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Law prof. says 85% of Detroit homes taxed illegally, contributing to massive foreclosure rates

Jul 7, 2017

The tax foreclosure crisis in Detroit may not get the attention it deserves. In fact, the tax foreclosure crisis didn’t just happen, and it doesn't continue to happen, by unfortunate circumstances. There are decisions behind it. One group says those decisions are illegal.

One person who has been impacted by this crisis is Sonja Bonette. The Detroit resident has been hit with property tax bills adding up to $6,000 and she joined Stateside to tell her story about how this happened. 

"I acquired my home in 2012 through land contract through some pretty shady buyers," Bonette said.

According to Bonette, those "shady buyers" didn't pay their taxes and she inherited the tax debt. There was no option for a payment plan and she was not made aware of any other programs that could help her.

Bonette is fighting to keep her home because she claims Wayne County illegally assessed property values, which has led to many Detroiters being unable to pay their tax bills. 

The Coalition to End Unconstitutional Tax Foreclosures agrees.

Bernadette Atuahene is a visiting professor of law at Wayne State University, and she wrote a guest blog for the ACLU of Michigan. In that piece, she unveiled her research that shows that as many as 85% of homes in Detroit might have been taxed at rates that violate the Michigan Constitution.

"The Michigan Constitution says that no properties [should] be assessed at more than 50% of its market value," said Atuahene. "Other state constitutions to the extent that they mention assessments at all, say things like uniform, fair, equal, which means that it's up to the judge to determine legality. Since Michigan's constitution and its supporting legislation and case law make it explicit that no properties is to be assessed at more than 50% of its market value, that means people like me can come in and run the numbers and that's exactly what my co-author and I did." 

According to Atuahene's research, which looked at property tax rates from 2009 to 2015, in each of those years, between 55% and 85% of properties were being assessed at more than 50% of its market value, which violates the Michigan Constitution.

"We have no evidence of a master plan or malintent," Atuahene said. "What we do have tremendous evidence of is a bureaucracy, the assessment division, was in complete disarray. Totally underfunded. Totally understaffed. They're legally supposed to go out and look at 30% of the properties every year. They had not done that in at least two decades. And so what was going on is they were basically adjusting taxes from the year before and that's how they were doing their assessments." 

This became a major problem in 2008 when the Great Recession hit because housing values plummeted, but the property taxes didn't fall with the housing values, leaving many Detroiters with an inflated tax bill.  

As a result, Atuahene said, one in four properties in Detroit are subject to property tax foreclosure and now ACLU-Michigan has filed a lawsuit against Wayne County over the issue.

Listen to the full interview above to hear more about how Sonja Bonette plans to fight to stay in Detroit, and if a government entity is ultimately found to be at fault, what can be done all these years later?

Support for the Detroit Journalism Cooperative on Michigan Radio comes from the John S. and James L. Knight Foundation, the Ford Foundation and the Corporation for Public Broadcasting.

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Watch the Detroit Journalism Cooperative video below with Lester Graham's interview with Michael Steinberg about ACLU-Michigan's lawsuit on City of Detroit assessments causing tax foreclosures in the city.