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n the Motor City, a cryptocurrency real estate marketplace has made a bold bet on Detroit's future. But its anything-goes ethos has created chaos for tenants and left many without safe housing. RealT, a Florida-based company, has outsourced property management to local firms, but remote oversight has been disastrous.
For Shirquera Ayers, a single mother of two, the problems with her eastside Detroit home are piling up. The shower knobs don't work, the toilet overflowed in 2023, and black mold is growing on the walls. Despite putting in multiple work orders, nothing has been fixed. "I've been complaining for years, but nobody has ever come out," she said. "As far as I can tell, they're slumlords."
Ayers' home is just one of hundreds of properties owned by RealT's real estate arm, Michigan Realtoken. The company has racked up over 1,000 blight tickets in a few years, most of which are unpaid. Ayers feels trapped by the low rent and can't afford to move her family.
RealT's business model is built on selling "fractional ownership" of properties to overseas investors through an online marketplace. But this has created a complex web of ownership, making it difficult for tenants to know who to pay rent to or hold accountable for repairs. The company claims to have sold tokens for over 1,500 properties worldwide, but critics say the model is inherently speculative and lacks accountability.
The Jacobsons, RealT's co-founders, blame former property managers for their problems and claim they're working to clean up the mess. However, county records show that hundreds of their properties are in danger of tax foreclosure, and the company owes the city over $2 million in unpaid taxes and blight tickets.
As the cryptocurrency real estate market grows, experts warn about the risks of tokenization. Andrew Baum, a University of Oxford professor, calls it "unconvincing economics" and expresses concerns about accountability. "There's all sorts of terrible, dystopian scenarios you can imagine with crypto in real estate," he said.
For tenants like Kimberly West, who received an eviction notice from New Detroit PM LLC, the situation is dire. She feels uncomfortable entering personal details online without signing paperwork in person and has had sleepless nights worrying about losing her affordable rent. The Jacobsons claim they're not pushing for evictions, but soon after speaking with them, tenants received letters warning of eviction.
As the city struggles to address its housing crisis, RealT's tokenized properties have become a symbol of the chaos created by speculative investing. While the company claims to be working to improve communities, critics say their actions mirror those of Detroit's notorious speculators: buying up homes on the cheap and leaving them to deteriorate or head to tax foreclosure at the expense of tenants, neighbors, and the city.
