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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Wall Street and Big Corporations Go Rental and It Means Trouble

ACORN Home Savers Campaign Crew in Atlanta gets organized to hit doors in metro Atlanta suburbs
l to r: Fred Brooks, Karimah Dillard, Marcus Brown, and Lou Sartor

Atlanta   Marcus Brown from North Carolina is new to the Atlanta area, and he has yet to fall in love with it. Marcus was my navigator as we teamed up to hit the doors on rent-to-own contract buyers in metro Atlanta as one of ACORN’s Home Buyers Campaign teams visiting throughout the area. I’ve hit a lot of doors in urban America and around the world. I’ve even hit a good number in rural areas on different campaigns and organizing drives. On union organizing drives I always knew we were in trouble when I drew names in the suburbs of this city or that, but I would never put my name on the top of any master list as a suburban organizer, but that may have to change. Marcus and I were in for a learning experience and some miles to drive it turned out as we plowed through our list. We were a half-hour outside of Atlanta working our way in through one small community after another, and we were in grassy yards, and cookie-cutter, aluminum siding suburbs, and never saw a white family all day. We also saw more “for rent” signs than we saw “for sale” signs, and, frankly, we didn’t see many of either in this red hot real estate market.

But, we started connecting the dots as we looked at the cases in point.

Freddie Mac announces a billion dollar fund to back up efforts to create rental housing last week. The article was scratching its head from sentence to sentence.

 

Even while we were walking up to the doors in Atlanta suburbs, I had an article I had pulled out of the Wall Street Journal in my pocket entitled “Wall Street is the New Suburban Landlord.” In the wake of the housing crisis a lot of Wall Street money and big time realty firms are specializing in renting single family homes in the suburbs. They are betting that in the wake of the Great Recession and housing implosion of 2008, the bloom is off the rose of housing ownership for many families. They estimate that more than 200,000 homes have been bought in a $40 billion spree of bottom fishing from the foreclosure crisis and flipping the homes into rental units. Where the foreclosure epidemic went viral in the South and Southwest, they fed at that trough.

In Atlanta, we were at ground zero it would seem. In a June 2017 estimate of the top markets for the largest single-family-home rental companies, Atlanta led with 24,075 homes on offer, Tampa-St. Pete had over 14,000, Phoenix, over 13,000, Miami almost 11,000, Charlotte right behind at 10, 570, Orlando over 9000, Dallas almost 9000, and Houston over 8000. You get the picture.

This also dovetails with a research report written by Elora Raymond at the Atlanta Federal Reserve Bank that found that the eviction rate in greater Atlanta was over 20% for rental units, and, hear the drumbeat now that will surprise no one, corporate owned rental properties evicted tenants at a significantly higher rate than privately owned landlords. She also noted that eviction rates are increasing significantly in markets all over the country.

Connecting the dots leads to some frightening conclusions where vacancy rates are low in hot markets and affordable housing is a mirage for working and lower income families. The business model depends on quick evictions and the extra cash from late payment fees as tenants try to scrounge to catch up with their landlords, who are now using the courts to pad their payments.

Just the kind of business that Wall Street would love obviously. But, just as we found on the doors, don’t think this is just an urban problem, it’s in the suburbs as well, and as gentrification has increased and rents have soared, many suburban neighborhoods are now populated with our families as well.

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CBO Again Says No-Go on Senate Healthcare Bill, Deductibles Soar!

New Orleans   The nonprofit Congressional Budget Office had a more leisurely schedule in costing out the latest, zombie Republican Senate effort to replace Obamacare with something, almost anything more draconian. The numbers were the usual at one level: 22 million would lose coverage by 2026, 15 million of them immediately. Medicaid would be hammered with a 26% cut over the next decade. Like I said, the usual.

There were a couple of new twists though that caught my eye.

The CBO number also took a look at the impact of going all-Trump on a repeal now and punt down the field until some later date. 32 million Americans would lose coverage on that less than brilliant, but certainly spiteful, bitter pill strategy. That’s 10 million more than under the original Senate slice. Majority Leader Mitch McConnell is pressing for a vote on something, in fact just about anything, next week so that he can count the bodies and move on or move home. That’s going to be a hard bill to force feed.

The other factoid that caught my eye went to my long term grievance: no cap on deductibles.

