Revenue Generating Open Houses for Tax-Foreclosure Auction

About the Program

Category: Community and Economic Development (Best in Category)

Year: 2012

For many years the Washtenaw County Treasurer protected home owners and small businesses from tax foreclosure. Under Michigan law, homes, farms, and businesses with unpaid property taxes face foreclosure. However, the economic downturn, with its attendant mortgage foreclosures and decreased property values, has caused an increase in tax foreclosures despite all efforts at prevention. When tax foreclosure occurs, the only way to recoup money already spent on prevention and notification is to auction the property and hope to sell it for enough money to reimburse all taxes plus expenses. Most foreclosed properties, especially in neighborhoods hit hard by foreclosure and/or abandonment and blight, do not garner the minimum bid necessary to cover costs. The Treasurer, in partnership with the City of Ypsilanti, a municipality hit especially hard by foreclosures, found a way to increase the sales and the prices of property at public auction. The team designed a program of Open Houses so that local residents and families could tour the homes and set their prices higher knowing the condition of the premises. The data proved that the Open Houses worked so well that the program will be continued in coming years. Furthermore, other municipalities have asked to participate.