and require assistance from a housing counseling agency. My understanding is that the Wayne County Treasurer’s office is working on making this, also, a form that would need to be completed instead of a filed motion. There may be more updates on this step in the coming months.

Step 6:
The Treasurer will file a proof of service of the notice with the circuit court and respond to the claimant’s motion.

Step 7:
The court will set a hearing date for your motion.

Step 8:
The Treasurer has 21 days after an order from the court to pay the claimants or any other parties (such as lien holders) who have priority over the claimants.

3. Limitations on the Data and Dashboard

There are a number of limitations that should be listed here. This dashboard can in no way guarantee the recovery of windfall profits. Some important limitations to keep in mind are below:

1. The Accuracy of City of Detroit PRE Data: This dashboard relies in part on the presence of a PRE (Principal Residence Exemption) which typically denotes an owner occupied home. Prior to the citywide reassessment in 2017, however, PRE data was often unreliable. I have tried to moderate that by also eliminating properties that had PREs but were owned by LLCs or other corporations (not uncommon prior to 2017) but still the PRE data has limitations.

2. Limitations on Owner Names: Another factor used in this analysis is an approximation of the owner name at the time of tax foreclosure. I am using City of Detroit assessment data to derive owner names from the year in which the tax foreclosure took place. There’s no guarantee that the owner name in the Assessment Data was necessarily the owner at the moment of tax foreclosure — homes are bought and sold, of course, and assessment data may not keep up with changes in ownership.

3. Complications Due to Mortgage Foreclosures: Oftentimes in cities like Detroit, when a bank foreclosed on a home for nonpayment of a mortgage, banks would not put the home into the bank’s name. It’s entirely possible that some of these homes had mortgage foreclosures that preceded the tax foreclosure and, at the time of tax foreclosure, it was actually a bank that was the legal owner, not the former homeowner. Without digging through deed records, there’s no way to see that, however.

4. Accuracy of Auction Sale Prices: The windfall profits shown in this dashboard are calculated by subtracting the tax debt owed (including interest, penalties, and fees) from the auction sale price. The auction data comes from Regrid’s monitoring of tax foreclosure auctions. However, an issue can arise when a winning bidder fails to make payment, which happens after the auction ends and is not observable by Regrid. In those cases, the treasurer moves to the next highest bidder. As a result, the final sale price may be lower than the original winning bid, meaning the windfall profits reported here could be overstated in some cases.

5. Data Limited to Detroit: Finally, I want to note that I only have sufficient data to conduct this analysis in Detroit. The Michigan Supreme Court’s ruling, however, of course applies across the state. Though I don’t know how many homeowners across Michigan lost their homes to tax foreclosure from 2015 - 2019 and saw them generate windfall profits at auction, I imagine it’s at least as many as there were in Detroit. Unfortunately I can’t identify those properties without quite a bit more data which is unlikely to be easy to come by.

4. Can Former Homeowners be “Made Whole” by Recovering Windfall Profits?

Even for those who can recover windfall profits, the amount — while helpful — pales in comparison to the current value of what was lost. I didn’t want this dashboard to simply declare “Former Homeowners Can Get $20M!” and create the illusion that it would solve everything.

To keep this in perspective, the dashboard includes three tallies (highlighted in orange in the screenshot below) that update as you explore the map:

• Total Auction Profits to Reclaim: This reflects the total windfall profits that could be reclaimed.

  • Citywide, that amounts to $20M.

• Present Day Value of Homes Lost: A rough estimate (likely conservative — arrived at via 2024 State Equalized Value x 2) of the present-day value of homes lost to foreclosure that generated windfall profits.

  • Citywide, this totals $120M.

• Gap Between Auction Profits and Home Values: The difference between the present day value of homes lost and windfall profits that could now be claimed.

  • Citywide, this gap is -$100M.

While the retroactive claims process offers some compensation, it falls far short of making former homeowners “whole”.

1. Provided by the City of Detroit Treasurer’s Office

2. Including interest, penalties, and fees

3. “Present day value” is defined as 2024 City of Detroit assessed value x 2. Per Michigan’s state constitution, assessed value cannot exceed 50% of market value. Thus the assessed value x 2 provides a rough (and likely underestimated) approximation of present day market value. All homes owned by government entities (eg Detroit Land Bank) in 2024 are zeroed out in this calculation.

Zooming In On Detroit's Sweat Equity

Exploring the success of five years of housing rehab in Detroit's Midwest neighborhood

One of the 100+ homes in Midwest Detroit that have been rehabbed since the pandemic

The City of Detroit recently touted that $1B had been invested in affordable housing over the last five years generating 4,600 affordable housing units, and that another $1B would be needed over the next five years. As I detailed in a recent post, a Detroiter-led wave of vacant home rehabs that exploded amidst the pandemic is far outpacing those City figures: 17,000 Detroit homes that were vacant just before the pandemic are today re-occupied and, many, substantially rehabbed. (I’d guess their per unit costs are quite a bit lower, too.)

