The Detroit Land Bank Authority (DLBA) plays a crucial role in the revitalization of Detroit by strategically managing and redeveloping vacant and abandoned properties. Recognizing the power of community-led initiatives, the DLBA Community Partner Policy is designed to foster collaborations with non-profit, faith-based, and community development organizations. These partnerships are essential to drive social and economic progress within Detroit, ultimately enhancing the quality of life and economic well-being of its communities. This policy outlines how these vital partnerships function to support Detroit’s resurgence.
Understanding the Objective of the DLBA Community Partner Policy
At its core, the DLBA Community Partner Policy is built on the belief that partnerships are fundamental to effectively repurposing abandoned properties throughout Detroit. By working closely with City of Detroit Revitalization Offices and community-focused organizations, the DLBA aims to channel properties into projects that generate positive community impact. The primary goal is to support initiatives that create jobs, boost local incomes, and expand the city’s tax base, thereby contributing to sustainable community growth and development. This policy provides a structured framework for property disposition, ensuring it aligns with broader city-wide revitalization strategies.
Who Qualifies as a DLBA Community Partner? Eligibility Criteria
To ensure that partnerships are impactful and aligned with community interests, the DLBA has established specific eligibility criteria for organizations seeking to become Community Partners. These requirements are essential for maintaining accountability and ensuring that property is transferred to capable and committed entities. To be eligible, organizations must meet all of the following conditions:
- Location within Detroit: The organization must be physically located within the City of Detroit, demonstrating a direct connection to the community it intends to serve.
- Federal Tax-Exempt Status: Applicants must possess a federal tax-exempt status, typically under section 501(c)(3) of the Internal Revenue Code. This ensures they are non-profit and mission-driven.
- Current on Detroit Property Taxes: The organization must be current on all property taxes for any properties they own within Detroit. This demonstrates fiscal responsibility and commitment to the city.
- No Blight Violations or Fines: Applicants must have no outstanding unpaid blight violations or fines in Detroit, reflecting a commitment to maintaining community standards and property upkeep.
- Recommendation Letter: A letter of recommendation is required from either the relevant District Manager or a Detroit City Council Member representing the district. This step ensures local support and alignment with community needs.
- Good Standing with DLBA: The organization must be in good standing with the DLBA, which includes compliance with any existing agreements with the Authority. This demonstrates a history of responsible partnership and adherence to commitments.
Meeting these criteria is crucial for organizations to qualify and maintain their status as a DLBA Community Partner. Failure to comply with these requirements can lead to application denial or revocation of partnership status. The DLBA retains the discretion to approve or reject any Community Partner application.
How Community Partners Can Purchase Property from the DLBA
The DLBA offers various disposition programs through which Community Partners can acquire property. These programs are designed to facilitate property transfers for projects that align with the partner’s mission and contribute to community development goals. DLBA staff are responsible for managing applications and inquiries from Community Partners, guiding them through the acquisition process. Importantly, Community Partners are eligible for specific purchase price discounts under certain defined circumstances, making property acquisition more accessible for community-focused projects. These discounts are detailed further in the pricing section of the policy.
DLBA Approval Process for Community Partner Property Purchases
The DLBA carefully evaluates each Community Partner’s application to purchase property to ensure that proposed projects are viable and beneficial for the community. Several key factors are considered during the approval process:
- Comprehensive Project Description: The Community Partner must provide a detailed description of the proposed project for the property, outlining its objectives, activities, and anticipated community benefits.
- Project Feasibility: The proposed project must be realistic and suitable for the property being acquired. For example, a residential lot would not be appropriate for an amusement park. The DLBA assesses the practicality of the project in relation to the property.
- Financial and Development Capacity: The Community Partner must demonstrate they have sufficient financial resources and organizational capacity to successfully finance, develop, and complete the proposed project within a reasonable timeframe. This includes showcasing access to funding, project management expertise, and a realistic timeline.
- Alignment with City Plans: The project must align with existing City of Detroit development plans and contribute to the highest and best use of the area. This ensures that projects are integrated into broader community development strategies and maximize positive impact.
