Me too. I'm actually in Europe, only lived in Canada, but I was inspired by this guy: http://www.buzzfeed.com/drewphilp/why-i-bought-a-house-in-de...

So I looked around a bit... the problem is you can often get a cheap house, but only if you take over taxes on the property, which are often multiples of the value of the house as they accumulated over the years. And then there's annual property tax which are really high.

I don't exactly know why... But I've seen houses which get taxed on a value that's 5-10x the value of the house. And beyond that, the tax rate is often 3x higher than other cities.

So you might have a house that's worth just $20k, but then it's valued-for-tax at $100k, and you pay 4% on that. So you're paying $4k in taxes or 20% of the house's value every year. It's insane.

And it's keeping people out. I for one am not interested in paying $10k in old taxes for a cheap home I have to completely newbuild, and then pay taxes on it as if I was paying rent on top of a mortgage.

But it's probably a goldmine for any company with a 50-year vision who can get economies of scale on things like construction, and can negotiate huge tax-relief deals, e.g. waive old taxes and waive taxes the first 5 years etc.

Detroit uses a property tax assessment system, like many (most? haven't checked) states, that is based on "fair market value". However, a foreclosure sale doesn't count (in their eyes) as a "fair market" sale. What's more:

"The assessed value should represent 50% of the current true cash value of your property. IT IS NOT BASED UPON THE PURCHASE PRICE OF YOUR INDIVIDUAL SALE. IT IS BASED UPON A SALES STUDY OVER A PERIOD OF TIME."

http://www.detroitmi.gov/Portals/0/docs/finance/assessment/I...

(Clearly the municipality is trying to fight the clear erosion of their tax base by averaging in historical values.)

So even if you bought a house for $500, it may be assessed much higher. You could end up with a tax liability higher than the purchase price. I've looked at buying a cheapo house (or lot) in Detroit, because why not? But the tax assessment situation makes that a poor idea.

They they bought the parcels for 500 bucks a piece. Each parcel is bound to have similar recent sales from the pool of 5999. If it seems expensive to challenge for a well funded investor, it's not exactly cheap for a city that's bankrupt.

Property taxes in Detroit are surprisingly expensive.

When you look at it, they have a massive amount of infrastructure for a huge city that lost of a lot of taxable individuals in a relatively quick timeframe. Unless they can move everyone to a more densely populated area of the city and shut down the infrastructure, they have to bear the cost of being a huge city without the tax base of a huge city. That's why tax is so expensive. Well, that and massive corruption.

I wonder if anyone in Detroit calculated pros and cons of "defragmentation": moving people to several designated areas and shutting down infrastructure in vacated blocks. I understand that US is not North Korea and it is easier said than done, but still would be an interesting calculation.

The people that have stuck around thus far tend to be really attached to their current location. If you get them to up and move, they might as easily move to another city (maybe where their kids are) then to the new district.

Which might still be worthwhile, or at least worth considering if things are truly as far gone as they appear from those blight maps. If the city is having to maintain water, power, sewer, etc. to an entire neighborhood for a couple of homes, having those people move to a different city and shutting the entire neighborhood down would probably save a bunch of money.