Saturday, November 9, 2019

Detroit Slumlord Michael Kelly Continues to Profit

The city of Detroit, my hometown, can be akin to the Wild Wild West when it comes to basic things such as the buying, selling, renting, and maintaining of property. Local ordinances and state laws tend to be biased towards landlords and/or the wealthy. 

Because Detroit is physically a huge place, six times larger than Manhattan, twice as large as Brooklyn, and about one and half times the size of Boston, the relevant regulators lack the time or resources (or often the interest) to catch enough bad actors to enforce compliance. 

As drivers know, the mere knowledge that police whom you see and don't see are occasionally watching you can "convince" you to travel at or around the posted speed limits. But if people knew that police generally weren't watching or could only give $5 tickets when they caught someone doing 95mph, then more and more people would speed.

Many Black Detroit homeowners are caught in a vicious cycle. They weren't earning a lot thanks to job market discrimination. Banks also discriminated against Blacks by trapping them into mortgages with higher interest and fees than their credit scores justified. This left them with less money available to repair their homes or ride out job loss or medical emergencies. Making matters worse the City of Detroit maintained very high property taxes to try to make up for white flight and increasingly black flight. When downturns occurred many Detroiters ended up losing their homes and had to become renters. Many then became tenants of people like Michael Kelly.

Darlene Spells let out an exaggerated sigh as her son Corey peeled away the black tarp lining the front wall of the living room. Behind the plastic, where one would typically expect some sort of plaster sheeting, thin slats of wood lay stacked like rotting Lincoln Logs.
"Corey, show the bathroom too!" Spells directed from her bed in the room next door. Upstairs, more slats of wood peeked out below the shower head. The real damage, however, was only really understood when standing in the downstairs kitchen, where a yellow stain metastasized across the wood-fiber ceiling. The leak had been going on for years, she said.

The condition of the home, on the 9400 block of Manor Street, where Spells has lived since 1994, was a complicated topic. It didn't make much sense, looking at the crude mathematics of the situation: $120,000 given to landlords over the course of nearly 25 years. That sum had done nothing to prevent the house from falling apart.

At the same time, the very neglect that made rickety slats of wood the default decorative accent in the house, is also what released Spells from the unpredictability and capriciousness of absentee landlords—an ironic twist in Spells’ already-beleaguered relationship with the Manor Street house.

This summer she received a call from her landlord at Detroit Property Exchange. After obtaining the property via tax auction four years prior, and collecting nearly $20,000 from Spells in rent, the company, wanted to tap out. The leaky roof, the caving-in ceiling, the crumbling front door would not be fixed, Spells was told. Real estate speculator Michael Kelly, the owner of Detroit Property Exchange, would sign the house over for $1. He did so on Aug. 8. 

"Basically the house should be condemned," said Melissa Owsiany, who worked for Detroit Property Exchange for almost six months before quitting in October, because of what she saw as an ethical conundrum. "Nobody could ever own it legally and rent it to somebody because it’s in such bad condition."

While the former employee said the $1-deed scenario is atypical for the company, milking properties for any revenue stream — regardless of condition — is not. 

Internal emails obtained by 7 Action News and interviews with tenants, highlight a series of extractive practices that utilize the annual Wayne County tax auction to obtain cheap properties and then cycle people in for profit, often with little regard for the properties, the law, or the individuals inside.

In emails, Detroit Property Exchange staffers discussed homes within their portfolio that were being rented out with mold, lead, asbestos and broken hot water heaters. Discussions of repairs often stressed finding the cheapest possible option. 

Notably, there is little evidence of oversight or an attempt to reign in the self-proclaimed speculator, with the city privately backtracking public declarations to hold the property owner accountable. In the last two years, Kelly, and associated LLCs, have been released from millions in unpaid property taxes and blight fines, 7 Action News has learned.

I have some experience in the real estate business. It's the combination of race and class that enable vampires like Michael Kelly to behave as they do in Detroit. In a richer and whiter area a landlord would simply not be able to routinely rent out properties with mold, asbestos, no heat, etc. 

This seems to happen over and over again to Black impoverished people, whether they are in Detroit, Flint, New York City, Lowndes County, or in Presidential son-in-law Jared Kushner's Baltimore slumholesNobody (not even Black impoverished people) thinks that it's necessary to treat Black impoverished people with anything remotely resembling respect or humanity. And so they don't.

And so people who are quick to anger against those who look like them meekly accept horrible treatment from white people. And the world keeps on turning. Poverty is a big money maker for some people. Slumlords, rent to own outlets, payday loan stores, prisons, social workers, check cashing stores, rip off credit cards, all eat well off of Black poverty.
The only solution is that people like Kelly go to prison just as quickly as someone selling drugs or as someone shooting another person. When children are growing up around asbestos, lead, and mold, they are being robbed of their physical and mental potential.
It's criminal.

blog comments powered by Disqus