If we actually want housing that is affordable then the next $1B the City wants to invest should be invested in the Detroiters leading the way on the rehab of Detroit’s vacant housing stock.

Here, I want to discuss one particular neighborhood whose housing fate has turned on a dime since 2020, seemingly thanks to the efforts of one of Detroit’s immigrant enclaves. The area is found in the western corner of Detroit’s Midwest neighborhood, bounded by Tireman to the north, Livernois to the east, West Warren to the south, and the Joe Louis Greenway/Dearborn border to the west.

This portion of Midwest caught my attention while researching re-occupied homes due to the density of homes re-occupied since 2019 and because it sits directly on top of the greater Chadsey Condon neighborhood that was explored in depth in Global Detroit’s excellent 2021 report on the impacts of Detroit’s immigrant communities, Building Inclusive Cities: Immigration and Neighborhood Change in Detroit.

If you look at the heat map of re-occupied homes (you can explore in greater detail here) you’ll notice there are almost no re-occupied homes since 2019 below the Midwest area of detail called out above. That’s because nearly everything to the south has already been rehabbed in those immigrant enclave neighborhoods. The Global Detroit report found that 80% of homes in the Chadsey Condon neighborhood were in Good or Excellent condition (60% and 20%, respectively) as of 2019¹. I have no doubt those numbers have only improved in the last five years.

The incredible work and success of those immigrant communities now appears to have spilled north, across Warren Avenue, into this corner of the Midwest neighborhood.

Here are a few examples of the recent progress in Midwest:

In an attempt to capture and convey just how impressive the progress in Midwest is, I worked with a friend — Google Street View expert and Geoguessr streamer, Michael Hudson — to survey the condition of all ~1,000 homes in Midwest via the City of Detroit’s street view imagery published on Mapillary, and Google Street View.

Detroit’s street view program has collected citywide imagery each year since 2020, so we were able to capture the conditions in Midwest just prior to the pandemic (in 2019 via Google Street View) and then look for change each year from 2020 through August of 2024 via Mapillary (when the most recent imagery of Detroit was captured). This allowed us to not only capture changes from before the pandemic to today, but also to get a sense of the pace of change between 2019 and 2024.

Here’s what we found.

125 Homes Re-Occupied Since 2019 in Midwest

Homes that were vacant as of 2019 and are now re-occupied as of August 2024

To highlight the transformation in this part of the Midwest neighborhood over the past five years, consider these findings from our research:

• A Surge in Re-Occupied Homes: Over the past five years, 125 homes in the Midwest neighborhood have been re-occupied, increasing the number of occupied homes in the area by 22%. An additional 75–80 homes have undergone substantial rehab, though they remained occupied throughout the last five years.

• Vacancy Drops Dramatically: The number of vacant homes in the neighborhood has fallen by 70%—from 395 vacant homes in January 2020 to 121 as of August 2024—through a combination of rehabs and (likely overzealous) demolitions.

• Local Ownership Dominates: Looking at the ownership of re-occupied homes, only 16 out of 125 (13%) are owned by entities outside Detroit based on 2024 tax bill mailing address data. The rehab activity here appears to be very much a Detroiter-led phenomenon.

• Immigrant Enclaves Lead the Way: Among those homes owned outside the city, the majority appear to be owned by residents of Hamtramck or Dearborn, both immigrant enclaves themselves. The re-occupied homes in Midwest owned in Detroit but outside the neighborhood largely have their tax bills mailed to addresses in Chadsey Condon, Springwells Village, or Davison—again, all immigrant enclaves. This pattern reinforces my sense that the revitalization in this neighborhood is driven by immigrant-led efforts.

• Detroit Land Bank as a Key Source of Inventory: Much of the inventory for rehab here seems to have been supplied by Detroit Land Bank sales: 77 of 125 re-occupied homes were owned by the DLBA circa 2019. These homes are much cheaper and more accessible than those held by private actors, especially those who may want to charge higher prices as they see increased investment in the neighborhood around their speculatively held properties.

• Two-Family Homes Throughout the Area: At least 30 of the rehabbed homes in the area appear to be two-family homes. Structure data doesn’t always capture two-family vs. single family usage in Detroit accurately, so it’s hard to tell just how many two-family flats are amongst the rehabs, but it’s likely the 125 re-occupied structures represent something more like 150 housing units.

