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Tag: Coalition for Property Tax Justice

  • Is Detroit still cheating homeowners on taxes? New audit to find out.

    Is Detroit still cheating homeowners on taxes? New audit to find out.

    Detroit homeowners are nearing the truth about whether their houses are still being overtaxed after the city council on Tuesday approved hiring an independent auditor to review property value assessments.

    The council unanimously approved a $230,000 contract with the International Association of Assessing Officers (IAAC), a Kansas City-based nonprofit research group that focuses on property taxes.

    The contract, which was supposed to be passed five months ago, is required under an ordinance passed by the council in November 2023. The property tax ordinance is aimed at determining whether homeowners are being overtaxed.

    Between 2010 and 2016, the city of Detroit overtaxed homeowners by at least $600 million. The Michigan Constitution prohibits property from being assessed at more than 50% of its market value. Between 2010 and 2016, the city assessed properties at as much as 85% of their market value.

    While Mayor Mike Duggan’s administration says the property assessments have been fixed and are now fair, a recent study suggests the city is cheating lower-income residents by illegally and disproportionately overtaxing homes worth less than $35,000. The study, released in March by the University of Chicago’s Harris School of Public Policy, claimed the city overassessed the value of 72% of the homes worth less than $34,700. By contrast, a vast majority of the homes worth more than $35,000 were not overassed, according to the study.

    Duggan’s administration vehemently rejected the study’s findings, saying the city’s assessments are accurate. In a statement to Metro Times in March, Detroit Assessor Alvin Horhn dismissed the claims in the study as “utter nonsense” and “politically driven,” saying that “any claim that homes today are systematically overassessed is just false.”

    Bernadette Atuahene, a property law scholar who has studied Detroit’s property tax foreclosure crisis, says she and other activists with the Coalition for Property Tax Justice, are “overjoyed” by the council’s action Tuesday. She contends the independent analysis will substantiate the University of Chicago’s study and force the city to reform assessments.

    “The key is that you cannot fix a problem until you admit you have one,” Atuahene tells Metro Times. “I hope with the independent evaluator, we all agree on what has been so painfully obvious, we still have a problem, the lower valued homes and Detroit are still being assessed in violation of the Michigan Constitution.”

    More than a dozen Detroiters called on the council to approve the contract with IIAC on Tuesday and admonished the Duggan administration for failing to meet the February deadline to hire an independent evaluator.

    “Passing this contract is long overdue,” Michael Thomas Hart told the council. “City council should pass this, not only because it’s required by law, but also because it’s the right thing to do.”

    Duggan’s administration said it would have been nearly impossible to secure the contract in just three months, explaining that the standard procurement process typically takes about six months. The administration also said the city council requested multiple changes, prompting more delays.

    Only time will tell whether Detroiters are still being cheated on their taxes.

    “The University of Chicago already did the study but Alvin Horne keeps saying that it’s not legitimate,” Atuahene says. “Now that the city is doing the study itself with a trusted entity, the IAAO, he can no longer say the study is illegitimate.”

    Steve Neavling

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  • Wayne County treasurer rejects moratorium on foreclosures despite troubling study

    Wayne County treasurer rejects moratorium on foreclosures despite troubling study

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    Lee DeVito

    Detroit City Council is calling on Wayne County to halt owner-occupied house foreclosures this year.

    Wayne County Treasurer Eric Sabree is defying demands to impose a moratorium on owner-occupied home foreclosures after a study suggested the city is illegally overtaxing houses worth less than $35,000.

    In a statement to Metro Times on Thursday, Sabree said he will not pause foreclosures amid calls from the Detroit City Council and activists to do so.

    “This year, the number of foreclosed properties is notably lower compared to previous years,” Sabree said. “This decline can be attributed to homeowners being given time to catch up over the past 4 years, alongside increased availability of assistance programs and community outreach in the Wayne County Treasurer’s Office.”

    Last month, Detroit City Council unanimously passed a resolution calling on the treasurer to stop owner-occupied foreclosures on houses valued at less than $30,000 because illegally overassessed property values would likely force many lower-income residents out of their homes.

