It's known that Detroit's tax foreclosure crisis is partly the fault of government: The city admittedly failed to properly bring down property assessments in the wake of the Great Recession, forcing cash-strapped Detroiters who coudn't pay inflated tax bills out of their homes or onto debt payment plans with added interest and fees. One in three city properties have been tax-foreclosed since 2008.
But The Detroit News, with help from Reveal from The Center for Investigative Reporting, has for the first time quantified the extent of the problem. The findings are astounding.
From 2010-16 the city overtaxed homeowners by at least $600 million, their reporting finds. Of the more than 63,000 homes that are behind on their bills today, more than 90 percent were overtaxed by an average of at least $3,700. In neary two-thirds of those cases, the amount the homes were over-billed exceeds what they owe in taxes today.
The Duggan administration in 2017 conducted a citywide property reassessment that has brought values in line with reality. But it has stopped short of offering a remedy to unduly burdened residents.
“At the end of the day, a number of residents over the last decade have paid their taxes,” [Duggan's Chief Financial Officer, Dave] Massaron said. “Over-assessed or not, they paid their taxes. And we need to be sensitive to the fact that those residents paid into the continued city operations.”
Lawmakers, researchers and activists have proposed putting a moratorium on foreclosures and wiping residents' past debts.
The city is instead pushing a plan that would only eliminate most of the past debts on households living near or below the poverty line. The proposed Pay As You Stay program requires eligible residents to file for a poverty tax exemption and pay monthly payments for three years. It still has to pass the state Senate.