Pace of Change Since 2019

Based on Mapillary imagery, we also attempted to identify the year, between 2020 and 2024, that vacant homes first appeared to have been re-occupied. We found it was really only in 2022 that rehabs in this corner of Midwest started to take off:

As of August 2024, the last time imagery in the neighborhood was collected, five more homes appeared to have been re-occupied and another 16 were under active rehab.

If there is a recent drop off in rehab activity I doubt it is due to waning interest in the neighborhood. Instead, it could be an indication that the supply of homes that can be rehabbed is nearing exhaustion — only 20-25 Detroit Land Bank-owned homes remain in the neighborhood.

How Did This Turnaround Happen?

While I can provide insight into what has been happening in the Midwest neighborhood, I'm no expert on how the immigrant communities active in this region are achieving these outcomes. I haven't conducted interviews with residents, and I don't want to speculate.

However, the 2021 Global Detroit report I mentioned earlier, Building Inclusive Cities, offers valuable insights into home rehab activity in the Chadsey Condon neighborhood which is directly south of the Midwest area I’m discussing here. I suspect the findings from Chadsey Condon are useful in Midwest, too, given the proximity and overlap in property ownership between the two neighborhoods.

I want to share an excerpt from Building Inclusive Cities about home rehab in Chadsey Condon, and encourage you to explore the full report here (the excerpt below is found on page 53):

IMMIGRANTS OFTEN USE SWEAT EQUITY AS WELL AS FAMILY AND COMMUNITY NETWORKS TO REHABILITATE AND REPAIR THEIR HOMES.

Family and community networks assisted the Chadsey Condon homeowners not only to purchase their homes, but to rehabilitate and repair them after purchase. In 2018 Global Detroit and the Detroit Hispanic Development Corporation conducted a focus group with 16 vacant house purchasers that the two organizations had assisted. Focus group participants were at different stages of rehabbing their homes. The homeowners stressed that they kept rehab costs affordable by doing the work themselves and by acquiring information, skills and tools from neighbors, friends and family.

One participant described how the “Cuban community” had made the necessary rehab repairs for her home. This community, as she described it, which was spread across the Detroit metro area, contained many skilled tradespeople and they looked out for each other. Cuban community members performed free labor on her home and/or traded for their services. A Dominican respondent described how a fellow Dominican had installed a furnace in his home and allowed him to repay over time without interest. Bangladeshi focus group members described the existence of a network of contractors within the Bangladeshi community who could be trusted to help with repairs.

While there are many success stories, immigrants also report serious challenges, particularly with the rehabilitation process. New homebuyers often lack information about the ins and outs of rehabilitation, particularly how to meet City of Detroit requirements. Many expressed concerns with Detroit Land Bank Authority policies requiring them to bring homes they had purchased from the Land Bank up to code within a year, particularly as long winters and freezing temperatures prevented them from doing the work themselves. Finally, focus group members, many without strong English language skills, found the city inspection process confusing to navigate and had no access to either translation or interpretation services. Many hoped to build stronger relationships with city inspectors to improve their understanding of code requirements and the permitting process.

Despite facing significant challenges—including language barriers, complex city regulations, and limited access to resources—these communities are succeeding in revitalizing their neighborhoods largely through their own determination and mutual support. This progress has often been achieved not because of extensive support from the City, but in spite of governmental obstacles. The experiences of these communities highlight the impact they can have on neighborhood revitalization, and suggest that with more supportive and accessible policies and investment, even greater progress could be made.

Further, whether the people that make up these immigrant enclaves stay in Detroit or use the success of their investments as a stepping-stone to the suburbs is an open question. I’ve written about this before. Right now, it seems likely Detroit may lose many of the immigrant community members behind this grassroots home rehab phenomenon. In the words of one focus group participant in the Global Detroit report:

“There is not one of us who doesn’t think about [moving to the suburbs] all of the time.”²

Demolitions Alone Are Ineffectual and Counterproductive

Between 2014 and 2020, the City of Detroit demolished 53 homes in the Midwest neighborhood, per City of Detroit Open Data Portal records. One might expect those efforts would reduce the number of vacant homes, but counterintuitively, the number of vacant homes actually increased during this period. Why?

At least part of the explanation lies in 250 tax foreclosures of occupied homes that took place between 2014 and 2019. Many residents were likely displaced due to tax foreclosure. This influx of newly vacant homes easily outpaced any gains made through demolition.

This pattern reflects a broader issue in the city's approach to addressing vacant properties that I have pointed out and criticized for years and years now (and warned about before the demolition program even started):

Demolition on its own does little to reduce the number of vacant homes when tax foreclosure policies, amongst other systems, continue to displace residents. In fact, demolition can be counterproductive, robbing the community of housing stock that could be rehabilitated and re-occupied.

