HomeHeadlinesEthnic Cleansing: Detroit Braces For A Flood Of Tax Foreclosures

Ethnic Cleansing: Detroit Braces For A Flood Of Tax Foreclosures


Ethnic Cleansing: Detroit Braces For A Flood Of Tax Foreclosures
Wayne County to auction 30,000 homes In the fall; a third of them are still occupied

AFRICANGLOBE – A fresh wave of foreclosures could destabilize neighborhoods in Detroit, just as they are beginning to recover from the mortgage meltdown.

Wayne County plans to sell 28,545 Detroit properties at auction this fall — including about 10,000 occupied homes — that are three or more years delinquent on taxes. That’s a record number, in part because Treasurer Raymond J. Wojtowicz ended a long practice of avoiding foreclosure on properties with delinquencies of less than $1,700.

Officials said they’re sympathetic, but the days of avoiding paying taxes in Detroit are over.

“We want to keep people in the homes. We realize it’s bad for neighborhoods,” said David Szymanski, the county’s chief deputy treasurer.

“But there are services provided for homes. If you don’t pay your taxes, your neighbor is subsidizing them for you. That’s not fair.”

The tally is down from about 67,000 Detroit properties served with foreclosure notices last fall. That’s because 40,000 owners have agreed to payment plans and other programs offered by the treasurer.

Activists fear widespread devastation, coming atop 139,000 mortgage and tax foreclosures in Detroit since 2005.

“We need to have a debate: Are we sure it’s the right public policy to foreclose on people en masse?” said Chris Uhl, a vice president with the Skillman Foundation, which is working with nonprofits to prevent the foreclosures.

“We’re reaching the tipping point in neighborhoods. When you foreclose on halfway decent housing stock, it’s going to destabilize communities.”

Data is preliminary, but statistics indicate those now at risk of losing their homes are senior citizens and those with young children, Uhl said.

More than 80 percent of those facing foreclosures have faced a hardship in the past year — medical problems, divorce, job loss or a family death — while about 36 percent meet federal poverty levels, according to data collected by the United Way of Southeastern Michigan and other nonprofits at workshops to help families facing foreclosures.

Because of scrapping, homes in Detroit are often destroyed within weeks of becoming vacant. Demolishing them costs up to $15,000 per house.

‘A Blight Factory’

“We’re trying to keep people in their homes, but meanwhile, there is a blight factory (at Wayne County),” said Michele Oberholtzer, whose work surveying Detroit homes for Loveland Technologies prompted her to found the Tricycle Collective to try to keep families in homes.

“We’re going out of our way to create more blight. A home without a person is a blighted home in Detroit. And it costs more to demolish a building than the government gets in back taxes. It’s backwards,” she said. “This is a Band-Aid on a corpse.”

Cornell Squires, 57, a disabled city ambulance worker, said he has no doubt his home on the far west side would be scrapped if he loses it.

His house on Electric near Outer Drive is next to a vacant lot where a stripped, stolen Chevrolet Camaro has sat for 18 months. Two doors down, a mortgage foreclosed home was picked clean. So were at least three more on the street.

“It’s stressful. I’ve got high blood pressure. I’m losing sleep. It’s so hard,” said Squires, who gets by on $1,900 per month from a city pension and disability payments.

“If I leave this house, people are going to steal everything inside it within 24 hours. Who does that help?”

Squires has lived in the neighborhood all his life. His 90-year-old mother lives across the street and his brother lives a few houses away.

Squires bought the house in 2007 after it was damaged in a fire. He’s fought for years to have its assessment lowered: The tax bill claims the house was worth $80,000 in 2012. At the time, homes nearby sold for $500.

A yearlong investigation in 2013 concluded Detroit was over-assessing homes by an average of 65 percent, according to a review of state tax appeals. The series prompted state regulators last year to overhaul Detroit’s Assessment Division.

More than half of Squires’ debt is from interest because state law required the county charge 18 percent on tax debts.

The law changed this year. Now, the county can retroactively lower interest rates on old tax debts to 6 percent. It’s one of several programs county officials have rolled out to help, Szymanski said.

Housing advocates, the ACLU and the Detroit City Council pressed Wojtowicz to declare a moratorium on foreclosures. He declined, even though in 2007 he refused to sell occupied homes at tax auctions because he didn’t want to remove people from homes.

Since then, the county has foreclosed on 102,000 properties.

Those that sell at auction go cheap: 81 percent of the 37,980 properties sold since 2010 fetched $5,000 or less; 40 percent sold for less than $1,000.

Spurring Residents To Save

Szymanski acknowledged the “fly in the ointment” is whether homeowners on payment plans can stick to them. Clauses allow foreclosure if the owner doesn’t stay current on taxes.

The vast majority of those facing foreclosure — about 90 percent — own their homes, so it requires “tremendous discipline” to save $3,000 or $4,000 over the year for taxes, Uhl said.

And in Detroit — after years of foreclosure, job losses and abandonment — a few hundred dollars a month is a tall order for folks such as Michael Fountain.

The former taxi driver was set to lose his home of 13 years on Iroquois near Warren in the 2015 auction.

His wife, Robin Renee Fountain, bought the home before they were married from the mother of former Tigers outfielder Ron LeFlore. The house was still in Robin Fountain’s name in 2013 when she collapsed and died at a beauty salon.

Michael Fountain said he didn’t know she had failed to pay several years of taxes. He’s now scrambling to transfer the deed to his name and enter into a plan to pay back $5,776. Fountain isn’t sure how he will: His income is about $700 per month.

“I don’t know what to do,” said Fountain, 60. “It’s a house full of furniture. I’d hate for it to go out on the street, but I don’t have a truck or money to pay for storage.”

In years past, he and others could gamble and allow the home to fall into foreclosure in hopes of buying it back at auction for a fraction of the tax debt. That option is no longer available, as a new state law now requires those who bid on their own property to pay at least the full amount of the debt.

Szymanski said he’s hopeful that homeowners who lose their property at the auction can work out rental agreements with new owners. Unlike other counties, Wayne County doesn’t evict those who lose their homes — allowing them to live tax-free until new owners take possession, he said.

Szymanski said the treasurer is working hard to keep everyone in their homes.

“We’re making payment plans (for back taxes) for as little as $150 a month,” Szymanski said. “Find a place you can rent for $150 a month. You can’t beat that.”


By: Joel Kurth And Christine MacDonald


We’re All Detroiters Now – THEBLACKCHANNEL.NET

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