Detroit's infamous $500 houses have become the stuff of legend since the stories started
making the media rounds
in 2010, becoming a salient point in any discussion
regarding America's housing crisis
, decades of (ongoing) disinvestment in urban population centers and outlying neighborhoods
, and the inequitable socioeconomic realities of "revitalization
The $500 homes are a symptom of the city's (ongoing) foreclosure crisis
, which rapidly accelerated during the housing market collapse in 2007 and the ensuing Great Recession.
Jerry Paffendorf, a self-described "artist, futurist, and entrepreneur
," moved to Detroit in 2009. This was before billionaire Dan Gilbert moved the headquarters of his company Quicken Loans downtown and became the figurehead of Detroit's revitalization, as he bought up skyscraper after skyscraper. This was a couple of mayors ago, when the city was still reeling from the Kwame Kilpatrick kleptocracy, but before Kilpatrick was convicted of 24 federal felony counts. This was before the biggest municipal bankruptcy filing in American history.
It was six short years, yet a lifetime ago for Detroit.
Back then, Paffendorf became something of a figurehead in his own right – a "coastal transplant" who chose to move to Detroit to "Make a Difference," as the media loved to tell it. It's a narrative that many Detroiters have wearied of, largely because many of the self-proclaimed changemakers often inadvertently add to a problem that only gets more complicated the more outside investment comes in.
Paffendorf, however, isn't so much a self-ordained "changemaker" as he is a proven "solutionbringer."
Mapping the problem
When LOVELAND Technologies
(of which Paffendorf is CEO and co-founder) launched in 2009, more than 35 percent of Detroit's 343,849 residential parcels were vacant or abandoned.
"When we started LOVELAND, we were basically interested in finding ways to hook up vacant properties to the Internet," he says. "What evolved from that idea was following through to the origin of where these $500 houses came from in Detroit. That brought us to tax foreclosure in the city. We started mapping all of these properties and found that was an incredible public resource people wanted more of."
Foreclosure is a gateway to many property problems. It's a symptom of poverty, of over inflated tax valuations, and it leads to vacancy and blight.
Out of that tax foreclosure mapping came a desire to see the public information on every single property in Detroit – who owns everything; who controls it; what is the zoning, the tax assessment, the ages of the buildings; and everything else the city, county, and state use to track and understand property owners. LOVELAND was focused on building the "best system possible for anybody looking for property information."
Why Don't We Own This
, a passion project of LOVELAND's, started as a rhetorical question that evolved into the question, "Who owns everything?", leading back to tax foreclosure.
From there LOVELAND, in partnership with research organization Data Driven Detroit
, worked on the $1.5-million Motor City Mapping
project, a project commissioned by the federally-appointed Blight Elimination Task Force. Motor City Mapping is a citywide mapping survey for which researchers went out and visited every single property in the city, noting if there were any indicators of blight including vacancy, dumping, and fire damage.
"We were able to go beyond saying, 'There's a bunch of stuff out there that's wrong,'" says Paffendorf. "[Surveyors] identified just about 50,000 clearly vacant properties and another 10,000 structures that had indicators. It was like turning the lights on in a dark room, being able to plan and strategize and budget for the first time and getting a sense of the scale of the work that needed to be done."
Additionally, LOVELAND has been creating its own unique reports, accessible here
, which combine writing, interviews, and photography in a beautifully packaged report that surveys everything from every single structure-damaging fire, every single public park and recreation space, every single tax-foreclosed home in a specific neighborhood hit particularly hard by the foreclosure crisis, and so on.
"We're taking that raw data and trying to wrap it in a story, with photography and interviews, and packaging it for people," he says.
These reports also demonstrate what LOVELAND is able to do with their Site Control
tool, which Paffendorf describes as "Google docs for property information." It allows anyone to do their own version of Motor City Mapping, containing all of the information they have on the public site where subscribers can create their own survey questions, make as many maps as they want, and invite collaborators. Customers range from property management companies to blight task forces, land banks to neighborhood development corporations, and a whole range of people with professional needs or personal interest in working with real estate. Many cities are also surveying themselves to see what their actual inventory of properties consists of.
Site Control subscriptions cost anywhere from $100-1000 per month, and LOVELAND also provides additional services and customized projects for a city or group that might want additional functionalities or customizations.
Who owns the world?
Originally LOVELAND planned on doing the comprehensive surveying for Detroit because of Detroit's unique housing problems. Now LOVELAND's goal is to map every single parcel of property in the country – all ~22,000 cities and towns in all 3,143 counties in all 50 states.
They currently have parcel data for about 60 percent of the counties in the U.S., which all comes from team members calling, emailing, and writing letters every single day to counties requesting this information, assembling the information where possible, noting if they don't have something and why they don't have it (like if they were told to scram or that it would cost $50,000 to retrieve the information).