Invest in What Works

The national discourse around immigration in the United States is mired in negativity and vilification, particularly around resources and housing scarcity. So, it might be worth noticing that, at least in Detroit, immigrant communities are putting neighborhoods on their backs and rehabbing their way out of housing scarcity and doing so with scant government support.

A question I’ve gotten a few times discussing this research is whether the Midwest neighborhood’s proximity to the Joe Louis Greenway might be a factor in the decision to invest in rehab there. Without talking to the people behind these home rehabs I can’t say for certain, but I would be surprised if that factored into the decision making much. There were some vague gestures toward the potential benefits of the Greenway for housing in the 2021 framework, but nothing I’ve seen that indicated an intentional plan to facilitate or foresee the scale of revitalization we're witnessing.

Meanwhile, again returning to the Building Inclusive Cities report, portions of the community seemingly responsible for this transformation have specifically stated that they expect little from local government:

In none of our conversations, however, was local government, or any public sector entity, seen as critical to their decisions to settle in a neighborhood, stay or leave that neighborhood, or achieve success in their efforts to pursue the American Dream. Immigrant respondents were largely disconnected from government and had extremely low expectations of what government could accomplish for them.

It seems unlikely that an investment of this scale would be made based on the perception that government actions would make it worthwhile. It seems much more plausible that the neighborhoods the community were in simply became full, and more housing stock was needed. This area had it, and was right next door.

The story of the Midwest neighborhood is a testament to what can happen when communities take the lead in revitalizing their own neighborhoods. It's a model that the City should not only acknowledge but actively support. Instead of funneling another $1 billion into traditional affordable housing initiatives, it's time for Detroit to invest directly in the people who have already demonstrated their commitment and ability to rebuild their communities.

1. Building Inclusive Cities, page 29

2. Building Inclusive Cities, page 58

Detroit's Sweat Equity

Detroiters Seem to be Leading the Reclamation of Vacant Homes Since the Pandemic

Since the pandemic, the housing landscape in Detroit’s neighborhoods has quietly undergone a profound transformation.

Around 17,000 homes that were vacant as recently as 2019 are now occupied. This isn’t the normal housing churn of the 2000s or 2010s — a reshuffling of people and homes rather than a real gain — it seems, instead, to be part of a broader, sustained phenomenon that’s reshaping housing in neighborhoods across the city. It also coincides with Detroit’s first population increase in more than 60 years.

To illustrate what’s happened over the last few years, take a look at two homes on the same block, just north of Hamtramck:

The change is visually striking, but even more impressive knowing the background of the neighborhood. While Banglatown, east of Joseph Campau, has long had densely populated housing stock and significant rehab activity, the neighborhood to the west, where these homes are located, has comparably few standing structures, very high rates of tax foreclosure over the years, and trouble gaining control of what structures remain.

The stark contrast in the two areas is apparent just from an overhead view of the neighborhoods:

In recent years, though, rehab activity has finally appeared on the other side of what had been a fairly firm border at Joseph Campau Ave. About 20-25 homes appear to have been reoccupied since 2019. When I drove around the neighborhood a couple weeks ago, several more rehabs were underway.

The Campau area is far from alone in Detroit as a surprising center of rehab activity. Similar waves of rehab and re-occupancy are unfolding all over the city. I’ve called out a few interesting areas of higher concentration in the heat map below, but it is widely dispersed.

I first noticed this trend of vacant homes being rehabbed and reoccupied in surprising parts of the city in late 2021 and began researching and writing about it. In early 2022, Arielle Kass at Crain’s Detroit wrote an excellent piece which explained and built on my research with interviews from local rehabbers, developers, and residents. As I’ve continued to dig deeper since then, the changes have only grown more intriguing.

Since 2019, Detroit has seen a net gain of about 9,000 re-occupied 1-4 unit homes. 17,000 homes that were vacant in 2019 are now occupied in 2024, while 8,000 homes that were occupied in 2019 have gone vacant.

This analysis is based on city assessment data from 2019 and 2024 as well as data from Regrid that includes US Postal Service vacancy data, building footprint counts, and deeded owner data. The Postal Service data which indicates occupied vs. vacant homes, I find, is most useful when it shows sustained trends over time that can be supported by ground-truthed visual evidence. Those are the conditions I’ve found in Detroit in recent years.

The data shows that while new vacancies are still an issue in Detroit they continue to be, for the first time in many many years, outpaced by re-occupancy.

Even newly vacant homes tend to look different since the pandemic. The 8,000 homes that have gone vacant since 2019 don’t resemble the devastation I’d grown accustomed to documenting over the last decade in my project GooBing Detroit. Instead of burnt homes and crumbling roofs, I see boarded windows on structures that still appear largely intact.