- Property Tax Compliance: The Community Partner must be current on property taxes for all properties they own, directly or indirectly, within Detroit. Alternatively, they must be in good standing with a payment plan with the Wayne County Treasurer’s Office, demonstrating financial responsibility.
- Good Standing with DLBA and City: The Community Partner must be in good standing regarding any existing agreements with both the DLBA and the City of Detroit, reinforcing a history of reliable partnerships.
The DLBA reserves the right to ultimately approve or deny the sale of any property to a Community Partner, ensuring careful stewardship of land resources and alignment with strategic goals.
Pricing and Discount Structures for Community Partners
The DLBA employs a consistent and transparent approach to pricing properties for Community Partners. Several factors are taken into account to determine a fair and appropriate price, ensuring responsible use of public assets while supporting community initiatives.
Valuation Methods
To establish property values, DLBA staff may utilize various valuation methods, including:
- Appraisals: Professional appraisals, which can be in-house or external, to determine market value.
- Broker’s Price Opinions (BPOs): Opinions from real estate brokers on property value.
- Twice the State Equalized Value (SEV): A calculation based on the state-assessed value of the property.
- Prices Set by City Revitalization Offices: Values established in coordination with City of Detroit Revitalization Offices.
Pricing Considerations
The DLBA aims to set property prices at fair market value (FMV) whenever feasible. In all cases, unless there are compelling reasons, the price should not be less than the Property Costs incurred by the DLBA. “Property Costs” encompass all expenses related to a specific property, including:
- Acquisition costs
- Maintenance and repair expenses
- Title clearance
- Demolition (if applicable)
- Environmental due diligence
- Property taxes
- Fees
- Marketing expenses
- Pricing costs
- Direct and indirect operational costs of the DLBA allocated to the property
Discount Opportunities for Community Partners
Recognizing the valuable role of Community Partners, the DLBA offers specific purchase price discounts based on the disposition program and the nature of the proposed project:
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Marketed Properties and Side Lots: No discounts are available for properties sold through standard marketing channels or side lot programs.
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Online Auction Programs: A fixed 20% discount is applied to properties purchased through DLBA online auctions.
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Direct Sales: Discounts for direct sales are structured based on project type:
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Vacant Land Projects (Non-Construction): A fixed 50% discount is offered for vacant land projects that do not involve building residential or commercial structures or parking. Eligible projects include beautification, parks, gardens, and some agricultural uses.
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Renovation of Existing Residential Structures (1-4 Units):
- Affordable Housing: A fixed 50% discount is available for affordable housing projects, contingent upon the Community Partner entering into an affordability agreement monitored by the City’s Civil Rights, Inclusion & Opportunity Department.
- Nonprofit Purpose Housing: A fixed 50% discount is offered for housing serving the nonprofit’s mission, such as housing for the homeless, veterans, or youth aging out of foster care.
- Other Residential Structures: A 20% discount, potentially combined with discounts from the DLBA Economic Development Policy, is available for other residential renovations not classified above.
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Other Nonprofit Projects: A fixed 50% discount is provided for projects that solely advance the Community Partner’s nonprofit purpose. These projects may include a minor non-qualifying element, but only if its cost is no more than 10% of the total project cost.
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Minimum Purchase Prices: Regardless of discounts, the purchase price for a vacant lot cannot be reduced below $250, and the price for a property with a structure cannot be less than $1,000.
The DLBA maintains the discretion to grant or deny any discount, ensuring responsible allocation of resources and alignment with policy objectives.
Historic Pricing Considerations
In specific cases where property sales were previously hindered due to agreements or restrictions from a City Revitalization Office, the DLBA may consider historic pricing from the date of the Community Partner’s original application. This provision allows for flexibility and addresses situations where past circumstances may have impeded property acquisition.
Community Partner Endorsements for Prospective Homeowners
Community Partners can play a vital role in identifying responsible homeowners who are committed to community stability and property maintenance. Through the Community Partner Endorsement program, partners can recommend prospective homeowners who, if approved, receive a 20% discount on the purchase price when bidding on a DLBA auction property.
