Blight Inc. -- Indianapolis Star

Blight Inc. -- Indianapolis Star

The sale of abandoned homes for just enough to pay the outstanding tax bill has created a perverse incentive for investors who buy these homes to walk away from them, abandoning them once again, and further blighting the neighborhood, according to a detailed investigative report.

"Frank Alexander, a professor at Emory Law School who has studied tax sales across the country, was not surprised to hear that investors like Mt. Helix were leaving houses empty.

"'Indiana has a broken system,' he said. 'It actually creates incentives for passive investors.'

"He said government tax sales don't function like normal markets. They're designed only to collect taxes, not necessarily to seek a fair market price for the property. As long as the taxes come in, the government doesn't mind giving up the homes for less than they are worth.

"People often can pay $2,000 to buy a property that's worth $10,000, said Alexander, co-founder of the Center for Community Progress, a blight advisory group. 'Well, all I have to do is sell it for $6,000,' he said. 'Then I get a 300 percent rate of return.'"