The Residents are being underpaid for their properties.
VACANT LOT JUST COMPENSATION DATA ANALYSIS
ARGUMENT 1 - $100 SIDE LOT SALES ARE SKEWING THE DATA BY SIGNIFICANTLY LOWERING THE SALES PRICE
Side Lots are an ongoing vacant land sales program offered by the DLBA since 2014. Side Lots are vacant lots adjacent to the applicant’s occupied property on the left side, right side, rear, or diagonally behind (even across an alley, but not across the street). Side Lots will be sold for $100. This significantly skews the data as $100 is substantially less than what would be received on the open market.
If you remove $100 side lot sales from the land bank, the 85th percentile of the data becomes $10,000.
ARGUMENT 2 - $250 NEIGHBORHOOD LOT SALES ARE SKEWING THE DATA BY SIGNIFICANTLY LOWERING THE SALES PRICE
In addition to side lots, the city has a neighborhood lot program which allows residents to purchase city-owned parcels within 500 feet of their home for $250, once again, substantially less than what would be listed on the open market.
If you remove $250 community lot sales from the land bank, the 85th percentile of the data becomes $5,000.
ARGUMENT 3 - CITY OF DETROIT AND ITS RELATED ENTITIES MAKE UP THE OVERWHELMING MAJORITY OF ALL PARCEL SALES
The City of Detroit and the Detroit Land Bank Authority represent over 80% of the sales used in the just compensation calculation. This represents a major conflict of interest as the city is setting the fair market value using their own data, rather than that of the free market.
Number of times both the City of Detroit and the Detroit Land Bank Authority (or misspelling of either entities) is the grantor of a sale in the just compensation data:
CITY OF DETROIT: 69
CITY OF DETROIT - P&DD: 3
CITY OF DETROIT P&DD: 3
CITY OF DETROIT P&DD CARE DBA: 1
City of Detroit P&DD, Care of DBA: 60
CITY OF DETROIT PDD CARE OF DBA: 1
DETORIT LAND BANK AUTHORITY: 2
DETRIOIT LAND BANK AUTHORITY: 1
DETROIT ALND BANK AUTHORITY: 1
DETROIT LAND AUTHORITY: 1
DETROIT LAND BAK AUTHORITY: 1
DETROIT LAND BAKN AUTHORITY: 1
DETROIT LAND BAND AUTHORITY: 1
DETROIT LAND BANK: 14
DETROIT LAND BANK AUHTORITY: 1
DETROIT LAND BANK AUTH: 56
DETROIT LAND BANK AUTHOITY: 1
DETROIT LAND BANK AUTHORITY: 7534
DETROIT LAND BANK AUTHORITY, et al: 1
DETROIT LAND BANK AUTORITY: 1
DETROIT LANDD BANK AUTHORITY: 1
DETROIT LANK BANK AUTHORITY: 1
DETROIT LD BANK AUTHORITY: 1
DETROITL AND BANK AUTHORITY: 1
DETROITLAND BANK AUTHORITY: 1
DLBA: 3
Grand Total: 7761
7761 / 9310 = 0.834 = 83.4%
ARGUMENT 4 - STRUCTURES ARE INCLUDED IN THE DATA
Some of the sales used are not vacant land, and contain structures. Some of these sales were even executed by the land bank.
These are only a few of the transactions that involved structures
ARGUMENT 5 - INTERCOMPANY TRANSFERS, FAMILY TRANSFERS, AND OTHER NON ARMS-LENGTH TRANSACTIONS ARE INCLUDED IN THE DATA
Grantor is transferring ownership to a relative, spouse, friend, etc
431172 | 419 E EUCLID | ROW 4453
Molly Hubbell grants to Michael Zuzolo, her former spouse
431171 | 433 E EUCLID | ROW 4454
Molly Hubbell grants to Michael Zuzolo, her former spouse
Grantor is exactly the same as the Grantee
I am unsure the nature of these transactions, but I can safely conclude that deeding a property to yourself does not represent an open market transaction
194494 | 9019 DELMAR | ROW 2307
446997 | 5100 MT ELLIOT | ROW 4475
446996 | 5100 MT ELLIOT | ROW 4476
ARGUMENT 6 - PACKAGE DEALS ARE BEING COUNTED AS ONE PARCEL, RATHER THAN MULTIPLE
Package deals consisting of multiple parcels are included in the data as if they were only one parcel. Examples:
5187 Maxwell
2035 St Anne
1029 Clark
461 W Grand Blvd
These are just examples from the first few sales in the dataset.
ARGUMENT 7 - COUNTY TREASURER TRANSACTIONS (INCLUDING FORECLOSURES) ARE INCLUDED IN THE DATA
The data set includes transactions where the Wayne County Treasurer is the grantor. Several of these transactions are tax foreclosures, which are often considered distressed, or non-arms-length.
If you remove Wayne County Treasurer sales, the 85th percentile of the data becomes $2,904.
CONCLUSION
This entire data set is completely deficient. It contains a MAJORITY of transactions that are by definition not arms length nor market rate. Many parcels are not single vacant lots. Many transactions are between related parties, and a very small amount are actual marketed vacant lot sales as described by Detroit’s CFO. When processing the data to accurately depict the value of lots being condemned, a much higher and realistic valuation is obtained.
If you are to remove all sales from the Wayne County Treasurer, the City of Detroit, and the Detroit Land Bank Authority, in an attempt to truly represent a fair market transaction value from two private parties, the new 85th percentile value is $62,700.