Rules for Endorsements:
- Written Selection Process: Community Partners must submit a written description of their process for selecting and endorsing prospective homeowners to the DLBA, ensuring transparency and fair selection.
- Endorsement Limit: Each Community Partner can endorse up to three prospective homeowners per year who they believe will be good neighbors and contribute positively to the community.
- Discount Terms: Endorsed homeowners receive up to a 20% discount on the auction purchase price, but the price cannot fall below $1,000. The discount applies only to the purchase price and cannot be combined with other DLBA discounts.
- Purchase Agreement Compliance: Endorsed homeowners must adhere to all terms of the Purchase Agreement with the DLBA, including deadlines for closing, property rehabilitation, and occupancy.
- Consequences of Breach: If an endorsed homeowner violates any rules or agreements related to their endorsement, the DLBA may terminate the Community Partner’s status, holding partners accountable for their recommendations.
- Written Confirmation: Community Partners must provide written confirmation of each prospective homeowner endorsement to the DLBA for proper documentation and processing.
Additional Key Policy Points for Community Partners
Beyond pricing and eligibility, several other policy aspects are relevant for Community Partners engaging with the DLBA:
Title Services
For improved properties and properties with unclear DLBA ownership interests, Community Partners are required to enter into a Title Services Agreement before acquisition. Discounted Quiet Title Services are available to Community Partners, streamlining the process of clarifying property titles.
Zoning Compliance
Prior to any property sale, DLBA staff must verify that the proposed property use complies with Detroit zoning regulations. Final property closing is contingent upon appropriate zoning being in place. If zoning is not initially compliant, the DLBA may offer a purchase option for a specified period, allowing the Community Partner to pursue rezoning, waivers, variances, or zoning appeals. A non-refundable option fee is required for this option period.
Property Holds
The DLBA may accommodate requests to “hold” DLBA-owned properties for a limited time for specific purposes, such as due diligence or documentation completion. Property holds are formalized through written agreements that require the applicant to maintain the property at their expense and provide proof of maintenance. Holds are typically for a maximum of six months, with potential renewal options, and are subject to holding fees based on the number of properties held.
Transaction Agreements
All property dispositions by the DLBA are executed through written agreements, such as purchase agreements, development agreements, or option agreements. These agreements legally bind the Community Partner and allow the DLBA to enforce conditions related to property development and use, ensuring responsible property stewardship.
Compliance and Anti-Straw Buyer Provisions
Purchasers of DLBA properties must enter into development agreements outlining pre-development and active development requirements. Violation of these agreements can result in the DLBA reclaiming property title. The policy explicitly prohibits Community Partners from acting as straw buyers to transfer property to ineligible non-Community Partners, safeguarding the integrity of the Community Partner Program. Violations can lead to termination of Community Partner status.
Tax Capture Information
For information regarding the DLBA’s policy on waiving its five-year, fifty-percent tax capture for Infill Housing Lots, Community Partners are directed to consult the DLBA’s Tax Capture Waiver Policy.
Required Approvals
Certain land sales under this policy require approvals from higher authorities:
- DLBA Board of Directors Approval: Required for transfers of more than nine parcels to the same person within a 12-month period, transactions exceeding $75,000, and any transactions requiring policy exceptions or staff recommendations for Board approval.
- Detroit City Council Approval: Required for land transfers resulting in more than nine parcels being transferred to the same person within a rolling 12-month period, ensuring city oversight of larger property transactions.
Conclusion: Partnering for a Stronger Detroit
The Detroit Land Bank Authority Community Partner Policy is a vital instrument for Detroit’s ongoing revitalization. By establishing clear guidelines for collaboration, offering targeted support, and fostering responsible property reuse, the DLBA empowers community-based organizations to be key drivers of positive change. This policy not only facilitates the transformation of vacant land and properties but also strengthens the fabric of Detroit’s neighborhoods, building a more vibrant and equitable future for all its residents through strategic partnerships.
