Detroit's council turns down relief plan for overtaxed residents

Christine Ferretti
The Detroit News

Detroit — City Council on Tuesday narrowly rejected a resolution to give residents potentially overtaxed before 2014 priority in affordable housing, home-buying discounts and job opportunities because a majority of members said it didn't go far enough. 

The plan — opposed by tax justice groups and several council members who argued it fell short of providing meaningful relief — sought to offset losses from 2010 to 2013 as part of an effort to address an estimated overtaxing of $600 million for Detroiters over a six-year period through 2016. 

Council members voted down the resolution by a 5-4 vote after lengthy discussion. President Brenda Jones, Pro Tem Mary Sheffield and members James Tate, Raquel Castañeda-López and Roy McCalister Jr. voted no.

The resolution included eight preference programs to be funded with a one-time $6 million appropriation of surplus dollars from the city's 2020 fiscal year budget.

Bernadette Atuahene, a professor at the Chicago-Kent College of Law, speaks during a press conference at the Coleman A. Young Municipal Center, in Detroit, Feb. 13, 2020, to announce a class-action lawsuit against the city for the overassessment of home values for thousands of homeowners.

Prior to the vote, Castañeda-López said the offerings didn't adequately address equity and provide new support for the population that needs it, rather than "dividing up the crumbs that exist already" among an even larger group of vulnerable residents.

"It's using existing programs that are limited in scope," she said, "to pit marginalized communities against marginalized communities.

"Six million dollars might sound like a lot, but it's really insufficient."

Sheffield, who has fought alongside the Coalition for Property Tax Justice to aid impacted homeowners, said the years covered under the proposal should be expanded to run from 2008 to 2016. 

On Tuesday, she urged for an amendment from the Duggan administration to "acknowledge those critical years."

"Those years, people are justified to be compensated and to be included, the data clearly shows it," she said. "To exclude those dates just sends a bad message to individuals that were overassessed."

Tate noted the timeline has been "a point of contention" that is "stuck in the psyche of the general public."

McCalister said he felt strongly Tuesday that the years need to be extended to cover more impacted residents. He said he's confident the administration will work with the council on a revised plan.

John Roach, a spokesman for Mayor Mike Duggan, said in a statement that the mayor campaigned against assessments when he first ran for office in 2013 and cut them across the city by 20% as soon as he got into office.

"If City Council is able to agree upon additional benefits that are within the law and budget, we will support them," he said. 

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. 

Detroit's Group Executive for Planning, Housing and Development and the Office of the Chief Financial Officer developed the four-year program in partnership with five council members to address failures to properly assess residential properties in the city.

Detroit's chief financial officer, David Massaron, and Arthur Jemison, the city's group executive for Planning, Housing and Development, defended the three-year period.

Jemison stressed the administration has been focused on moving something forward now, and if new information suggests that more years can be included, the council can count on the administration to bring it back at a later time. 

Jemison, in response to Castañeda-López's concerns, said the situation has been a high priority for the administration, and officials have attempted to respond in earnest.

"There's not a lot of money out here," he said. "It's always a challenge to prioritize among folks. I'm eager to get started in delivering benefits to people because that's what I think this is about."

The preferences included under the Duggan administration's resolution included a  discount of 50% on Detroit Land Bank Authority side lots or any auctioned house — including those being rehabilitated under the city's voter-approved $250 million blight bond initiative.

Detroit would be given 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. It also extended preferential access to Detroit at Work job searches and career services, financial counseling and affordable housing. 

The priority access would have been in place for impacted Detroiters until Dec. 31, 2024. 

Bernadette Atuahene, a law professor member of the Coalition for Property Tax Justice, reiterated Tuesday the dates "do not accord with the data" and a vote in support would be "immoral" and nothing more than helping Duggan "avert political responsibility."

After the vote, Atuahene said the council's inability to make amendments was the "death nail" for the resolution. The outcome, she said, is a good one.

"The only thing that happened is this particular version is not getting passed on this particular day," she said. "This version did not accord with the truth."

In January, she said, the coalition will fight even harder for a resolution that aligns with the facts and "is not a lie."

Massaron and Jemison defended the three-year period. In a written response to the coalition last week, they said the gap between home prices and assessments was largely closed in 2014, when assessments were dropped after Duggan took office, despite property values increasing at that time.

"If someone were to acquire a home in 2014, their home would have been adjusted to values that sale indicated along with similar transactions," they wrote. "Effectively, a homeowner of a newly acquired home in 2014 would receive the benefit of an adjusted value on their home tax bill and would dilute the value of the benefit for those who owned homes during 2009 to 2013."

The administration's resolution was co-sponsored by five Detroit council members, including Janee Ayers, Tate, McCalister Jr., Scott Benson and Andre Spivey.

Ayers noted Tuesday that some funding has been identified to try to offer something to those who suffered financial losses from the overtaxing "puts us in a better place."

Southwest Detroit resident and fellow tax justice coalition member Erin Stanley said the fight against overassessments and foreclosures has been long and personal.

"My parents were overtaxed almost $7,000 by the city, and when they couldn't keep up, the county foreclosed on more than our house," Stanley said. "This is a trauma that my family and thousands of others in the city are still healing from financially, spiritually, and emotionally."

Stanley said compensation is a "critical step" but so is "holding our government accountable for this abuse." 

Resident Yolanda Jackson added the legacy of Black homeownership in Detroit has been destroyed, and $6 million was a "slap in the face," representing only 1% of what was taken from Detroiters.

Massaron has said the city isn't in a position to pay refunds, as sought by some activists and impacted homeowners. 

The CFO made note Tuesday of programs initiated and expanded to help Detroit residents struggling with foreclosures to retain their homes. 

Jones said she herself was impacted by overtaxing at two different residences. Some residents, she said, have concerns that things being extended under the resolution won't help them. 

They might not have the need, she said, for senior home repair or have children that need jobs.

"While they overpaid taxes, none of these things affect them," she said. "But still, they overpaid taxes by thousands and thousands of dollars."