Lansing— Lawmakers are considering additional blight legislation a Detroit state senator says would help his city by preventing profiteers from recycling blighted properties while avoiding taxes and penalties they owe.
At a committee hearing Thursday, Sen. Tupac Hunter agreed to meet with banking and real estate industry representatives to refine his bills to block bad actors from tax foreclosure auctions and streamline the process by which vacant properties are moved into municipal land banks.
Brad Ward, public policy and legal affairs vice president for the Michigan Association of Realtors, cautioned some proposed provisions, while good for Detroit and other blight-troubled cities, could hinder turnover of foreclosed property in areas of Michigan not troubled by urban problems.
Senate Banking and Financial Institutions Committee Chairman Darwin Booher, R-Evart, described the legislation as “a work in progress,” but said he wants to treat it with some urgency.
Lawmakers passed a series of anti-blight bills late last year, but Gov. Rick Snyder has called for additional legislation. In his State of the State message Jan. 16, Snyder acknowledged last year’s effort while urging the Legislature to close remaining loopholes. He cited Hunter’s Senate Bill 295.
The two measures would:
■Prohibit participation in a county foreclosure auction by anyone who had gone through a tax foreclosure within the last three years or had unpaid penalties from blight law violations. This proposal aims to block delinquent taxpayers from repurchasing their properties while avoiding monetary penalties.
A Detroit News investigation discovered that to be a common practice, cheating governments out of tax revenue and allowing blight to continue. The loophole cost Detroit $1.8 million in uncollected taxes in 2010 alone, according to estimates.
■Allow fast-tracked land bank purchases of foreclosed tax-delinquent properties state or local governments declined to purchase. The authority would have to make a minimum bid including all delinquent taxes, interest, penalties and fees due on the property, as well as expenses associated with tax sales.
Hunter said his legislation takes a cue from Detroit Mayor Mike Duggan’s neighborhood plan. The plan, unveiled while Duggan was a mayoral candidate in September, calls for aggressive steps to seize or force owners to fix up abandoned/neglected properties, a more efficient plan for demolition of vacant houses and a crackdown on urban squatters.
“Blight poses a major threat to our communities, and the passage of this legislation is an important step for the city of Detroit and the entire state to improve our neighborhoods and promote public safety,” Hunter said in a statement issued Thursday.
The Detroit News found that 11 buyers bought 24 percent of tax-auctioned parcels in Wayne County from 2002 to 2010. Owners bought back 200 of 3,700 Detroit parcels sold in 2010 foreclosure auctions, including one owner who repurchased seven foreclosed properties on which he owed $131,800 in back taxes, Hunter noted.