WDET 101.9FM WDET is Detroit’s public radio station
More than 600 people participated in an online public forum to discuss remedies for Detroit residents affected by their property tax overstatements.
Last weekend, more than 600 people took part in an online public forum to discuss remedies for Detroit residents affected by their property tax overstatements. Sonja Bonnet was guest speaker.
“I lost my house due to an illegal and unconstitutional tax foreclosure,” Bonnet told the group. “Today I want to speak to the community just to let you know that I am proof that your voice can be heard.”
Before losing her home, Bonnet could have benefited from tax exemptions because she was poor, which would have minimized what she owed to the government.
I think the city really needs to know that when you put the community in those positions, you’re not just taking a building from us. You take the American dream from us. —Sonja Bonnet
“But nobody told me about this program. And even while I was going through a foreclosure and visiting city buildings and other community resources, no one told me about it,” Bonnet said.
For Bonnet, the tax seizure was more than just the loss of his home.
“I lost my health. I lost my footing. I lost confidence in myself,” Bonnet said. “I think the city really needs to know that when you put the community in those positions, you’re not just taking a building from us. You take the American dream from us.
Compensation for Detroit’s overtaxed homeowners has been a politically heavy item. About one in three Detroit homes have been foreclosed since 2009 — some by banks and mortgage lenders, others by Wayne County for unpaid taxes. Some of these foreclosures have occurred on homes that have been overvalued by city appraisers. Many housing activists cite a Detroit News report that puts the overtax figure at $600 million.
In 2014, Mayor Mike Duggan announced sweeping reductions in residential assessments. The Duggan administration proposed a resolution to offer compensation to overtaxed residents in 2020, but critics say it didn’t go far enough and the measure was voted down by city council.
This year, a new slate of officials came to power pledging to make property tax compensation a priority. Newly elected City Council President Mary Sheffield co-hosted the event.
“Let us be united around this issue. Let’s continue to use and raise our voices,” Sheffield said. “I look forward to a solid piece of legislation that we can collectively, as a council, move forward to move this issue forward.”
Sheffield organized the public forum with the Coalition for Property Tax Justice, which studied how assessors in the city were valuing properties after the Great Recession. They found that most Detroit homes were overvalued in violation of Michigan’s state constitution, with poorer residents bearing the brunt of inflated property values.
“Lower-value homes are taxed at a higher rate than higher-value homes,” said Bernadette Atuahene, a Chicago-Kent College of Law professor who leads the Coalition for Property Tax Justice. “In Detroit, property assessments are very regressive.”
While Detroit reassessed all of its homes in 2017, the coalition says the overtaxation persists. Atuahene says the city needs a solid “dignity restoration” plan that takes into account the damage of structural racism in housing and land ownership.
“Black and Hispanic homeowners pay an average of 10 to 13 percent more in property taxes for the same batch of property than whites,” says Atuahene. “It’s not just a Detroit problem. It’s not just a Michigan problem. This is a matter of national racial justice.
During the public forum, participants broke into groups to discuss potential compensation plans, such as home repair grants, property tax credits and cash payments.
“I don’t have to tell anyone who has been overtaxed or disposed what they should get. They have to exercise their agency and tell us what they want,” Atuahene said.
Some of these options have already been considered by city prosecutors, who have ruled against monetary restitution for overtaxed individuals. Still, Sheffield is making further progress on the issue, asking the city’s legal department to review a potential resolution, while it drafts a new ordinance with community input. This move has the support of one of Detroit’s members of Congress.
“The compensation order is a key avenue to restoring dignity to so many of our neighbors in Detroit,” Rep. Rashida Tlaib (D-Detroit) said. “We are done settling in. More hypothetical benefits. More crumbs. This time we come for everything the Detroiters deserve.
Many Detroit City Council members campaigned in support of property tax justice during last year’s election. Housing advocates say they could start by creating an independent review commission that studies property tax inequities. Then they can order the city to stop sending owner-occupied homes for foreclosure when they’ve been overvalued.
In the meantime, property values in Detroit are rising. Housing officials say the city’s residential properties are worth $2 billion more in 2021 than they were in 2017, as most homes see their assessed value rise for a fifth straight year. Duggan says that on average, each neighborhood has seen a 30% increase and that allegations of overtaxation are “absolute nonsense.”
“Certainly home sales have increased, although I’m not aware of this last year with COVID. We’ve seen more mortgages, more home repairs, we’ve seen a lot of positive things,” Duggan said. “I don’t think there’s any question that when you demolish 17,000 burned down houses and renovate 8,000 vacant houses and move families in, it has a huge effect.”
City officials say that if the assessed value of homes increases, state law dictates that personal tax increases are tied to inflation and capped at 3%.
“Nobody is overtaxed,” Detroit evaluator Alvin Horhn said. “This series of increased valuations, this series of increased market value does not lead to increased taxes.”
The Coalition for Property Tax Justice says many Detroit residents pay inflated taxes due to inaccurate property assessments, even though annual tax increases are limited. But this figure is still uncertain for the pandemic years.
“We haven’t got our hands on that data yet,” Atuahene said in response to the announcement. “We’re looking forward to getting our hands on the data so we can do a valuation ratio study to see, were they ultimately successful?”
More than 400,000 owners will receive their new reviews in the mail starting this month. They will have until February 22 to appeal their new land values. If that first appeal doesn’t work, they can go to the Detroit Board of Review in March.