July 23, 2014 at 11:07 am

Detroit Land Bank's dilemma: How to handle squatters in foreclosed homes

Joseph Garrett is hopeful he can stay in the Alden home his family lost to tax foreclosure. The land bank now owns it. (David Coates / The Detroit News)

Detroit — A woman living tax-free in a city-owned house drove up in a BMW this month to find eight police officers, two utility workers and an attorney in the front yard.

It looked like her time was up occupying the well-kept west-side brick colonial that Wayne County foreclosed on two years ago. But in Detroit, even cases that neighbors view as flagrant squatting are rarely clear-cut.

County officials say the former owner didn’t pay nearly $17,700 in taxes, instead presenting them paperwork contesting the bill and the county’s right to levy it. She has outlasted two foreclosure buyers who tried to take possession of the home.

And she was able to avoid eviction again, despite the unusually large police presence. She went inside to make a phone call and then refused to leave the home on Longacre near Glendale. Authorities left to avoid a confrontation, they said, but not before towing a Lexus and Saab they say were illegally parked.

The fizzled showdown has neighbors like Bryan Ferguson frustrated and hoping for stronger action.

“You have to draw a line in the sand,” said Ferguson, whose Schoolcraft Improvement Association works to oust stubborn squatters. “We all have to pay our fair share.”

The current owner of the home, the Detroit Land Bank, is wrestling with how it will deal with the hundreds — and perhaps thousands — of people living in city-owned properties it is supposed to get back on tax rolls or demolish. About 1,800 of the 8,600 houses currently owned by the authority were likely occupied as of December, according to a Detroit News analysis of data from the city’s Blight Removal Task Force.

Does the city evict the occupants and resell the homes? Or does it try to strike a deal with occupants — whether they’re squatters, renters or former owners who didn’t pay their taxes? Officials hope to come up with a plan later this year.

“(Evicting people) is not our main interest,” said land bank attorney Kevin Simowski. “We are brainstorming right now. We are going to be considering a lot of different options. We want to have a clear, transparent and consistent policy.”

The showdown on Longacre was another episode in a long paper trail of interactions between the former owner and Wayne County officials. The land bank, which has the authority to evict occupants of its properties, has not exercised that power, but officials said occupants in two houses left on their own after being informed that the properties were city owned.

The number of lived-in homes under land bank control is only going to grow. Last month, the treasurer sued the owners of 22,700 tax-foreclosed properties, mostly in Detroit, that owe taxes. The land bank is set to inherit in January the properties of owners who don’t pay.

Status quo for occupant

Until the land bank comes up with a plan, its officials say they have no plans to try to again evict the Longacre occupant.

The woman in the BMW identified herself to a reporter as “Ms. Moore” but declined an interview. She later sent a text message arguing the property is owned by a trust and that the taxes were paid, accusing the county of erroneously foreclosing.

“I Ms. Moore don’t have any ties with any organization or groups that are subversive,” the text message read. “The issue is (the city) attempted an illegal eviction through threat, duress and coercion.”

City records indicate the bills weren’t paid. Wayne County Chief Deputy Treasurer David Szymanski said his office properly foreclosed on the property in 2012. The county generally lets the auction buyers handle evictions. But two recent buyers got their money refunded because the occupants on Longacre refused to leave, Szymanski and one of the buyers told The News.

Much like the Longacre house, most of the occupied land bank homes — nearly 1,300 — are in “good” condition, according to the blight task force’s survey. That would make them prime candidates for the land bank’s auction, which has generated much attention recently for selling homes to the highest bidder after giving tours. But officials say they’ve only focused so far on selling vacant homes.

Others would be harder for the city to sell, like the 900-square-foot two-bedroom home Joseph Garrett’s family lost to tax foreclosure. The land bank owns it, with its leaky roof and busted furnace.

The west-side home on Alden near Puritan failed to sell at the tax auction last year, despite its opening bid price of $500. But to Garrett it is all that is keeping him from living on the streets. He’s hopeful he can stay.

“What’s going to happen to me?” Garrett said, who didn’t pay the $10,600 debt on his father’s house after he died in 2011. “I am not bothering anybody.

“I am just trying to stay above water.”

For three years, he’s used a kerosene heater in the winter to heat the home for him and his two dogs, Sheba and Shack. Garrett is unemployed but plans to start a job soon taking care of two seniors in their homes. He said with the new income he hopes to pay future taxes and repair the house.

“I get up every morning wondering who is going to come by and tell me to get out,” he said. “I want to stay here. I will do whatever it takes to stay here. I will work with the city. I basically have nowhere else to go, and who wants to be homeless?”

Houses sold for $500

Foreclosed properties have been sold to occupants before. The treasurer in 2012 sold dozens of its unsellable properties to occupants, including tax scofflaws and squatters, for as little as $500.

Szymanski said it wasn’t ideal, but it was the best option at the time to stabilize the affected neighborhoods.

“You don’t want to reward people who don’t pay taxes but you don’t want to punish anyone either,” Szymanski said.

Ted Phillips, of the nonprofit United Community Housing Coalition that helps needy families keep homes, has urged the land bank to look at the cases individually.

Often, squatters or former owners have made needed repairs to homes rather than pay taxes, said Phillips, who also argued that in many cases the houses have been over-assessed. The city has admitted problems and is going through a citywide re-assessment now.

Ferguson, the homeowner who lives two blocks from the Longacre house, said if people can’t pay taxes, it usually doesn’t benefit anyone to let them stay.

“If the house is run-down and falling apart, then why would someone want to live there,” Ferguson said. “In some cases, renting would be better for a lot of people.”

Another neighborhood resident, Jason Buckens, said he wants the land bank to work with occupants. His west-side bungalow went into foreclosure last year because, he said, a mortgage company never sent the city the money he had paid every month for property taxes.

“You are already trying to get people to stay in the city,” Buckens, who said he mows six abandoned lots every two weeks in the neighborhood. “You need to create a program so people can get the houses.

“We are good for the neighborhood, and we deserve a chance to stay in the houses.”

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After an occupant refused to leave a house on Longacre, two cars were ... (Max Ortiz / The Detroit News)
Jason Buckens' bungalow on Alden went into foreclosure last year because, ... (David Coates / The Detroit News)