    According to a study by the University of Chicago’s Harris School of Public Policy, the city of Detroit is cheating lower-income residents by illegally and disproportionately overtaxing homes worth less than $35,000. By contrast, owners of the highest value homes in Detroit are far less likely to be overtaxed.

    The study found that Detroit overassessed the value of 72% of the homes worth less than $34,700. A vast majority of the homes worth more than $35,000 were not overassessed, according to the study.

    Activists for the Coalition for Property Tax Justice, a group that advocates for homeowners in Detroit, championed the call for a moratorium, saying the city “systematically overassessed” the lowest value homes.

    Bernadette Atuahene, a property law scholar who has studied Detroit’s property tax foreclosure crisis, said Sabree’s failure to impose a moratorium will unfairly cost residents their homes.

    “Treasurer Sabree is ignoring the demands of the City Council to cruelly foreclose on the homes of Detroiters who may be in foreclosure due to illegally inflated property taxes,” Atuahene told Metro Times in a statement. “The power of the County to take someone’s home is an enormous responsibility and should be wielded with extreme caution. However, Treasurer Sabree has chosen to recklessly foreclose on hundreds of homes valued under $34,700 — a decision that is morally, economically, and legally irresponsible.”

    The coalition has been behind a separate push to compensate an untold number of Detroit homeowners who were overtaxed for their homes more than a decade ago. Between 2010 and 2016, the city of Detroit overtaxed homeowners by at least $600 million.

    The Michigan Constitution prohibits property from being assessed at more than 50% of its market value. Between 2010 and 2016, the city assessed properties at as much as 85% of their market value.

    In his statement, Sabree said his office supports removing some homes from the list of foreclosures, but not because of the study.

    “Some homeowners who face extreme financial hardships may be offered an opportunity to apply for City of Detroit exemption and property tax assistance and may be considered for foreclosure removal — we are requesting this through the courts,” he said.

    The city council also called on Mayor Mike Duggan’s administration to reduce property taxes for low-value homes because of the study’s findings. But the city’s assessor, Alvin Horhn, called the University of Chicago study “utter nonsense” and “politically driven.”

    Metro Times couldn’t reach council President Mary Sheffield for comment.

    Steve Neavling

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  • Detroit City Council takes action after study suggests lowest valued homes were overtaxed

    Detroit City Council takes action after study suggests lowest valued homes were overtaxed

    Steve Neavling

    The Spirit of Detroit statute outside of city hall.

    The Detroit City Council is calling for a reduction in property taxes for low-valued homes and a moratorium on owner-occupied foreclosures after a study suggested the city is illegally overtaxing houses worth less than $35,000.

    The council unanimously passed the resolutions on Tuesday, a day after housing activists held a news conference about the University of Chicago’s Harris School of Public Policy study.

    “While we have undoubtedly had some key victories in our attempt to restore dignity to impacted homeowners and provide restitution, none of it has been done without a fight and a willingness to stay vigilant,” council President Mary Shefield said. “The most egregious part of the systemic overassessment of properties in Detroit has been the issue of regressivity, which is when low-value homes are assessed at a higher percentage of their true market value than are high-value homes. While we recognize the assessor’s job is difficult, the stakes are too high to sit idly by while the city’s lowest-valued homes are consistently overassessed.”

    It’s unlikely that Mayor Mike Duggan’s administration is going to lower assessments because Detroit Assessor Alvin Horhn called the study “utter nonsense” and “politically driven.”

    Horhn said the methods used by the University of Chicago “violate Michigan tax law and the practices that every assessor in Michigan is legally required to follow.”

    It isn’t yet clear whether Wayne County Treasurer Eric Sabree plans to consider reducing assessments for homes valued at less than $35,000. Metro Times is awaiting a response from him.

    Activists for the Coalition for Property Tax Justice, a group that advocates for homeowners in Detroit, called on the council to address the assessments.

    Bernadette Atuahene, a property law scholar who has studied Detroit’s property tax foreclosure crisis, called the council’s resolutions “an amazing milestone in our fight for property tax justice.”

    “The City Council finally acknowledged the continued over assessments and unanimously demanded that the Duggan administration and the County Treasurer take action to correct the ongoing property tax injustice,” Atuahene said in a statement. “Now Treasurer Sabree and the Duggan administration must follow these resolutions with action.”

