Coalition urges Wayne County to continue ban on tax foreclosures in 2021 and beyond

Christine Ferretti
The Detroit News

A coalition of community activists is calling on the Wayne County treasurer to pursue a continued ban of "inhumane" countywide property tax foreclosures in 2021 and beyond amid financial hardships spurred by COVID-19.

The Coalition for Property Tax Justice joined Wednesday with the American Civil Liberties Union of Michigan for a press conference urging Treasurer Eric Sabree to ask for a court-issued halt in foreclosures of owner-occupied homes in Detroit for the years to come until over assessments that caused financial hardships in the city are fixed.

"We're asking him to go to the courts and to let the courts decide," said Bernadette Atuahene, a law professor and coalition organizer. "The proper place for this decision is in the courts and not the Wayne County Treasurer's Office."

Bernadette Atuahene

Atuahene argued the treasurer's office has profited under the Michigan Tax Act from interest and fees from foreclosures. As a result, she said, the county's profits were as high as $60.5 million in 2013 and $29.3 million in 2015.

"The county's reliance on profits generated from tax delinquencies really erases incentive to halt this property tax foreclosure crisis," Atuahene said.

Mario Morrow, a spokesman for Sabree's office, on Wednesday pointed to a July ruling from the Michigan Supreme Court that said counties cannot sell tax-foreclosed property at a profit without compensating the individual from whom the property was taken.

"That's the past. The county cannot make millions and millions in profit on foreclosures. The Supreme Court struck that down," he said. "All profit of selling of foreclosed homes goes back to the previous owner."

Morrow confirmed Sabree has no intention of returning to the courts to seek out a further halt to foreclosures. The only reason it was done the first time, he said, was to extend the moratorium beyond an original order from Gov. Gretchen Whitmer. 

"You can't predict the future," he said. "Why are we trying to predict the future in 2021 and it's October of 2020."

Sabree in the spring announced that foreclosures in the county would be halted this year in hopes of keeping people in their homes during the pandemic. 

U.S. Rep. Rashida Tlaib, D-Detroit, noted during Wednesday's call that Sabree has a "unique position" to "stand up for Detroiters and prevent this injustice."

"No one will fault you for standing with the people. None of us would," Tlaib said of Sabree. "There are decisions that can be made right now by those in elected office to prevent this from continuing."

The coalition in July asked Detroit officials to create a Property Tax Compensation Fund to pay homeowners who were overtaxed through the city's inflated property values after the Great Recession, including those who lost their properties to tax foreclosure. 

The fund, the group has said, would be supported by fines generated through ticketing landlords who are operating illegally without a city-issued Certificate of Compliance or registering their rentals.

A Detroit News investigation published in January found that the city overtaxed homeowners by at least $600 million between 2010 and 2016, after officials failed to accurately assess properties to keep pace with falling property values during the Great Recession.

John Roach, a spokesman for Detroit Mayor Mike Duggan, said in an email Wednesday that the city's efforts have successfully cut owner-occupied foreclosures by 95% from more than 6,400 in 2015 to 357 in 2020.

Roach added, "there is no issue with overassessments (in Detroit) today."

"Whether the county and state suspend the foreclosure process is a county and state decision and we would support whatever decision they make," he said. 

Wayne County Treasurer Eric Sabree, right, said the tax relief effort is streamlining the path for Detroiters to be "free of their back property tax burden."

Detroit's City Council is expected to take up a resolution "in the near future" related to the overassessments in past years.

Brian White, chief of staff to Detroit City Council President Pro Tem Mary Sheffield, said Sheffield has taken a lead role on council in dealing with the fallout from foreclosures. 

"We know that foreclosures strip African American communities of their wealth," said White, who urged Sabree "to stop hiding behind the law to put people out of their homes."

Morrow said Wednesday that Sabree continues to assist residents who are having difficulties making their tax payments.

"He encourages people to make their payments, enter into a payment plan and/or contact his office for consultation," Morrow said. "The treasurer’s No. 1 goal is to keep people in their homes."

Sonja Bonnett, a resident who has lost her home to foreclosure, added during the 30-minute news conference that it's time for Sabree to "bite the bullet" and "do right by all people in Detroit."

"The things that are happening to us here is a travesty," said Bonnett, who works as a community legal worker for the Detroit Justice Center. "It is the most devastating personal failure that someone trying to make their way through the world can go through."