Monday, October 5, 2009

The Numbers Game

Some numbers simply can't be nuanced. The Genesee County Land Bank newsletter The New View has these sobering statistics in an article about a series of community forums being held to address Flint's housing and population issues.
"Flint's population is about forty five percent smaller than it was in 1960. Thirty two percent of residential properties are abandoned. With a surplus of abandoned properties, sale values continue to decline. This year, the average sale value of a single family home in Flint is $16,400."
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  1. Does anyone think that real estate speculators will start buying these up, as they are doing in Detroit? Just wondering...unclebuck

  2. While I was reporting in Flint this summer, I heard a lot of stories of speculators. Many times they are simply sitting on property and letting it rot, hoping they can unload it for a profit at some point.

    There are also unscrupulous landlords who are depreciating property while renting it...saving money on taxes while renters live in increasingly dire conditions.

    There are also more responsible landlords who may have had good intentions in the beginning but don't realize what owning property in Flint entails, regardless of how cheap they got it.

    What perplexes me is what these speculators think is going to happen to Flint, especially in this economy, that would lead to profit on a house that only cost $17,000 to begin with in a city with a declining population and 30 percent of the housing stock already abandoned? What's the scenario in which a house would appreciate enough to make it a better investment than a savings bond?

  3. Worst Side War Lord. Wassup Steve!!!October 5, 2009 at 3:25 PM

    Mean, median, or mode? I'd bet that the few $100,000 properties are skewing things all the more. The median average is gonna be much less than $16,000.

    Flint and Michigan will "come back" when it either embraces immigrants and refugees ala Lewiston, ME or when fresh water becomes a rare commodity. Even then will the sixty miles separating us from Lake Michigan be too great a distance?

    Rest assured bistros, barristas, brewpubs, and bohemia will forever be boondoogles.

  4. Good points Gordie. It is perplexing. A friend in Detroit with Century 21, told me this summer that speculators are buying up whole blocks there. unclebuck

  5. Finally, someone backs me — albeit halfheartedly — on my longstanding claim that proximity to fresh water will save Flint.

    And I'm going to hunt around for some more precise numbers on Flint housing values. Miller Road and East Court houses are certainly propping up that $16,000 figure, but what about the hundreds, if not thousands, of houses that are basically worth nothing?

    I looked at comps for various Flint neighborhoods this summer, and they were all over the place with no logical pattern to pricing. Partly that was due to speculators overpaying and people desperate to get out selling too cheap. Just a very confusing market.

  6. Worst Side War Lord. Wassup Steve!!!October 5, 2009 at 6:06 PM

    Are there homes in Flint that have negative value? There must be. Imagine you owe thousands in back taxes. It may be worth your while to sell the house for nothing and throw in a couple thou to cover a portion of the back taxes.

    Fresh water is a precious commodity, but how close do you have to be to a resource in order to lay claim? Palestine, Yemen, and Lebanon lie in the oil rich Middle East, but there is little to no oil under their territory.

    Something else lower Michigan has is fertile soil and plenty of precipitation. Sure, not quite as rare, but nevertheless the ability to grow your own food without irrigation is something that much of the West, Northwoods, and Northeast cannot do.

    Eh... Michigan. It's gotta be worth somethin'.

  7. "Are there homes in Flint that have negative value? There must be. Imagine you owe thousands in back taxes. It may be worth your while to sell the house for nothing and throw in a couple thou to cover a portion of the back taxes."

    Or, of course, you can give various the Land Bank, keep the couple thou in your pocket, and walk away.

    That's how the Land Bank gets most of their property, I do believe.

  8. Lake Michigan moved and is now only an hour from SE Michigan? I'm thrilled. That will considerably reduce my drive-time!

  9. What are you gonna do with the extra money your saving on gas Doug? I figure that's about an 80 mile savings per trip one way...unclebuck

  10. I'm gonna be a good Merkin and buy stuff with my extra dough.

    Maybe some slippers and beer.

    Or a candle.

    I've been cursing the darkness way too much lately.

  11. Gordie-
    To your point about the potential value of Great Lakes water, I'll add my $0.02.

    The Southwest US is home to approx. 40 million souls, in Denver, Phoenix, Los Angeles/San Diego, Las Vegas,...

