Tens Of Thousands Threatened With Property Tax Foreclosures In Detroit

The time ran out for thousands of homeowners in Detroit on March 30, the deadline for Wayne County residents to pay back property taxes from 2019 or face foreclosure.

Wayne County Treasurer Eric Sabree issued a two-year foreclosure moratorium due to the covid-19 pandemic. The pandemic has had a disproportionate impact on area residents, particularly African Americans, who make up approximately 80 percent of the Detroit population, Global Research reported.

In early 2022, county officials sent out 72,000 foreclosure notices to homeowners who had fallen behind on property taxes. Some 62,000 of them were in Detroit alone. According to officials, about 18,000 of these properties are occupied, NPR reported.

According to the Moratorium NOW! Coalition, more than 17,000 homes are being threatened with seizure.

“There is no reasonable cause for the home seizures to resume when many households have not recovered from the economic and social impact of a public health crisis not witnessed in more than a century,” a statement from the community advocacy group read.

Homeowners in Detroit have faced a similar foreclosure crises before. During the Great Recession from 2007 to 2010, Detroit and the state of Michigan were at the epicenter of the economic downturn. As a result, vast numbers of homeowners had their homes foreclosed on. 

Sabree said there will not be another moratorium because Detroit’s property tax revenue had already been allotted.

“We pledge all the penalties and fees in our bond pledges to borrow money,” he said. “We can’t do a moratorium on police protection or fire protection.”

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However, right before the moratorium deadline, a judge on March 29 halted the foreclosures of some homes in Wayne County.

The ruling will keep some owner-occupied properties in Wayne County from tax foreclosure through March 2023.  

The order by Wayne County Circuit Judge Timothy M. Kenny will not apply to property owners with tax debt in 2016 or prior and does not include nonowner-occupied properties, such as rentals.

In January 2022, a Detroit News investigation revealed that between 2010 and 2016, homeowners in the majority-Black city of Detroit were overtaxed by at least $600 million.

Although the Michigan Constitution states that no property can be assessed at more than 50 percent of its market value, Detroit assessed 55 percent-to-85 percent of property in violation of that law, The Detroit Free Press reported.

As a result of this overassessment, activists say 100,000 Detroit residents lost their homes in a city of 635,596 people.

City Hall completed a state-ordered reappraisal of every residential property in 2017 to correct the problem, but thousands today still face foreclosure over back taxes

Photo: Homeowners wait for their cases to be heard to avoid foreclosure from tax debts in Detroit, Jan. 29, 2015. (AP Photo/Paul Sancya)

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