Just to reprise my constant complaint. In bargaining union contracts for lower waged service employees, all of the companies had compliant plans under the Affordable Care Act, but they also included deductibles that ranged from $4000 to $6000 on top of the 9% monthly payments for coverage. The result for lower waged workers making less than $20,000 per year is that there was almost zero participation, but they were also excluded from any of the subsidies or cost-sharing of Obamacare, even though they could participate in the marketplace and pay full price, because they technically had coverage under their employers miserable plans. We found ourselves having to advocate nonparticipation and paying the fine.

The CBO noted that under Obamacare the average deductible for single person coverage was in fact $5000. Under the Republican Senate bill they estimated that the average deductible would soar to $13,000 per person on individual coverage. Remember that’s a deductible, meaning the individual would shell out $13,000 before getting any benefits from the so-called health insurance and after paying a monthly premium. Who is going to buy that pig in a poke? Eliminating the mandatory requirement means that’s an easy guess with the answer being: nobody!

Face the facts. At this level of deductible, this is nothing more than catastrophic care. Why would anyone sign up if they felt kind of healthy, and kind of lucky, unless they were suddenly feeling a little woozy, or a fortune teller told them to look out.

Meanwhile what we have, warts and all, is becoming more popular, up to 60% support, and the Trump Administration is debating outright sabotage, as distinguished from Congressional sabotage, I guess.

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Community and Organizational Responses to Flooding

Russell Lee, flood refugees at meal time, Charleston, Missouri, February 1937. FSA-OWI Collection, Library of Congress, LC-USF34- 010215-D.

New Orleans Bear with me on this, because we’re going to take some twists and turns, but trust me, these things are all connected, and the water is always rising somewhere, so it matters.

Partly of course we’re closing in on the 12th anniversary of Hurricane Katrina hitting New Orleans and the Gulf Coast. We’re still in recovery. There are still volunteers coming in from time to time to help. We’re still trying to develop the ACORN Farm in the Lower 9th Ward. There’s still a fight to stop expansion of the Industrial Canal that flooded the area and ACORN’s affiliate, A Community Voice, is still in the thick of the fight as it has been for the last dozen years. In Paris one evening during the ACORN International staff meeting we showed a clip from the upcoming documentary, The Organizer, that told the story of ACORN’s fight to rebuild New Orleans after the storm. I’m telling the truth when I share that there were some tears in the eyes of these hard bitten organizers.

Arthur Rothstein, State highway officials moving sharecroppers away from roadside to area between the levee and the Mississippi River, New Madrid County, Missouri, January 1939. FSA-OWI Collection, Library of Congress, LC-USF33- 002975-M2.

I was struck reading Michael Honey’s book and oral history on John Handcox and the Southern Tenant Farmers’ Union, Sharecroppers Troubadour, on the plane back to New Orleans from a too long 19-day trip to Hungary, France, and Italy. The STFU and Handcox had been organizing in the Bootheel section of southern Missouri which cuts into northeastern Arkansas when the Great Ohio and Mississippi River Valley Flood of 1937, “displaced 7,000 whites and 5,000 blacks, including nearly all of the STFU’s 250 paid members in nine Missouri locals.” Like Katrina the impoverishment was devastating, except if anything worse, because the country had not found an adequate response to its peoples’ disasters then either. These were farm workers whose crops were washed away, partially when the Corps of Engineers used 200 pounds of dynamite to blow up a levee to stop more flooding downriver. Like the ACORN Hurricane Katrina Survivors’ organizations in cities throughout the south and southwest footprint, as Honey notes, the STFU “organized an Official Council of the STFU Refugees, which excoriated the federal government for having caused ‘the most disastrous flood in the history of our country.’” There were too many coincidences. The little money promised came too late. The crops recovered, but the people did not. The STFU had to also be rebuilt in the area to fight again in a last gasp.

John Handcox and Michael Honey, 1986.
Smithsonian Folkways – Smithsonian Institution

There was a story recently about the National Flood Insurance Fund in one of my daily papers, which grew out of these kinds of disasters. The fund is $25 billion in the red largely because of Katrina, Sandy in the New York-New Jersey area, and continued flooding in Louisiana from massive rains. The piece claimed that 30% of the money went to repeaters, folks whose homes just keep being flooded. A family in upstate New York was interviewed who were about to raise their house 10 feet with the insurance support. They couldn’t sell the house because of the floods. They wanted to retire and move to Arizona but they couldn’t. Poignantly, they said they knew they would be hit by another flood in the future. It was hard to not wonder, why the fund didn’t just help them get a new place?

As climate change becomes a constant concern, all of this history and these simple questions are going to be harder and harder not to answer with a more constructive and humanitarian response.