I still have more questions than answers about this phenomenon, so I want to walk through what I’m seeing, pose some questions for further research and ideas of my own, and share where I think this activity can be supported.

1. Detroiters, Perhaps Surprisingly, Own Much of this Progress: I’ll go through the data that suggests Detroit residents, rather than outside investors, are taking the lead in owning and rehabbing long-vacant homes.

2. Outside Ownership of these Homes Seems to be Declining — Why?: Could rising home values, counterintuitively, be leading to a decrease in outside ownership of a portion of Detroit’s housing stock?

3. How Detroiters Have Capitalized on this Opportunity: What may be enabling residents to take advantage of rehab opportunities.

4. Why This Rehab & Re-Occupancy is Happening Now: What might be driving the recent wave of rehabilitation and reoccupation in Detroit’s neighborhoods.

1. Detroiters’ Ownership of Detroit is Growing

When I first noticed this phenomenon a couple years ago I was glad to see long-vacant homes rehabbed and re-occupied, but I wasn’t terribly optimistic about who stood to benefit financially from the new activity.

I assumed that many of the same actors who defined the negative trends in Detroit neighborhoods’ housing market in the last decade — suburban speculators and landlords, and a smaller number of out of state investors — had simply changed their business model and would make money from a new kind of market activity. But the more I explore the ownership behind this phenomenon, the more it defies my expectations.

Examining who actually owns these re-occupied homes as of 2024, I found that 55% are either owner-occupied or appear to be owned by a person living in Detroit, per tax bill mailing address data, not by some distant LLC. Contrast that with the 8,000 homes that have gone vacant since 2019, where outside ownership by LLCs is much more common. There, only 36% of homes are owned by an individual in Detroit.

In other words, ownership of these re-occupied homes appears favor local hands. This is part of a citywide trend: the share of outside ownership of Detroit property overall is showing modest declines since the start of the pandemic.¹

Also notable is an increasing number of Detroit homeowners who appear to own rental properties in Detroit. In 2024, 9,500 Detroit homeowners are reflected as owners of rental properties, or have property tax bills for rental properties mailed to their homes (which can, but does not necessarily, indicate ownership). Those 9,500 homeowners, collectively, may own as many as 13,000 rental units citywide. That is up from about 4,000 homeowners who appeared to own rental properties in 2017.

The swings towards local ownership aren’t enormous, but the fact they exist at all amidst rapidly rising housing prices is very interesting and perhaps counterintuitive, because the story goes something like this:

Demand for housing, along with home prices, has grown rapidly across the country over the last five years. Simultaneously, people who have benefitted from owning and making money off of Detroit housing stock prior to the pandemic seem to be stepping back (somewhat) from the property they owned just as it’s gotten more valuable. How does that make sense?

I think you need an adaptation of a Yogi Berra line to explain at least part of the phenomenon, something like…

2. Detroit Homes Are Too Valuable; No One Makes Money on Them Anymore

One of the defining, and most pernicious, features of the Detroit housing market for the last 15+ years is the practice of “milking” rental properties. Joshua Akers and Eric Seymour, key researchers on the topic locally, defined it like this in their 2019 paper “The Eviction Machine”:

A home enters mortgage or tax foreclosure. It is purchased by a bulk owner or speculator. The home is either milked (rented without maintenance or repairs) or sold on a land contract on terms at or beyond the buyer’s means. An eviction occurs and the cycle repeats. The house is traded among bulk buyers often with quit claim deeds reflecting a nominal price of $1 (though this is unlikely the actual price). Once the house deteriorates beyond habitability it is abandoned to tax foreclosure.

In their paper, Akers and Seymour document more than 20,000 evictions that followed after tax sales citywide between 2009 - 2017. “Milking” was a widespread business model citywide prior to the pandemic, a major source of neighborhood instability, and a profit center for those engaged in it.

These are the kinds of transitions to vacancy I’d become accustomed to seeing in neighborhoods where predatory landlords & milking were common

The key to milking property is that the owner does not see the real estate they own as valuable in and of itself. Rather, it is a means to an end: The extraction of rent.

Similar practices in other cities have been documented by researchers like Matthew Desmond who wrote in his 2016 book Evicted: Poverty and Profit in the American City:

The same thing that made homeownership a bad investment in poor, black neighborhoods -depressed property values - made landlording there a potentially lucrative one. Property values for similar homes were double or triple in white, middle-class sections of the city; but rents in those neighborhoods were not.

A landlord might have been able to fetch $750 for a two-bedroom unit in the suburb of Wauwatosa and only $550 for a similar unit in Milwaukee's poverty-stricken 53206 zip code. But the Wauwatosa property would have come with a much higher mortgage payment and tax bill, not to mention higher standards for the condition of the unit.

