Tax deadbeats targeted at annual foreclosure auction
Detroit — Mayor Mike Duggan and Wayne County Treasurer Raymond Wojtowicz are targeting tax deadbeats who purchase properties at the annual tax foreclosure auction.
Officials have grouped together nearly 6,350 Detroit foreclosed properties in the October auction and set a $3.175 million price for the bundle in hopes of making the mostly dilapidated and vacant parcels less attractive to speculators.
If no one bids by Oct. 28, the Detroit Land Bank is expected to take the homes, demolish the rundown ones and auction off those that are salvageable to qualified bidders. An estimated 2,000 are vacant lots and 3,000 need to be razed, said Chief Deputy Treasurer David Szymanski.
"We don't want to fool around with putting these in somebody's hands," Szymanski said. "We want to address some of the abuses."
About 1,000 in the group are homes that are in good condition, he said. Szymanski said the land bank's auction is better set up to allow officials to vet qualified buyers. Vacant lots could be sold by the land bank to neighbors.
But critics say it reduces access.
"This seems like it violates the spirit, if not the letter, of the General Property Tax Act, because the Treasurer is in essence not providing equal access to these properties," Brad Aldrich, an attorney for auction buyers, wrote in an email to The News. "Who could afford to pay ($3.175 million) for these properties?"
Most county auction buyers don't pay their taxes. As of this summer, nearly 78 percent of the 29,000 properties purchased at the county tax auction since October 2011 were tax delinquent.
The county expects to seize nearly 20,000 auctioned properties with unpaid bills in January. It's the first time the county has enforced a provision added in 2011 to the annual auction that requires buyers to stay current on tax bills. Generally, owners lose their properties after three years of delinquency.
The tax debt owed on the 20,000 properties wasn't available Wednesday. More than $80 million was owed on about 22,700 properties as of June. The vast majority are in Detroit.
The county added the provision in auction sales in response to a series of Detroit News reports about buyers who shed their tax debts by buying back their own foreclosed properties at public auctions. County officials said they hoped cities would enforce the rule and took action when few did.
"This bundling of properties will provide a better process for getting them back on the tax rolls," reads a joint statement released Wednesday from Duggan and Wojtowicz. "Most importantly, this process will speed the demolition of properties that continue to be a cancer in Detroit neighborhoods."