Detroit’s racist annual tax auctions steal houses

Tricycle Collective gave families yard signs to dissuade house bidders. PHOTO: Garrett MacLean
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Tens of thousands of Detroit’s low-income and Black homeowners and renters are being thrown out of their homes. Why? Because former owners or renters’ landlords have not paid the property taxes. The annual Wayne County Tax Foreclosure Auction sells off homes when three years of taxes are unpaid. In 2015, over 28,000 homes were auctioned, some for as little as $500. Families lived in two-thirds of the homes auctioned off. This is a city where half the population has already moved away and 83 percent of the population is Black. Four in 10 live in poverty. Thousands of uninhabited homes are left to deteriorate.

Who benefits? Preying on the hopes and dreams of thousands of residents, bulk buyers snap up hundreds of these homes for a pittance and resell them through “land contracts” to people who can’t qualify for a mortgage. These private, unregulated deals dupe desperate new buyers by allowing them to occupy and restore gutted and dangerous houses without revealing the high amounts of property taxes that will come due. Three years later the house is foreclosed and the buyers lose everything they’ve paid for the house, including the repairs they financed to make it livable. Speculators then buy the improved house at auction and resell it. What a scam!

Another scheme is landlords collecting rent on the houses but not paying taxes, while renters repair the property; then these landlords buy the home at auction again, for pennies on the dollar and raise the rent or sell it. In essence, this is a scheme to clear out poor and Black residents from Detroit by forced relocation. City administrators in nearby Southfield even formed a for-profit corporation called NRI to buy up 100 foreclosed homes the city has taken over, and then sell them at a profit!

Wayne County over-assessed properties at 85 percent of market value instead of the 50 percent allowed by the state constitution. That is, property taxes were illegally almost doubled. The Civil Liberties Union of Michigan and the NAACP have filed a lawsuit against the city of Detroit over this, but there were still 7,000 homes auctioned off in September 2017. A little-publicized payment plan was created — with 18 percent interest rate and complex paperwork to apply and a 10 percent down payment. The County was given $500,000 in grant funds to help with the down payments last year, but hasn’t yet used any of it!

Resistance building. The United Community Housing Coalition, Tricycle Collective, and Moratorium Now! have been leading community opposition against this racist rip-off of the poor. They’ve raised money to help people buy back their homes, by loudly protesting against corrupt practices — such as, half of Michigan’s $761 million in federal Hardest Hit Funds were transferred from saving homes to demolishing them! Protesters also organized a mass march on the home of the County Treasurer. They’re mounting signs at homes being auctioned, “This is a HOME. Do not bid!”

Activists have won some relief. The exorbitant interest rate on tax payment plans was lowered from 18 percent to 6 percent. And they got some public services created to help low-income and disabled residents get tax exemptions.

Fightbacks like these are helping a few in this desperately struggling city, but they are not enough. Some are pressing for a moratorium on evictions, drastically reduced property taxes, or payment discounts to fix up uninhabitable houses. Others call for abolishing taxes on owner-occupied houses, or letting the city take ownership and use rent-to-own, no-interest mortgages to return the homes to the occupants.

Beleaguered Detroiters are struggling to save their communities in a fight against a decaying capitalist system. Jobs have been moved away, homes are being stolen. Speculators, banksters and developers, aided by city and county governments, are sucking the life out of Detroit, a city built by a working class whose hopes for a decent life and home are being shattered.

Stop racist relocation. Livable housing for all. Guaranteed basic income now. These practical demands are getting louder and louder.

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