When it came to return on investment, it was hard to beat owning property in the inner city. 'You buy on the North Side because they 'cash flow' nicely,' said one landlord with 114 central-city units. 'In Brookfield, I lost money. But if you do low-income, you get a steady monthly income. You don't buy properties for their appreciative value. You're not in it for the future but for now.’

Or, as a landlord in Cleveland put it more succinctly a few years ago in a forum on investor activity:

The streets in Cleveland are paved in platinum, because the houses are so cheap and the rents have never declined.

In Detroit over the last few years as home prices have risen so too have things like mortgage costs, property taxes, and, perhaps to some extent, standards for condition of housing units. All things that Desmond explained made rent extraction less attractive in wealthier suburbs where those were common features of the housing market. The conditions that made milking a profitable business model in Detroit may be complicated as home values are rising.

I am much more posing a question for study than offering an answer: Is part of the explanation for increasing ownership of re-occupied homes in Detroit by Detroiters, and declining out-of-city ownership, due to reduced attractiveness of milking as a business model?

I am in no way asserting milking is completely over, less so evictions (which I assume are back to pre-pandemic levels) [Update as of 9/10/24: A friend at a local tenant legal services provider let me know that, in fact, evictions in Detroit in 2024 are at an all-time low, even below pandemic-era when stronger prevention mechanisms were in place. They see this is as additional evidence that milking is on the decline as a business model in Detroit.], and I doubt rental housing conditions have changed tremendously on the whole either (although I could imagine they are somewhat higher within this universe of newly occupied homes with recent rehab activity). But I do see the landscape here as potentially less supportive of milking as a business model than it was pre-pandemic.

One piece of evidence in support of this is found in the primary source of inventory for landlords engaged in milking during the 2010s: The Wayne County tax foreclosure auction.

The 2024 tax foreclosure auction contains the fewest tax foreclosed Detroit properties in 20 years. This is both a result of vastly improved tools to keep Detroit homeowners out of the auction and rising property values that make walking away from a rental home, as was a common practice amongst predatory landlords, much less attractive.

3. Why Might Detroit Residents be Able to Capitalize on this Opportunity?

Even if there has been some recent pullback within Detroit’s housing market by the outside investors of the 2010s, that doesn’t necessarily lead to Detroiters stepping into the void they created. So why does it seem that Detroiters have been able to capitalize on this moment instead of just some different class of outside, moneyed, investors willing to make money off Detroit’s housing stock in a different way?

I suspect government cash infusions during the pandemic may have played a role, but there are some more local factors as well. I’m sure this list is far from exhaustive, but these are a few reasons that come to mind for me.

Sweat Equity Favors Locals

Jon Zemke, a local developer and housing rehab expert, made a point in Arielle Kass’s Crain’s article I mentioned earlier that I think is relevant here:

It's more cost-effective to fix up even a dilapidated house than it is to build new, in part because zoning regulations have changed over the years, and new construction often requires more than one lot. That's even the case when what's for sale is 'bottom of the barrel stuff.' Sweat equity can make up for a lot of the costs.

If part of what makes the numbers work (as in, the potential to make money off rehabbing homes) is investing sweat equity to keep rehab costs low, then that’s perhaps a factor that favors locals who are nearby and more easily able to put that sweat equity into a home.

Certain Opportunities to Purchase Homes for Rehab Favor Detroiters

About 4,000 of the 17,000 (23%) reoccupied homes were owned by the Detroit Land Bank Authority (DLBA) as of 2019. Sales programs at the DLBA privilege local buyers and likely created a market for Detroiters that was less competitive and lower cost for these homes than it would otherwise be to acquire them. 86% of those DLBA-sold homes have non-corporate, individual, owners in Detroit today.

Rehabbing Land Bank homes brings its own challenges, but I think there’s little doubt that the DLBA inventory is playing a role in fueling local ownership of these re-occupied homes.

Local Nonprofits are Responding to Detroiters’ Desire to do Housing Rehab

There are also local organizations that are supporting Detroiters who want to take on rehab and development projects. Building Community Value is a prime example of this. Since its inception, Building Community Value has trained Detroit residents to become successful real estate developers within their own neighborhoods.

The organization’s “Better Buildings, Better Blocks” program graduated 376 Detroiters as of 2022, providing practical knowledge, coaching, and access to a network of industry experts and alumni. Building Community Value emphasizes the importance of community-centered development, providing a framework for real estate development beyond just economic returns.

The goal of Building Community Value is to ensure that the revitalization of Detroit’s housing is led by people who live here and, as I’ve detailed above, there’s some evidence that is happening.

