Fake landlords, incomplete records complicate land bank buyback program

The proposed sale of several dozen land bank-owned homes was put on hold Thursday amid concerns from council members that occupants weren’t given a fair chance to buy the properties before they were offered to a development company.

The decision comes a day after Council Member Mary Waters called an emergency press conference to expose what she claims are flaws in the Detroit Land Bank Authority’s Occupied Buy Back Program. Waters called for a halt in sales of occupied homes owned by the land bank and an audit of all sales of 10 more properties over the last five years.

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Waters called reporters to Detroit’s MorningSide neighborhood Wednesday to meet residents who say they were scammed by fake landlords and therefore lack documents needed to qualify for the land bank program. At least 20 of the 42 homes bundled in a pending sales deal with Bedford Development are occupied by people who are ineligible to buy houses for $1,000 through the program. 

“We’ve got to stop the sales right now,” Waters said Wednesday. “We need the city to own these homes and give people an opportunity to be homeowners … (The land bank) is basically just turning their hands to people as they come down and plead for help. It makes no sense and we’ve got to stop it.”

Bedford is offering to buy 42 land bank properties across the city – of which 26 are occupied – for $2,500 each. City documents state Bedford plans to buy the properties for $105,000 and invest $2.7 million toward renovating the properties at a pace of one home per month. Land bank spokesperson Alyssa Strickland said Bedford is expected to prevent displacement by offering occupants a chance to lease or buy the homes. 

Strickland said Bedford’s owner has renovated 19 other land bank houses, which leaves the authority confident that “he’s a good actor and cares about people living in these occupied homes.”

A decision over whether to advance Bedford’s proposal for the properties was put off Thursday by a council committee after Waters and Council Member Latisha Johnson expressed concerns. Waters said her staff canvased the properties and found some occupants were never offered the opportunity to participate in the buyback program. 

“We cannot depend on the land bank to do this,” Waters said. “It’s pretty clear to me that they are just not sensitive to the residents in this community.”

MorningSide Community Organization President Eric Dueweke also claimed the land bank failed to do its due diligence. Dueweke said he identified four occupants who are eligible for the buy back program and want to apply. 

Land Bank Authority CEO Tammy Daniels told the council Thursday that it’s challenging to contact occupants, but they were informed multiple times about the potential sale. Strickland said six of the 26 occupied properties were unresponsive to the land bank’s outreach efforts. 

“We have over 1,800 occupied properties in our inventory, and it has always been our position to put people first,” Daniels said. “We do not, as a general proposition, evict people who are living in our homes. However, at the same time the land bank authority is charged with disposing of properties. We don’t have the bandwidth or the expertise to provide the social services needed for a significant number of individuals who are occupying our properties.” 

Bedford plans to buy the homes through the Land Bank’s Occupied Property Disposition Program. Strickland said a core goal of the program is stabilizing housing for residents who are living in land bank homes under false pretenses. 

“Legally, we could have moved forward with an eviction years ago but we don’t want to put people out,” Strickland said in an interview. “We want to find pathways to stable housing. We think this is better than evicting people.”

However, occupants say they would rather buy their houses now. Two residents who spoke with BridgeDetroit said they’ve lived in land bank properties for years, paid for renovations and have enough cash saved to buy their homes but can’t because they’re considered squatters by the land bank.

“I’m here, I’m in the house, I should be the first one to get it,” said India McSwain, who lives with seven children. “You know that my paperwork process (with the purported landlord) was not legitimate, but you know I’ve been here for years. Why not just give it to me?”

The buy back program offers people occupying DLBA-owned houses an opportunity to purchase the property for $1,000 if they successfully complete a year of homebuyer counseling and save up enough money to pay their first summer tax bill. It also requires residents to prove a legitimate connection to the property by providing documents like a lease agreement or bills mailed to the address in their name. 

Strickland said 984 Detroiters became homeowners through the buy back program since it started in 2015. City budget documents show 158 households are currently enrolled in the program while 17 households failed to complete it.

McSwain said she bought her house on Maryland Street for $18,000 in 2009 through a land contract with a man posing as the owner. McSwain didn’t learn the deal was illegitimate until she tried to obtain the deed in 2012. She still lives there today. 

Wayne County records show the house was foreclosed on in 2014. McSwain applied for the buyback program in 2017 but was unable to provide proof that she had bought the home or lost it to foreclosure, Strickland said.

Perryman Woods lives without power or electricity in a land bank home on Whitehill Street that’s part of the proposed sale to Bedford Development. Woods said he originally leased the home from a fake landlord six years ago but continued to stay in the house after learning the truth. Woods said he has documents showing his residency and tried to apply for the buy back program in 2019 but was denied for unknown reasons.

Strickland said Woods was rejected because he was living at another address while attempting to renovate the land bank home. Strickland said he was notified in 2021 that the house could go up for sale.

Woods collects $915 per month in disability payments, which he said isn’t enough to rent in Detroit. Woods said he’s also struggled to find low-income senior housing that will accept his 11-year-old American bulldog companion. 

“Let us take a chance on fixing this house up and making it a home right before you take this house and give it to somebody else that’s going to make the rent impossible for us to pay,” Woods said. “This is basically just moving us out of our neighborhood.”

Woods and McSwain said they’ve invested thousands of dollars into the land bank homes. McSwain replaced windows contaminated with lead paint. Woods had $1,200 stolen by a contractor who promised to restore electricity to the home. 

Strickland said it’s simply bad practice to sell land bank homes to people who move in illegally. 

“We don’t want anybody to lose money that they’ve put into a property, but I would also say there’s a lot of risk involved if you’re investing money into a house that you know you don’t own,” Strickland said. “We need to make sure that we’re doing right by the neighborhood as a whole, too. The occupant in the house has their need for assistance, but they also have neighbors. We quite often get calls and complaints that people have moved into a land bank house on their block, and neighbors are upset about that.”

Daniels said the land bank is meeting its goal of returning properties to productive use. The land bank’s stock of properties declined by 3,496 parcels in the last year. It currently owns 72,816 total parcels, including 9,245 residential structures. 

Most of the properties sold since March 2022 are residential structures. The number of vacant lots dropped by 20, with 62,948 still owned as of March 2023. 

Learn more about the buy back program by emailing buyback@detroitlandbank.org or calling 313-974-6869.