A county program intended to avoid tax foreclosure has thousands of Detroiters -- nearly one in four enrolled in the program -- even deeper in debt, owing more in delinquent taxes than they did when they enrolled, The Detroit News reports.
Describing the "payment plan purgatory" these homeowners are in, reporters Christine MacDonald and Mark Betancourt write:
A look at some of the first homeowners to enroll in the county's low-interest payment plans shows almost 40% — nearly 4,700 homes — either have been foreclosed or are off their plans and at risk of foreclosure next year, according to The News' review of county data as of mid-September. The analysis tracked the progress of nearly 12,000 properties with about $68 million in property tax debt over the last three years.
About 23%, or about 2,700 of the properties The News followed, have more debt than they did three years ago, many after owners fell behind on additional tax bills. Some have rolled that new debt into their plans, while others have missed monthly payments and simply started a second plan.
“It's like a revolving credit card,” said Roderick Randolph, who has been on two payment plans on his childhood home and owes $4,500 to the county, about the same the substitute teacher owed three years ago. “You can pay a minimum. You'll never get out of the hole.”
The program is credited by county officials with keeping more people in their homes and reducing tax foreclosures, which often leads to increasing blight in neighborhoods. However, given that people who fall behind in their property taxes are often poor to begin with, payment plans are simply another bill to pay in a stack of them:
Housing advocates warned for years the low-interest plans weren't going to get people out of debt in Detroit, the nation's poorest big city with more than a third living below the federal poverty level. And they argue officials should have done more -- mainly, forgiving the debt -- because City Hall caused much of the problem, with years of admittedly inflated tax assessments that precipitated a state-takeover and an inaccessible tax break for the poor.
Wayne County Treasurer Eric Sabree and Detroit Mayor Mike Duggan have acknowledged as much, and are asking for state legislation that would allow more tax debt to be forgiven.