Since the 2008 housing crisis, Detroit homeowners have had difficulty paying their tax bills. Additional relief may now be on the way.
In January, a report by the Detroit News and Reveal from The Center for Investigative Reporting found that Detroit homeowners were overtaxed by a total of $600 million between 2010 and 2017. Those incorrect tax bills greatly contributed to the subsequent tax foreclosure crisis—the Wayne County Treasurer’s Office foreclosed on more than 100,000 Detroit homes between 2012 and 2017.
Prior to and since the report came out, government officials and activists have been thinking of ways to reduce the number of foreclosures and potentially provide restitution to those who were overtaxed.
Yesterday, some good news arrived for those Detroit homeowners.
On March 2, Gov. Gretchen Whitmer signed into law the Pay As You Stay legislation, which eliminates fees and interest for those behind on their property taxes, and seeks to get them into a payment plan. Under the program, low-income homeowners who successfully apply for Homeowner Property Tax Assistance, which eliminates all or part of one’s property tax bill, will not be foreclosed on.
From there, the amount owed to the county will be limited to back taxes or 10 percent of a home’s taxable value—whichever is less. The city estimates that monthly bills for many homeowners will go down from around $150 to $25.
The other bit of relief may come in the future. After the news about overtaxation broke, many were critical of Mayor Mike Duggan’s remarks. “If you’re assessed too much, there’s a whole series of measures that you can take and a lot of people took advantage of those measures,” he said in an interview on the podcast Reveal. “I don’t know how you go back on past years where people didn’t avail themselves of the rights. What we’re trying to do is fix it going forward.”
But his tune changed recently. The Detroit News reports that Duggan has signaled he’s open to financial compensation for those who were overassessed, but only between 2010 and 2013. Duggan became mayor in 2014, after which he says the issue was mostly corrected.
While he didn’t offer specifics, Duggan said he’s ordered the city’s law department to look into options.
The News also summarized a memo by David Massaron, the city’s chief financial officer, to Detroit City Council, in which he wrote that the cost of repaying people would be “so enormous” it would require higher property taxes, and city services would suffer.