Even before the recession, Detroit homeowners began to lose their homes through subprime deals and illegally and overassessed property taxes. By 2015 there were almost 25,000 tax foreclosures; this year it’s estimated that there are 4,700. Since it is estimated that one out of three is an occupied home this will further destabilize neighborhoods across the city.
In 2016 the ACLU of Michigan, the NAACP Legal Defense and Education Fund, and the Covington law firm filed a lawsuit to prevent more homeowners from losing their homes to illegal tax foreclosures. The lawsuit described two major causes of the foreclosures: Detroit’s failure to follow state law that property taxes be based on the real cash value of the home and it made it very difficult for poor homeowners to file for a “poverty exemption.”
At the beginning of July 2018 ACLU and the city settled by making the homeowners’ poverty tax exemption (HTAP) accessible in several important ways—by having the application on the City of Detroit’s Accessor’s website, by training all of its staff, by sending out notices, by simplifying the application process.
For those homeowners whose homes are up for the Wayne County auction this September and October, the city imposed a month’s deadline for owner/occupants to apply for a “buy-back” program outlined in the settlement. Those eligible for a poverty exemption in any year between 2014-17 but who didn’t receive one could bring their deed along with specific financial information. They were to take that paperwork to United Community Housing Coalition (2727 Second Avenue, Room 313. This is near Masonic Temple and Cass High School. 313-963-3310, ext. 339; firstname.lastname@example.org).
Community activists put enough pressure on the mayor’s office so the deadline was extended to August 24—merely one month more to reach an estimated 700-1500 families. A more obvious solution to keeping people in their homes would have been to pull all occupied residential properties from this year’s auction.
Although the city supposedly sent a mailer to every house that is on the 2018 auction website, many homes did not receive the information. Detroit Eviction Defense, along with many other community organizations, used Loveland maps to canvas these homeowners. As a result of the mailer, public service announcements and canvassing, 500 homeowners and renters were able to get their homes out of the auction!
While that is 500 families who do not face eviction this year, the number represents just one-third of the homes up for auction. And if 1,000 more families end up being evicted, it will further destabilize neighborhoods.
Both the poverty exemption and buy back program will continue–although the buy back is contingent on the city dedicating funds for it. As for the exemption, approximately 30,000 households meet the requirement for obtaining HTAP, but few have known about the program. In 2017 only 5,500 homeowners were able to get their application approved. With the city’s official poverty rate standing at 34.5%, let’s make sure HTAP is widely known and applied for. (It is only given for one year.)
Unfortunately the ACLU-city settlement did not address restitution for those who lost their homes in the past through illegal tax assessments.