    All of these are 'artificial' settlements, made possible by cheap transportation fuels and abundant, subsidized Colorado River water. Over the past 50 years, these settlements have come to rely on the series of dams and reservoirs filled annually by mountain snowmelt draining into the Colorado.

    There is now considerable discussion that the last 50 years in the Southwest were unusually wet, and that the weather pattern is reverting to a more characteristic arid-ness (if that's a word). Couple decreased precipitation with global-warming induced snowpack shrinkage, and it becomes apparent that the agriculture, cities and recreation demands on the Colorado River drainage are unsustainable.

    Where will the agriculture come from? Where will cities locate where water is plentiful?


  12. Are these cities of the future going to locate in the Great Lakes while the southwest falls to ruins, or are our venal leaders in Washington just going to steamroll the Congressional delegation from an ever-shrinking part of the country and suck the lakes dry? I have my suspicions...

  13. Michigan's going to replace the Imperial Valley? Ummm...not at the same production costs as the past seventy years.

    We do have water. We don't have comparable sun intensity levels, cloud cover levels, or average temperatures.

    I hardly think that agribusiness is going to build an indoor Imperial-Valley-equivalent in Michigan merely because water is cheap here. As Will notes, it would be cheaper to build a network of pipelines from the Great Lakes and Missouri/ Mississippi watersheds to the left coast...and a lot of non-Midwestern Congressional votes might favor that approach.

  14. There's a doctoral thesis by Andrew Highsmith online that tells the story of the "New Flint" regional consolidation effort in circa 1958 in which Flint tried to annex about 132 square miles of land which would have brought the total area to about 162 square miles. Later attempts were not as agressive. None passed except small strip areas.

    Around that same time Grand Rapids did manage to annex about 21 square miles to bring its total area to 45 square miles. One has to wonder how things would be different now if Flint had been able to annex a lot more land. In particular, one wonders how Grand Rapids was able to convince people to vote for annexation. Also, if one just looked at the 24 square mile area that constituted Grand Rapids before about 1960, would that 24 square miles have a more dismal look than the city as a whole?

    In Canada, there was kind of a stealth incremental annexation in Toronto and perhaps other cities. First, new suburbs were created as part of a metropolitan district. Eventually, all these suburbs became part of Toronto.

    These kind of things improve crime and other city statistics and look better on paper at least.

    Would we have these same problems? Well, considering that the whole state now has problems like Flint, it only delayed the process.

    But one wonders how consolidation would have delayed some of the problems. This is not to say that suburbanites don't have plenty of good reasons to not be part of the central city, but it does make one wonder.

  15. Dr. Highsmith chose to see all of Flint's troubles through a racism lens. I think that's a faulty analysis.

    Racist perspectives per se were relatively rare among the "white flight" cohort, which factually included a significant element of the black middle class, and a wide variety of people that aren't well described by shallow "white/black" categorization. A much more valid description is that the surge to the suburbs was driven by socioeconomic and behavioral classism, in combination with the manifestation of changes to infrastructure and job/shopping patterns that made suburban living more attractive.

    In particular, this was manifested as sometimes-objectively-founded perceptions of behavioral differences between a less-well-off "other" group that was a candidate to move into a transitioning neighborhood, and those who then-currently lived there.

    As to why Flint's attempts to annex its suburbs were unsuccessful... this, too, is misinformed by a racism analysis. It's much more useful to note the haughtiness and arrogance of Flint's government and power structure in assuming that they were the natural and rightful leaders of the metro area, and that the suburbs rightfully should bow down. Little or no political effort was required in any of the annexation campaigns to convince suburban voters that they were economically and socially better off with their own separate governments, provincial though they might be, than they would be if subsumed by the core city and rejoined to the socioeconomic issues they had moved to the suburbs to escape.

  16. If you could manage to ignore Dr. Highsmith's point of view, there were some interesting historical perspectives and also things that he said happened that one can believe.

    What is difficult to believe is that all of Flint's, or any other city with a large African American population's troubles, can be blamed solely on discrimination. It's a lot more complicated than that.

    So I pretty much agree with you, JWilly.


Thanks for commenting.