Low Income, High Bills
Detroit’s families have a median income of $26,325. Monthly water bills run an average $70 per home, and yearly taxes on a modest home might be pegged at 3-15 times its realistic market value.
The beginning of the financial crisis came earlier to Michigan than other states. As a consequence, between 2002-08 there were 18,855 tax foreclosures.
Wayne County forecloses on properties that are three years in arrears. Then the homes are sold in two rounds of auctions. In the first round, the house is offered for the amount owed; in the second, it is auctioned off with a beginning bid of $500. Yet by 2008 only 5,585 had been sold; the majority of these mostly vacant properties became city owed.
Over the next six years, tax foreclosures rose. Another 92,312 properties went into foreclosure, with fewer than 11,000 sold. The city now owned 53,608 properties. In the intervening years, many were stripped and/or burned.
Last year newly elected mayor Mike Duggan announced that some neighborhoods would receive a 5% reduction on their current property taxes, others 10%. Yet this gesture doesn’t comply with the plain letter of the law, let alone begin to deal with the fundamentals of Detroit’s residential property taxes: years of over-assessment of homes, exorbitant interest rates, and tacked-on alleged unpaid water fees can quickly add thousands of dollars.
In early 2015 the Wayne County Treasurer’s office announced that this year 62,000 Detroit properties will be slated for foreclosure, with probably 38,000 occupied. This could result in the displacement of as many as 100,000 Detroiters, or about one seventh of the city’s population.