4. Why Are Homes Being Reoccupied Now

From the days of Detroit’s bankruptcy up until the pandemic, the number of vacant homes in the city was stubbornly static. Tens of thousands of demolitions did nothing to reduce the overall number of vacant homes as tax foreclosures and evictions, among other factors, added a new vacant home for every one removed by demolition.

So why did thousands of vacant homes suddenly start getting rehabbed and reoccupied around the start of the pandemic? It’s not as if the desire to revitalize Detroit’s vacant homes and neighborhoods is new—city government, investors, and foundations have been trying to stimulate just that for years. What changed?

I don’t believe things finally “clicked.” In fact, this wave of rehab and reoccupation seems to be happening largely despite local policies, not because of them.² The City’s massive investment in residential demolition, combined with a much too slow response to years of tax foreclosures and evictions, prevented progress, and removed potential rehab inventory, rather than spurred it.

Additionally, as I noted in earlier research on the topic, very few of these rehabbed & re-occupied homes have accompanying building permits or rental registrations. The regulatory programs designed to facilitate and guide this kind of activity have little connection to reality on the ground. I suspect those systems, in their current form, are much more likely to stifle this phenomenon than support it.

Instead, I think Detroit is part of a larger national trend of demand for housing. In this context, Detroit homes started to be rehabbed because, quite simply, people needed housing and Detroit had homes that could be rehabbed.

This reminds me of a line from a Marc Andreessen piece on product-market fit from 2007 (an unlikely source, I know, but bear with me). Andreessen wrote:

In a great market—a market with lots of real potential customers—the market pulls product out of the startup. The market needs to be fulfilled and the market will be fulfilled, by the first viable product that comes along. The product doesn’t need to be great; it just has to basically work.

In this framing, Detroit was able to offer a “great” market the first viable product that came along.

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Detroit’s Professional Investors

I posted an early chart from this research on Twitter the other day, and someone re-Tweeted it with this comment:

If I’m at all right about the “professional investors” that are stepping back from investments here, then I’m happy to see them go.

Much of what I’ve described above could be summarized as market actors stepping up to meet market demand. But I want to be clear: this is not an endorsement of a free-market approach to solving Detroit’s housing problems. If you want to see what a free-market approach has produced in Detroit, just look at that tax foreclosure auctions of 2008 to 2019. The tax auction system is the apex free-market solution—and an outright disaster.

To the extent market forces have mixed with a unique set of local and national circumstances over the last five years to produce the unprecedented level of rehab and re-occupancy of vacant homes we’re seeing, I think there's a degree of luck that it’s turned out the way it has.³

Just because many Detroit residents own these newly re-occupied homes today doesn’t mean they will tomorrow. Homes are bought and sold. A home owned inside the city today may be sold to someone outside the city tomorrow. Outside investors may return, outbidding local actors. Larger economic forces change, and so does where ownership sits, as we’ve just seen.

If we want these trends to continue, and grow, we need to support them, align regulatory and policy systems with them, and invest in the people behind them.

There are Detroiters out there, many feeling they haven’t been given a fair chance, taking a chance for themselves. These are our professional investors. We should support them with everything we’ve got.

1. It’s also worth stating that, just because local ownership is increasingly represented now doesn’t mean it will stay that way. Homes can always be bought and sold and where ownership sits can change with it.

2. I credited the DLBA’s sales programs earlier, I know, but it’s important to keep in mind the scale of those sales as compared to the other government policies (or lack of policies) mentioned here. The number of homes touched by things like demolition, tax foreclosure, and eviction dwarf the few thousand DLBA home sales I mentioned.

3. And, of course, part of that “luck” was massive federal spending as a result of a global pandemic. Not really the kind of thing you want to build your public policy around…

Speculators Win Big in Michigan Supreme Court Ruling

Michigan Supreme Court Rules that Rafaeli "Windfall Profit" Decision Applies Retroactively

This warrants a longer post than I have time to write today, but, as I’ve covered this story extensively, I wanted to send out a brief update:

Today the Michigan Supreme Court issued a ruling in Schafer v. Kent County that their decision in the 2020 case, Rafaeli vs. Oakland County, does indeed apply retroactively:

That means property owners who saw their properties sold in tax foreclosure auctions across Michigan prior to the 2020 Rafaeli decision are eligible to take steps to recover any “windfall profits” generated by the foreclosing county treasurer.

Put simply:

If a property you owned in 2015 was tax foreclosed for a debt (taxes + interest, penalties, and fees) of $3,500 and subsequently sold at auction for $7,500, you could now seek to recover that $4,000 of “windfall profits”.

The same applies, importantly, if you owned a portfolio of properties in 2015.

