Detroit homeowner’s Land Bank nightmare might be coming to an end

Joe Belanger might finally have some hopeful news from the Detroit Land Bank Authority (DLBA) .

The Detroit resident says the agency tasked with selling off city-owned property suggested it will reimburse him thousands of dollars he spent reconnecting his home to running water .

“The money is huge for me,” he said. “It’s put me in a realistic position of finally finishing this house.”

Belanger says he still needs to spend at least $15,000 to connect his home to the sewer line — another cost he wasn’t expecting. Until then, he’ll be out of compliance with the DLBA, which could still repossess the home he’s invested tens of thousands of dollars into already.

But the situation is looking a lot more encouraging than when Outlier Media first covered his story last year.

Belanger is one of many people Outlier has written about who bought homes from the DLBA without realizing the true cost of fixing them up because of issues with their water and sewer lines. These buyers said the Land Bank and the Detroit Water and Sewerage Department (DWSD) did not properly inform them about how expensive reconnecting the water and sewer would be — or even that they needed to be reconnected at all.

The repairs can cost between $5,000 and $20,000 depending on how far into the street or alley the owner needs to dig.

The DLBA is currently negotiating with Detroit City Council on a new memorandum of understanding (MOU) with the city. A draft of the agreement contains few changes from the previous MOU that expired in December and says nothing about water or sewer line hookups.

Ghosted by the Land Bank

Land Bank homebuyers have encountered a variety of problems related to their water and sewer lines over the years. Some got conflicting information from the Land Bank and water department. Some knew the house might not be connected to running water but bought it anyway, only to find out reconnecting was much more expensive than anticipated.

Some DLBA listings had downright false information about the status of the water line. The Land Bank and the water department provided that information to the public for about six weeks in 2020 until realizing that the water department’s data was inaccurate due to poor recordkeeping.

Listings on the Land Bank’s website now say the agency has “no knowledge of the condition, connection, or operability of the water service line” and that it may cost $10,000 or more to reconnect.

Belanger bought his house during that six-week window in 2020. The listing said the water line wasn’t cut. But when a DWSD technician came out to turn on the water, the technician told him it wasn’t connected and Belanger would have to replace the service line from the house to the water main. It ended up costing him more than $6,000.

The DLBA said it previously reimbursed 34 homebuyers who were misinformed about the status of their water line.

But the Land Bank dragged its feet in Belanger’s case. He wasn’t aware he might be eligible for reimbursement until he spoke to an Outlier reporter last year. Belanger sent multiple inquiries to the DLBA over a nearly six-month period, starting in October, to see if he could get his money back. His contact stopped replying to his messages on Dec. 11, in emails Belanger shared with Outlier.

A reporter inquired about his situation several weeks ago. Belanger said the DLBA told him last week that it would reimburse him for the reconnection once he closes out a permit and gets a final clearance from the water department.

Reforms aren’t on the way

The Land Bank operates under a memorandum of understanding with the city. It expired at the end of 2023 , and the two parties have since been operating in “good faith,” a DLBA spokesperson told Outlier in February.

The MOU went up for approval before City Council on April 2, but councilmembers voted 5-3 to send it back to committee for further discussion.

Council President Pro Tem James Tate chairs that committee, which must once again vote to move it back to the full council. He admitted that there are few changes between the previous MOU and the one voted on by the council, saying the Michigan law governing land banks restricts what can go in the agreement. The mayor gets to appoint all five members of the DLBA’s board, but now there is a “handshake agreement,” according to Tate, that council will get to select one.

“Structurally, there are very few changes,” he said.

Tate said he tried to reform the contract to get more protections and information for homebuyers. However, he said the Mayor’s Office and DLBA told him there isn’t enough funding to inspect the water lines of every home in its inventory.

“It would cost millions of dollars to inspect and potentially reconnect every Land Bank home,” Tate said.

Instead, the Land Bank gives more warnings to would-be buyers about the cost of potential water line hookups: on the listing, when purchasing the home and at closing.

“Now, there’s a bright line that makes it very clear no one knows for certain if the line is cut or not.”

Playing the waiting game

Belanger is optimistic the Land Bank will reimburse him. But the agency did not make an explicit commitment in its response to Outlier.

“Following a thorough investigation, we are actively working with Mr. Joe Belanger and hope to resolve the situation in a manner that is mutually acceptable to all parties,” DLBA spokesperson Zackery Burgess said in an email.

He declined to comment on whether Belganger would get some money back if he got final clearance from the water department.

Belanger says even if he does get the check, he discourages anybody without deep pockets from buying a Land Bank home. He describes his house as a “money pit.”

“I’m a professional contractor, and this whole process has been a nightmare. The city is not doing anybody any favors. People think they’re getting an affordable house but end up breaking their backs trying to make it livable.”

Detroit homeowner’s Land Bank nightmare might be coming to an end · Outlier Media