Selling low-value housing to owner occupants or investors: The effect on property disinvestment in Detroit

Journal of Urban Affairs

Research on addressing vacant and disinvested properties focuses primarily on remediation, not on prevention. Increasing owner occupancy might prevent property deterioration because homeowners typically maintain properties better than landlords. Three Detroit programs sold publicly owned houses to very-low-income households in 2017. After 5 to 6 years, 86.2% maintained owner occupancy. Multinomial logit regression equations showed program properties had significantly more positive change in property condition than did comparison group properties purchased at tax auction in an expanded model but not in a model with fewer controls. Program properties were associated with less risk of properties being vacant in a model with fewer controls. Poisson regression estimates showed no relationship between program participation and property tax status. Through interviews, owner occupants stated a desire to repair their homes but had handicaps in doing so. Their homes often needed major, expensive repairs to provide safe, healthy living conditions. They lacked funds for significant repairs and had no home insurance. Such homeownership programs may help prevent property deterioration and ultimately abandonment but would be more effective if owners received financial assistance for major repairs and aid obtaining insurance. Studies using varied research designs and data should assess whether these results are replicated.