'No more crumbs': Overassessed Detroit homeowners deserve compensation, officials say

Jennifer Chambers
The Detroit News

Byron Osbern was among 700 people attending a virtual People's Forum on Saturday with the Coalition for Property Tax Justice to gather homeowner input to address hundreds of millions in property overassessments. 

Osbern was overassessed on his Detroit property taxes but did not lose the property like thousands of other city resident did. On Saturday, Osbern said he wants any future compensation ordinance or plan going forward to include giving fully rehabilitated and up-to-code homes to residents who were impacted.

Although a legal opinion from the city states direct financial payments to overassessed residents would not be legal, Osbern said he still wants financial compensation for his losses.

"I want my money back, but we need to look at those other things and make sure it's transparent. We all in the same boat," Osbern said.

Advocates have heightened their calls for state and city leaders to investigate the ongoing "inaccuracy" and "inequity" in property tax assessments in Detroit since a January 2020 investigation by The Detroit News found the city failed to accurately bring down property values in the years following the Great Recession. As a result, Detroit overtaxed homeowners by at least $600 million over a six-year period. 

Mary Sheffield

City Council President Mary Sheffield hosted the event to get resident input for a compensation ordinance she intends to draft to address hundreds of millions in property overassessments. 

The event featured breakout sessions by council district and provided a historical overview and next steps to address what multiple studies have found: the lowest-valued homes in Detroit continue to be overassessed — even after a citywide reappraisal in 2017 that cost $8.4 million.

The group has argued that it's putting thousands of Detroiters at risk of unjust foreclosure. A March 2021 report by Bloomberg on the nationwide impact of assessments on Black communities, including Detroit, examined instances nationally of local officials overvaluing the lowest-priced homes relative to the highest-priced homes. 

Sheffield said there should be a "menu of options" that people who were impacted by overassessment are able to choose from including tax credits, offering discounted properties through the land bank, or home improvement grants.

"It is very clear in my opinion our lowest value homes still to this day are being over assessed," Sheffield said on Saturday during the event. "We need to work to change state law to eliminate future over assessments."

Options for people who should have been exempt from foreclosure but weren’t and lost their home include employment and small business support, $1 side lots and one of the following: a Detroit Land Bank rehabbed and ready home with a home repair grant, a DLB non-rehabbed home or a rental voucher.

U.S. Rep Rashida Tlaib

U.S. Rep. Rashida Tlaib attended the Saturday forum and is among those who have urged Gov. Gretchen Whitmer to investigate property tax overassessments in Detroit. 

"These overassessments were illegal and gutted out our neighbrohoods. What has been taken from you can never been truly be replaced. We are going to work to compensate you and make sure this never happens again," Talib told residents during the forum.

Tlaib said a compensation ordinance is key.

“No more crumbs. This time we are coming for everything Detroiters deserve,” Tliab said. "This is a national problem we cannot continue to ignore."

Detroit Mayor Mike Duggan and Detroit Assessor Alvin Horhn have pushed back on the study's findings and other claims that properties in the city continue to be overassessed, saying the gap between home prices and assessments was largely closed in 2014 when the mayor took office.

On Saturday, Horhn issued a statement that the city spent millions modernizing the assessment process and new assessments have been reviewed and approved by the State Tax Commission.

"The problems of a decade ago have been resolved," Horn said. "For any individual property owners who feel their proposed assessment may be incorrect, Detroit has in place the longest appeals process of any jurisdiction in the state of Michigan."

John Roach, mayoral spokeman, also issued a statement saying Duggan fixed the over assessment problem in 2014 during his first month in office when he instituted a 20% citywide cut in assessments. The mayor did not attend Saturday's forum.

"Any action that leads to a budget deficit automatically triggers the return of the Financial Review Commission's complete control over city finances. We will not support anything that once again leads to Detroit's loss of self determination," Roach said.

Bernadette Atuahene

Bernadette Atuahene, law professor and author of a study on illegal foreclosures, attended the online forum, calling for the creation of an independent review board to examine whether assessments were done properly every year.

Atuahene said over assessment and loss of one's home is dignity taking and that mere compensation is not enough.

"It requires a dignity restoration process," Atuahene said. "The city's legal opinion says cash payments are illegal. It is going to take time to fight this."

Atuahene also wants the city to require its assessment division to perform a sales ratio study and prohibit the assessor from sending owner-occupied homes to county for foreclosure.

"Council can do this right now. That is the proposal on the table," Atuahene said.

In November 2020, Detroit's former City Council narrowly rejected a proposal from Duggan's administration that would have given residents potentially overtaxed before 2014 priority in affordable housing, home-buying discounts and job opportunities. The majority of council members argued the proposal didn't go far enough.