New Michigan State Law Is Pricing Out Redevelopment Plans

A new state law that allows for former property owners to collect surplus proceeds after a foreclosed property is sold is crippling redevelopment plans. The law received praise because it allowed those who were able to recoup some of the money from sales that would have gone into county government monies. More than 300 metro Detroit property owners filed forms to recoup the profits of the auction sales on their foreclosed properties. According to Hazel Park City Manager, he rejected taking two properties that the city would’ve normally developed because former property owners had filed claim forms on them. In Oak Park, the city passed on a property with a filed claim form because its value was too high. The claims add more cost to the purchase price of the foreclosed homes, making them prohibitively expensive.