Detroit proposes plan to give preference on housing, jobs for overtaxed homeowners
Detroit — The Duggan administration has drafted a broad proposal to give city residents potentially overtaxed before 2014 priority in affordable housing, home-buying discounts and job opportunities.
The city's Group Executive for Planning, Housing and Development and the Office of the Chief Financial Officer crafted the four-year program in partnership with members of Detroit's City Council to address the "systemic failure of the assessor's office" to appropriately assess residential properties in the city.
The proposed resolution — seeking to offset losses for homeowners from 2010 to 2013 — is a step toward addressing an estimated overtaxing of $600 million for Detroiters over a six-year period through 2016.
The plan includes eight preference programs to be funded with a one-time $6 million appropriation of surplus dollars from the city's 2020 fiscal year budget and won't require an additional tax levy on residents, the city said.
Among the programs, the city wants to extend a 50% discount on Detroit Land Bank Authority side lot purchases or any auctioned house — including those to be rehabilitated under a $250 million blight bond initiative going before city voters Nov. 3.
Detroit also would give preference in city employment as well as priority access and placement to summer jobs through the city's Grow Detroit's Young Talent program for children and grandchildren of eligible applicants.
Other areas include preferential access to Detroit at Work job searches and career services, financial counseling and affordable housing.
If approved, the preference for impacted Detroiters would remain in effect until Dec. 31, 2024.
Detroit's Chief Financial Officer David Massaron said Detroit isn't in a position to pay refunds, as sought by some activists and impacted homeowners.
"We need to be realistic about what the city can and can't do," Massaron said. "The only way we could write checks would be to levy a tax on Detroit residents. We would have to tax the very residents that were wronged."
Mayor Mike Duggan unveiled the plan Tuesday with cosponsors from Detroit's council on Tuesday to restore some of what was lost by the city's legacy of over-assessments.
“For many residents across Detroit, homeownership is the first step in building generational wealth and economic stability," Duggan said in a released statement. "Years of over-assessment took that from families, and this is an effort to ensure some of what was lost is restored."
The Detroit News in January published an investigation that found the city overtaxed homeowners after it failed to accurately bring down property values in the years following the Great Recession.
The city completed a state-ordered reappraisal of all residential property in 2017 to correct the problem but, still, thousands of Detroiters faced foreclosure over back taxes.
Of the more than 63,000 Detroit homes with delinquent debt as of last fall, more than 90% were overtaxed — by an average of at least $3,700 — between 2010 and 2016, the News' review found.
Bernadette Atuahene, a law professor member of the Coalition for Property Tax Justice, said the mayor's proposed end date of 2013 "is a blatant attempt to avert political accountability for the problem."
The end date should at least be 2016 based on the city's own data, she said.
Atuahene said the city failed to propose separate funding for affected homeowners, which forces them to compete for limited dollars with other victims of redlining and predatory mortgage lending.
"To avert this problem, (the) city must provide additional funding streams in addition to those that already exist," she wrote in an email.
Arthur Jemison, Detroit's group executive for Housing, Planning and Development, noted the money that came into the city under the overassessment was spent on road maintenance, operating community centers and a "litany of other critical things."
"The dollars have been spent and the question is when we think about how we make people whole, or how we work to address what was lost, we have to start saying 'what are the actual assets and value that we can bring to the table.'"
The resolution co-sponsored by five Detroit council members — Janee Ayers, James Tate, Roy McCalister Jr., Scott Benson and Andre Spivey — is expected to be voted on some time in November, Jemison said.
Council President Pro Tem Mary Sheffield, who has been vocal about pursuing efforts to make impacted residents whole, said Tuesday that the resolution is a good start but "it's not sufficient."
The support should be extended to homeowners impacted through at least 2017, she said.
Sheffield said she was surprised when the resolution was submitted Friday and intends to meet with Jemison later Tuesday to discuss modifications — including an amendment to increase the years covered under the plan — and resubmitting the resolution with Sheffield joining as a co-sponsor.
The plan already covers some of Sheffield's recommendations, including support for a state-level task force to examine non-city funding sources to possibly compensate individuals who were overassessed.
Sheffield also pushed for language that calls for the city to explore ways to offer tax credits for those struggling with current taxes if state law is passed and new state resources are available.
"I'm working with the administration to make some more changes and looking forward to submitting a new resolution that I will co-sponsor," said Sheffield, adding some of the programs outlined in the resolution won't work for struggling low-income residents.
The administration in January 2014 began reducing residential assessments by nearly $1 billion and put an end to the over-assessments, officials noted Tuesday.
"Since 2014, this administration has been making the investments and doing the things that we think are going to address this issue," Jemison added.
The city also invested more than $10 million in its citywide reassessment and increasing the assessor's staff by 50%. Citywide reappraisals are now required every five years under a council-approved amendment to the Detroit City Code.
The city on Tuesday also noted efforts to aid delinquent taxpayers and to allow those at-risk of foreclosure to get their property back for $1,000 and said over $5 million in property tax exemptions were provided in 2019 to more than 7,000 residents.
The city advocated for Pay as You Stay or PAYS, legislation and implemented a program in collaboration with the Wayne County Treasurer's Office to help eligible homeowners with delinquent taxes repay their debt. The PAYS program, which eliminates interest, penalties and fees and reduces back taxes, has helped over 3,400 homeowners this year, the city said.