Detroit Area Tax Foreclosures

Jul 31, 2017

Since 2002, Wayne County, which includes Detroit, has foreclosed on, seized and auctioned 160,000 homes for non-payment of property taxes. From 2011 to 2015, one fourth of Detroit properties have similarly been foreclosed upon.

A new yet-to-be-published study shows that Detroit’s assessor’s office assessed as many as 55% to 85% of properties above the limit set by Michigan’s Constitution. It says that properties cannot be assessed at more than 50% of their market value. But in 2010, the study found the city assessed properties on average at seven times that limit, or in other words at 350% of their true value!

The study was co-authored by a visiting Wayne State University professor Bernadette Atuahene and an assistant economics professor at Oakland University.

In response to homeowners’ complaints and efforts by Atuahene and various community groups opposing the outrageous assessments, the city made some minor changes. The assessor’s office carried out a reassessment of 250,000 residential properties. The city recently announced property taxes would go down by as much as 10 percent this year, in addition to reductions of 5 to 15 per cent last year for most homeowners.

These small cuts do nothing, however, for those who already lost their homes due largely to the illegal assessments. Many of those foreclosed upon should also have been exempt from property taxes altogether because their incomes were below the poverty level, but neither the city nor the county made any effort to inform them of the fact.

The city has offered interest rate reductions to some 50,000 homeowners who owe taxes, but that amounts to “too little too late” for most. As Atuahene put it, “They’re putting you on a payment plan for taxes you shouldn’t have to pay in the first place.”

Community groups have proposed compensation for victims of tax foreclosures due to illegally high assessments. Detroit Mayor Mike Duggan says he won’t consider reimbursements or reparations for such homeowners because he says they could have appealed the assessments. In other words, he defends the theft of the homes of people, many of them poor with little access to legal help, with what amounts to “Let the buyer beware.”

These tax foreclosures seem like part of a deliberate attempt to push the poor out of the city of Detroit. Maybe they simply are the result of the city trying to balance its budget on the backs of the poor while giving tax breaks to the big corporations and huge handouts to the banks. But the result is the same. The so-called “comeback” of Detroit is nothing but outright theft.