Tax justice group calls on Detroit to fix 'unfair' property assessments

Charles E. Ramirez
The Detroit News

Detroit — Community activists Wednesday celebrated thousands of Detroit and Wayne County homes spared from tax foreclosure this year amid the pandemic and renewed a call for Detroit officials to halt inflated property tax assessments that they contend have fueled the problem.

Tax foreclosures were put on hold in Wayne County in 2020 due to the COVID-19 crisis. The county continued its moratorium this year, sparing about 2,400 homes from foreclosure, noted the Coalition for Property Tax Justice, a grassroots group that advocated for the extension.

"We are here to celebrate those brothers, those sisters, those grandmothers and those grandfathers ... our neighbors ... who were saved from foreclosure in 2021," said Bernadette Atuahene, a visiting Wayne State University professor and lawyer. "Today is about celebrating that victory.

(from left) Detroit City Council President Pro Tem Mary Sheffield listens to Detroit residents Joseph Bates and Sonja Bonnett speak about unjust home foreclosures during a news conference hosted by the Coalition for Property Justice in Detroit on Wednesday, July 7, 2021.

"But today is also about demanding Mayor (Mike) Duggan provide compensation for those families who have already been evicted from their homes due to illegally inflated property tax assessments," she said. "We are here to demand justice for those families."

Atuahene made the remarks Wednesday during a news conference outside a home on Schoenherr Road near Seven Mile on the city's east side alongside Congresswoman Rashida Tlaib, D-Detroit, Detroit City Council President Pro Tem Mary Sheffield, activists and Detroiters who have lost homes to foreclosure.

Both Tlaib and Sheffield are supporters of the coalition, which formed in 2017 to stop inflated property taxes, and have called for changes to the city's system for property assessments. 

A January 2020 investigation by The Detroit News found that Detroit failed to accurately bring down property values in the years following the Great Recession and overtaxed homeowners by at least $600 million over a six-year span from 2010 to 2016. 

Detroit completed a $10 million state-ordered reappraisal of all residential property in 2017 to correct its overassessment problem but, still, thousands of Detroiters faced foreclosure over back taxes.

Of the more than 63,000 Detroit homes with delinquent debt in fall 2019, more than 90% were overtaxed, by an average of at least $3,700, between 2010 and 2016, according to calculations by The News. The debt owed on about 40,000 of those homes is less than the properties were overtaxed over those seven years, the investigation revealed. 

"The city continues to fail its homeowners and its duty to make amends," Tlaib said Wednesday. 

Sheffield, who represents Detroit City Council District 5, added the fight against inflated tax assessments is far from over.

"To date, the city has not made any recommendations on how to resolve the issue," she said. "Our lowest valued homes are still be over-assessed. And this isn't just a local city and county issue. We need our state legislators to come in. We need everyone on deck to fight this issue."

Detroit City Council President Pro Tem Mary Sheffield speaks about property taxes and home foreclosures during a news conference hosted by the Coalition for Property Justice in Detroit on Wednesday, July 7, 2021. Advocates demand Mayor Mike Duggan stop over assessment of Detroiters property resulting in unjust foreclosure.

Detroit City Council last fall narrowly rejected a resolution from Duggan's administration 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 the tax justice group 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 the overtaxing of Detroiters. 

The resolution, defeated by a 5-4 vote, 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

Duggan's office said this spring that it is working with council to try to develop a revised plan. 

Detroit's Deputy Mayor Conrad Mallett said Wednesday the city is grateful that the Wayne County treasurer's office put a stop to the foreclosures of occupied residential properties during the pandemic. 

"We join others in celebrating the fact that these residents now have additional time to save their homes," he said. "With this additional time, we have an opportunity and a mandate to make sure that homeowners with delinquent taxes take advantage of the tools that can permanently stop foreclosure and eliminate their debt."

Mallett urged low-income homeowners to complete the city's Homeowners Property Tax Assistance Program to eliminate current-year taxes and qualify for the Pay As You Stay program, or PAYS, to reduce and eliminate delinquent taxes.

A 2020 study released in March by Christopher Berry of the Center for Municipal Finance at the University of Chicago concluded the city's residential property tax methodology continues to harm Detroiters.

Duggan and Detroit Assessor Alvin Horhn have pushed back on Berry's findings, saying the gap between home prices and assessments was largely closed in 2014 when the mayor took office and reduced assessments. The administration has said it doesn't believe overassessments are still happening in Detroit but stressed that assessments vary by neighborhood. 

Horhn in March acknowledged he's "painfully familiar" with the assessment failures in Detroit's past and it took a lot of time and money to fix them. But the city has vowed not to let it happen again, he's said. 

Detroit, Horhn has said, is "an open book" and welcomes any warranted examination by Wayne County equalization officials or the state's tax commission. 

Resident Joe Bates is among the residents who lost a home to foreclosure over the city's tax assessments.

On Wednesday, his east side home served as the backdrop for the news conference. He was able to secure it with aid from the coalition, he said. 

Bates contends the city "illegally and unfairly" took his former home in southwest Detroit by inflating the value. The house had been in his family since the early 1900s, he said.

"This is not how humans are supposed to treat each other," he said. "This is not right. We're losing our homes and our property, things that our families worked for and built."

For information about the property tax assistance program, call (313) 224-3011 or the Detroit Property Tax Relief Fund at (313) 224-0274.

Twitter: @CharlesERamirez