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Humpty Dumpty Health Care

Paris   Nothing like a couple of weeks on the road, three countries, a half-dozen or so cities, and the siren song of home, heat, and humidity all sounds better and better. Of course there’s no escaping the headlines or the occasional questions from random people from all walks of life about what thoughts we might have on Trump. As excited as people around the world were about Obama as president, they are mystified by Trump. They are not alone.

The Republican Senate’s efforts to not just repeal-and-replace Obamacare, but to cap entitlements for Medicaid and pretty much kick the teeth out of the poor, elderly, disabled, and others seems to have alienated a couple of senators, while others wanted a chance to run up and kick harder and go for the kill. The New York Times reported that Senator Portman from Ohio has been a huge problem behind-the-scenes for the Republican majority leader and his efforts to pull together the votes. Seems he was concerned about what might happen to 700,000 people in Ohio that had gained coverage under the Affordable Care Act. Wow! That’s a good question for a lot of politicians from a lot of states it would seem. Turns out that when you push Humpty Dumpty off the wall, it really is hard to put the pieces back again.

And, in fact as the votes collapsed on the latest Senate version, there was an even greater implosion on the latest Trump twitter tantrum urging just repeal and deal a couple of years down the road. Seems immediately three Republican women in the Senate from West Virginia, Maine, and Alaska said the equivalent of “what are you pulling my leg,” saying that it would be reckless and irresponsible to simply repeal and blow the Act up.

Many of the Republican governors with shorter terms and quicker elections who are forced to be closer to their constituents also got their back up on these draconian cuts and caps in Nevada, Ohio, and elsewhere. They have earned some thanks as well.

I wish there were a lesson learned on the order of “don’t mess with entitlements,” but we know better. Like a bad dream, they’ll be back with more mischief and other attempts, and one way or another, they will have to do something now, we might hope, to fix some of the pieces of Obamacare that are broken.

Will they reach out to Democrats? Do they really have a choice?

Maybe this will be a twist on the old story, that if you break it, you own it. In this case, the message to the Senate might be, if you can’t break it, then do your job, and fix it.

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Street Art

Torino  Somehow we had discovered the Museo d’Arte Urbano (MAU) or Urban Art Museum, the first of its kind in Italy, and a fascinating demonstration of the use of art and street artists to focus on the rejuvenation of a working class neighborhood in Turin. Their own description of their project indicates that 70 some artists and neighborhood volunteers participated in a self-funded project that produced 147 different works on buildings and walls throughout the community that they describe as “Borgo Campidoglio, which was born in 1853 like a working-class neighborhood. This area still maintains its original structure, made by low houses and narrow winding streets.”

There is no building or office. No tickets or museum shop and cafe. We caught the #9 tram and got off at the border of the neighborhood according to Google Maps and started walking down a main street of sorts past multi-story apartment buildings and churches, until we saw a low slung set of cobbled streets and figured we were close. Then almost magically we saw walls with designs here and there, and windows painted over colorfully, or with whimsy, a design, or sometimes a message.

We cut into the neighborhood near a small park with benches indicating that they had been part of the MAU project, some mimicking other artists like Mondrian and others original. There was no overarching direction or collaboration in the theme or placement of the murals that we could tell. We walked from block to block often in surprise at seeing something painted behind us after we had walked by or in an area we didn’t expect. Some of the murals were signed, but most were not.

We were actually somewhat surprised that most of the works seemed apolitical. Under the influence of Bristol’s Banksy and most street artists in communities in the United States, we expected more of the works to have a message or some critical content. Of course we didn’t see all of the pieces in our random walk, but did see more than one-third. We probably could go back again and tackle another part of the neighborhood and see a completely different set of works. The UAM website says that they regularly renew the art, which may mean that the content changes over time as well. Perhaps the neighborhood itself wanted the work to to be brighter, more colorful, and less critical, since the works are on someone’s house, so it would be right for them to have a voice. It’s hard to tell.

What is easy to tell is what a difference it makes to a community. I think of the murals that have enlivened our own neighborhoods in New Orleans from the fence of our building and the wall of St. Claude Fair Grinds Coffeehouse to others throughout the Bywater and even the Marigny. Some hardly survive a season, while others seem permanent. For the most part, similar to Torino, they are free of graffiti, as if through there is an unspoken street artist code at work.

It would seem that similar self-generating and regenerating “museums” of urban art could be cobbled together in many cities bringing excitement and liveliness to lower income and working neighborhoods. Doing so might also help protect them and assure their survival and identity in the face of gentrification and other assaults for the future.

The benefits seem obvious, and what could be the harm?

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