Some Good News for Low-Income Families Hoping for Homes in Cincy & Detroit

New Orleans       For lower income and working families in these days of escalating rents and no money flowing in the credit deserts, the old saying that if it “weren’t for bad news, there wouldn’t be any news at all” feels too much like an everyday story.  In Detroit and Cincinnati recently, there was some good news that should create some hope for some families trying to keep homes out of foreclosure or buy homes through installment land contracts.

The Detroit story is a hard one to get your arms around, like so many things in Detroit.  The topline is that a suit led by the ACLU reached a settlement with the City of Detroit that may allow some families to stay in their homes.  As the Detroit News summarized,

The ACLU sued the city in Wayne County Circuit Court two years ago over how it administered the state-mandated property tax break for the poor, arguing it was inaccessible to the vast majority of homeowners who were needlessly losing their homes to foreclosure.

To be clear, the city didn’t allow lower income families to get the property tax exemption approved in state law and instead tallied the delinquent property taxes for several years and then after being in arrears for more than three years, foreclosed on the houses and put them up for sale at tax auction.  Nothing pretty about that story.  It’s almost a Ripley “believe or not” tale.

The settlement forces the city to have to step up.  As the Detroit News reports:

Under the plan, a group of homes headed to this year’s fall tax auction will instead be bought by the city and sold to owner-occupants who prove they qualified for the city’s poverty tax exemption, which lowers or eliminates tax bills.

All good so far, though it gets tricky.  Families that can prove that they were wronged have to buy back the homes for $1000, which, frankly, I don’t understand at all.  The money they say is going to come from private foundations.  The whole affair is being administered by some fantastic folks the ACORN Home Savers Campaign was privileged to meet earlier in the campaign at the United Community Housing Coalition.  UCHC has already qualified about one-hundred families.  There are more than 4000 homes scheduled for the fall auction with over 2000 occupied by owners or renters, so of course there is concern that there may be more people trying to win justice under the settlement than there is money available from foundations, but fingers crossed.  This is still good news and the city can’t claim to be protecting home owners from foreclosure even while cheating them earlier so I’m sure there will be a fix if there’s a shortfall.

In Cincinnati, an ordinance was passed unanimously to assure that any house offered under an installment land contract had to first establish that it was up to code.  Given the history of how companies have operated there, this is also a good step forward.

In both cities these are steps forward and offer hope of more progress for lower income tenants, potential homeowners, and existing homeowners in the future.

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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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