Here's just a tiny fraction of what can now be pursued by owners of multiple tax foreclosed Detroit properties from just the 2015 tax auction and the total windfall profits they can now, presumably, pursue from Wayne County:

What it Means:

For Speculators and Landlords

This seems to be a stunning gift to speculators, landlords who “milked” properties in cities like Detroit (collecting rent from dozens of homes while providing no upkeep nor paying taxes), and, in general, some of the very worst actors of the tax foreclosure auctions.

You can read much more about why those are the primary beneficiaries in two pieces I published on this topic a few months back — one is in the Brennan Center’s State Court Report and the other was an op-ed that appeared in the Detroit Free Press and also ran here in The Chargeback.

For Former Homeowners in Detroit

I received a good question from a reporter wondering what this would mean for Detroit homeowners who lost their homes as a result of overassessment.

My response was that I think anything like a systemic benefit is highly unlikely and I've seen little evidence to suggest there would be one.

The thing about overassessment in Detroit is that, as a lot of research has shown, it’s the least valuable homes that were overasssessed the most. While that is certainly likely to increase the risk of tax foreclosure, it’s not going to mean anything to the market actors deciding what to pay for that property at auction. That means those homes are unlikely to see high sale prices & windfall profits generated.

Additionally, an overassessed homeowner would likely only see an opportunity for windfall profits on one property whereas a speculator or landlord could see opportunities on many properties.

For Wayne County

I’ve previously estimated the windfall profit liability for Wayne County for the 2012 - 2019 tax auction years (which is where I have sufficient data to make an estimate) at $92M:

The tax auctions, however, started in 2002 so that is far from a complete picture. If the total windfall profit liability for the county wound up more in the range of $150M - $200M, I wouldn’t be surprised.

What I imagine comes next are a lot of lawyers looking for clients with windfall profit cases they can bring agains the County. Of course, it is going to be the speculators and landlords that are most organized, interested, and able to profit from such an endeavor.

Will Wayne County be able to absorb the financial demands that could come out of that? Will other Michigan counties? We’ll see.

The Detroit Land Boat Report

Ahead of the Detroit State of the City, the State of the Detroit Land Boat

News hit the wire last night that Detroit Mayor Mike Duggan will lay out a plan for ridding the city of abandoned vehicles in his annual State of the City speech tonight — including boats.

This is of particular interest to me. Over the years in Detroit, while I’ve been out surveying properties and knocking on the doors of homes behind on property taxes, I’ve also been collecting pictures of boats. Detroit Land Boats.

Here’s a few favorites:

Why are there abandoned boats on the streets of Detroit? Typically you’ll find just the fiberglass hull left on the street with anything of value stripped out. I assume it costs to drop one of these in a landfill, and the fact they’re fiberglass is probably added cost so people just dump them.

Ronnie Dahl had a great recurring bit a few years back on the local ABC news where she’d find abandoned boats in Detroit and return them to their owner. Some were suburbanites dumping in the city, some were Detroiters.

Data Driven Land Boats

I don’t update my old Detroit Land Boat Tumblr anymore, but I’ve continued to collect pictures of boats as I come across them in the city. Their numbers have declined significantly since the years I first started photographing them, around 2011 - 2016 — or so I thought…

News that the Mayor is including boats in his abandoned vehicle plan made me wonder how the Detroit Land Boat index is performing, so I turned to the City’s Open Data Portal and its Improve Detroit dataset. Improve Detroit is an app Detroiters can use to report issues across the city — potholes, fallen trees, etc. Abandoned boats are often reported too.

While you can’t specifically report an abandoned boat in Improve Detroit, many of the notes people leave when they submit a report will include a mention of an abandoned boat to specify what they’re reporting. Here’s all 623 mentions¹ of abandoned boats reported via Improve Detroit since 2015 (you can explore the map here, too):

As you can see from the counts on the map, there have been more reports of abandoned boats in recent years. Here’s Detroit Land Boat reports in Improve Detroit by quarter, 2015 - Q1 2024:

Are Detroit Land Boats really making a comeback? It certainly doesn’t seem like it from my drives around the city. Instead, I think we’re just seeing increased usage of the Improve Detroit app. If you look at quarterly growth in Detroit Land Boat reportings via Improve Detroit against overall growth in Improve Detroit reports of all kinds, you can see they track quite closely with one another.

Are Detroit Land Boats returning to shore? No, I don’t think so.

Let’s close with some more Detroit Land Boats.

Also, if you really want to go down the rabbit hole — check out Scott Hocking’s fabulous Shipwrecks series. He’s collected far more than I ever will.

1. There have actually been a total of 800+ abandoned boat reports, but there are many duplicate reports, so I’ve tried to remove those from the count.