Detroit Paradox: People Who Need Houses and Houses that Need People

abandoned housing in Detroit

Detroit    Rarely is there a day in organizing when each meeting seems to be with one person after another who is smart as a whip, committed all in, and shoulder to the wheel, as we found in Detroit, but rarely is there also a day in which each story sometimes seemed a version of Sisyphus pushing the rocks up the hill and watching them roll down again.

Some of the rocks were avalanches I knew too well. Ted Phillips, director and litigator of the United Community Housing Coalition, stepped into a meeting that our ACORN Home Savers Campaign was having with Michele Oberholtzer, the shrewd, brilliant, and tough-as-nails director of the UCHC Foreclosure Project. Ted has years in the saddle and though we were deep in the weeds with Michele on potential strategy and tactics to allow lower income families to own – or keep – their homes, I couldn’t resist asking him what had happened to the old Detroit homesteading program that ACORN had fought and won over a decade of struggle. Ted knew exactly what I was talking about and quickly responded that it “had died because of governmental incompetence.” What we had won, only after Coleman Young left as Mayor after years of fights and squatting, was a compromise where a family would indeed get the house for $100 or so, but it required sign-off from several levels of government including the city, county, and possibly the state on adjudicated property, and essentially government writ large and small couldn’t effectively coordinate. Michele shook her head in disbelief, saying that could have been great. I thought to myself that perhaps we could have saved it if, big if, we would have had the resources to keep someone on staff who was bird dogging the bureaucrats 24/7. Michele had been telling us the complex lengths her program went in order to navigate the obstacles to allow people to keep their houses from auctions to governmental first refusals, so she knew what she was talking about.

In another meeting we got a short course in municipal and state financing that forced so many homeowners into auction because of the byzantine costs of living in Detroit. Property taxes, he told us, were the highest percentage to value in the country, but because of various austerity measures imposed by the state when Detroit when bankrupt, there is also no practicable way forward immediately to abate the levels without toppling the fragile city financing structure. We raised the questions of how it was possible to justify either spending Community Development money by the city or banks getting Community Reinvestment Act credits for developments in the downtown corridor while the neighborhoods starved, and heads nodded on the waivers that made it happen. Others talked to us about the unsustainable cost of even living in Detroit when property taxes were added to the cost of home insurance, water bills were soaring under new regulations, and in Motor City car insurance is easily $400 per month we were told. One person told us of being responsible for a city program design where the city lacked the money to actually implement any of the design she was producing.

On our pursuit of rent-to-own companies we found more names to add to our rogue’s gallery. We also heard of some promising handles that might save some owner-occupants in such agreements if we could get them into the landlord-tenant court where they could make the case that they had a land contract under Michigan law.

Rocks might be rolling down some of the hills, but the more we talked to people, the more we were on the team that was trying to mine those rocks to make a difference in Detroit.

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Property Tax Delinquency Auctions as Ghetto Creators and People Removers

Harbour Portfolio Advisers houses boarded and abandoned in suburban Atlanta

Atlanta  Two of the most heartbreaking and moving injustices we stumbled on when the ACORN Home Savers Campaign teams were doorknocking families in contract buying agreements in Detroit involved property tax delinquency auctions. It was a scam facilitated directly by the Wayne County Treasurer’s office and other government officials.

The easiest case for me to describe was on a door hit by the team I was on, though the other case was virtually identical. On our list we had the woman recorded as a contract buyer through one of the many subsidiaries of Detroit Property Exchange or DPX as locals call the company. When she answered the door she told us she was now the full owner of the property and rid of DPX. It seemed she had formerly held a conventional mortgage and was paying the mortgage servicer directly. Fairly typically, she was making a bundled payment to the bank’s mortgage servicer which included her insurance and property tax payments. She had gotten a call “out of the blue” from DPX some four years previously informing her that they now owned her home because they had bought it through a tax delinquency auction for $6000 in back taxes, because her servicer had gone bankrupt with no notice to her. They were calling to evict her, but they offered her a deal. She could pay the $6000 to DPX from the auction price, and the remainder of her mortgage obligation, some $15,000 to them, in monthly payments over a period of years, and she would own the house. Miraculously, she was able to do this by taking advantage of several “matching” offers DPX had made, mostly during tax refund time, where if you made accelerated payments of $1500 or more they would apply that payment and “match” it by deducting a similar amount from your obligation. She felt her story had a happy ending. We of course were horrified that she had been scammed by both DPX and that it had been enabled by the Wayne County Treasurer!

another home abandoned to tax auction

A brilliant op-ed in the New York Times entitled “Don’t Let Detroit’s Revival Rest on an Injustice” by professor and legal researcher, Bernadette Atuahene, argues that this kind of situation is not only typical of the crimes being preformed by the Wayne County treasurer and the assessment procedures, but the tip of a deeper and longstanding illegal ripoff of home purchasers that has been a huge factor in ghettoizing Detroit. Assessments for years have routinely disregarded the legal limits set by the Michigan constitution that no assessment can be listed at more than 50% of the homes evaluation. Additionally, there are limits for lower income households which are ignored with impunity with the treasurer and assessor saying plainly that they would keep stealing the homes from people, because it was up to the victims to appeal their assessments and that if they didn’t, then it was fair for Wayne County to grab the house and auction it.

The Home Savers Campaign has asked FNMA to bar various rent-to-own property companies like Detroit Property Exchange, Harbour Portfolio, and others from its auctions, and we are working with allied organizations like Detroit Eviction Defense and Detroit Action Commonwealth to demand that such companies be barred from Wayne County tax delinquency auctions as well. Reading Atuahene makes us wonder whether they are all in cahoots, making justice even harder to win, since state laws and the Constitution seem to have given them so little pause.

unique home a Vision Property Management contract buyer is making his own

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