"Our mission is ultimately to map every property on the planet as it becomes reasonable," Paffendorf says. "Right now we're focused on the U.S. We'll pull together all publicly available information on every property in the country in one interface where anyone can look at it and start answering the questions like, 'Who owns everything? What opportunities are there for me to invest in? What land and policy issues can be improved? How can taxing be better levied? How can housing be made more accessible?' Our goal is to make all that information free on that interface. Anyone who wants to go beyond that information can subscribe to Site Control, and that's how we'll make money as a business."
And this is how LOVELAND has been able to make their passion their business. "We're not strangers to spending money or making money now," Paffendorf jokes. "We have a fairly large staff – 18 people – and there's health insurance and all of that. It's not like there's two people Ramen-ing it out now."
That wasn't always the case for them. For many years LOVELAND was just three people "surfing a problem and surfing an opportunity." It was very feast or famine, and most of their business had been in Detroit. "Motor City Mapping was a big driver, but we're transitioning now. A majority of our revenue comes from places outside of Detroit," Paffendorf says.
Detroit can be a fickle mistress, with individuals and companies subjected to the every-shifting social and political winds of change. "Foundations and philanthropy supported a lot of our work, but you never know how the tea leaves will turn. Now we want to be a nationally-known company."
The intersection of private and public
Given the nature of their work, it is extremely advantageous, if not outright necessary, for LOVELAND to work in harmony with city, county, and state governments. But, as Paffendorf understands better than many, it can take a long, long, long
time to work with government directly.
"It can be a real pain in the neck sometimes, I say with a smile and a finger wag," he jokes. But given his unique position as an entrepreneur dealing directly with city and county governments – what many other entrepreneurs often bemoan as more bane than boon – and addressing the tax foreclosure phenomenon, a unique government issue, Paffendorf is perhaps also in a unique position to act as a liaison between these oft-disparate sides.
"Our concept only works if we get good information to give to people," he says. "One reason to have a better relationship -- where you understand [governments'] challenges and constraints -- is so you have the rapport to access information, even though legally you shouldn't have to because it's public information. As we get more mature and understand the way the world works, we've learned you need to be able to have these relationships and understand the carrots and sticks of political actors."
Which is why Paffendorf was inspired to throw his hat in the ring for the position of Wayne County Treasurer, when Raymond Wojtowicz, the man who held that position for 39 years, announced that he would be retiring from his post at the end of 2015.
"We assumed just by tracking tax foreclosure, people will stop it. Again, it's like the lights turned on in a dark room," he explains. "We were certain just by making the information much more available and by showing the scale and the trends it would lead to some sort of political, social, and policy change quickly, and it hasn't.
"What we found was that there was a lot of, 'Oh, gee-wizz'-ing, and 'We should do something,' with nothing being done. This is causing us to be a little more active in trying to help broker some changes in how policy is enacted. It requires marrying the data to community engagement, to people
, and making them speak a more common language. We could just do it independently, from a distance, but we just didn't see things changing that way; that's what led to this now.
"I've learned enough to understand the various ins and outs and understand the political actors. If you want to see a change happen you can't help but try to figure out a way to get involved, and not just tossing platitudes and general ideas at politicians. Knowing enough to know the people and connect the dots is essential."
The futurist's solutions for the future
Ultimately Richard Hathaway, chief assistant to Wayne County Prosecutor Kym Worthy and a former Wayne County circuit judge, was appointed to finish out Wojtowicz's term as treasurer (like Paffendorf, Hathaway referenced the tax foreclosure crisis
as a critical point of focus for the position), but Paffendorf still hopes to be involved by meeting with Hathaway about the strategies he outlined in the plan he turned in as part of his bid for treasurer, accessible here
"The county treasurer forecloses on tens of thousands of buildings with no recognition of what is what and no different treatment between the two things. A mom and dad with three kids will get foreclosed on and the action is the same as a smoldering pile of rubble. No one wants to see it happen, but no one knows what can be done differently about it. My proposal is to visit all of these properties and then categorize them into some simple buckets: vacant lot, falling down house, occupied home, etc. We'll have local people knock on the doors of occupied homes."
If the owner doesn't feel like they can get out of the foreclosure, Paffendorf suggests the Detroit Land Bank Authority take a more proactive role in connecting them to programs that will help them to stay in their homes so people know they're not just being left out in the cold, as well as relocation assistance when they simply cannot stay. He also suggests that the occupied homes be treated differently at auction, and not just sold to the highest bidder.
"These are people who have paid off the whole damn mortgage and put $20,000 into fixing up the home, then fell behind on taxes. Then someone else buys it as an investment, evicts them, and there's another vacant home in Detroit. Seven out of 10 homes that grandmas are forced out of end up becoming vacant properties.
'I bundled my plan up with a bow for them, but I don't want to muscle them into it," he says. Currently there are plans in the works for Paffendorf and Hathaway to meet and discuss his suggestions more in-depth, but regardless of the outcomes of any future conversations, Paffendorf will continue his advocacy work in tax foreclosures while attempting to the question, "Who owns the world?"
This profile was originally published by Urban Innovation Exchange in partnership with Meeting of the Minds and the Kresge Foundation. For more stories of people changing cities, visit UIXCities.com and follow @UIXCities.