    The group has been behind a separate push to compensate an untold number of Detroit homeowners who were overtaxed for their homes more than a decade ago. Between 2010 and 2016, the city of Detroit overtaxed homeowners by at least $600 million.

    The Michigan Constitution prohibits property from being assessed at more than 50% of its market value. Between 2010 and 2016, the city assessed properties at as much as 85% of their market value.

    The latest study suggests that homes valued at less than $35,000 are disproportionately overassessed. By contrast, the highest valued homes in the city are the least likely to be overassessed, according to the study.

    Activists are worried about another wave of foreclosures based on inflated property taxes on the lower valued houses, which tend to be owned by people struggling financially.

    Steve Neavling

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  • Detroit illegally inflated taxes on lowest value homes, study suggests

    Detroit illegally inflated taxes on lowest value homes, study suggests

    Detroit activists are calling for action after a recent study suggested the city is cheating lower-income residents by illegally and disproportionately overtaxing homes worth less than $35,000.

    By contrast, owners of the highest value homes in Detroit are far less likely to be overtaxed, according to the study by the University of Chicago’s Harris School of Public Policy.

    The study found that Detroit overassessed the value of 72% of the homes worth less than $34,700. A vast majority of the homes worth more than $35,000 were not overassessed, according to the study.

    “We find evidence of systematic regressivity: high-priced homes are more likely to be underassessed and low-priced properties are more likely to be overassessed,” the study states.

    In a statement to Metro Times, Detroit Assessor Alvin Horhn dismissed the claims in the study as “utter nonsense” and “politically driven,” saying that “any claim that homes today are systemically overassessed is just false.”

    Horhn said the methods used by the University of Chicago “violate Michigan tax law and the practices that every assessor in Michigan is legally required to follow.”

    On Monday, activists for the Coalition for Property Tax Justice, a group that advocates for homeowners in Detroit, called on the Detroit City Council to address the overassessments by sending the findings to the Board of Review for inspection.

    The council approved a new property tax ordinance, supported by the coalition, in November 2023 that allows council members to send the data to the Board of Review. In the past, that process had to be initiated by individual homeowners.

    The council will consider the proposal Tuesday, and dozens of residents are expected to speak in support of the measure.

    Activists are also urging Mayor Mike Duggan’s administration to reduce assessments by 30% for all houses valued below $35,000.

    Calling the latest findings “shocking,” Bernadette Atuahene, a property law scholar who has studied Detroit’s property tax foreclosure crisis, pledged to help residents end the overassessments.

    “We now have evidence that the lower value homes continue to be systemically overassessed, and we are here to put a stop to it,” Atuahene said at a news conference on Monday afternoon.

    She added, “We have tens of thousands of homes that are still being overassessed. We need systemic change.”

    Atuahene was among numerous activists who previously called on the city to correct inflated property value assessments that began more than a decade ago. Between 2010 and 2016, the city of Detroit overtaxed homeowners by at least $600 million.

    The Michigan Constitution prohibits property from being assessed at more than 50% of its market value. Between 2010 and 2016, the city assessed properties at as much as 85% of their market value.

    During the same period, roughly one quarter of the homes in Detroit were foreclosed due to delinquent property taxes, a rate not seen since the Great Depression.

    Activists are worried about another wave of foreclosures based on inflated property taxes on the lower value houses, which tend to be owned by people struggling financially. To stem the tide, activists are calling on Wayne County Treasurer Eric Sabree to halt foreclosures of owner-occupied homes.

    “It’s wrong for the county to foreclose on homes that the city has been illegally overtaxing,” AJ Braverman, chief of staff for the Coalition for Property Tax Justice, said.

    Horhn countered that the city has fixed its assessments and stands by them.

    “We spent millions modernizing the process and our new assessments have been reviewed and approved by the State Tax Commission,” Horhn said. “The Assessor’s office has added staff, new technology and has a robust property tax exemption program for low-income residents. The problems of a decade ago have been resolved. For any individual property owner who feels their proposed assessment may be incorrect, we encourage them to file an appeal.”

    Steve Neavling

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