Congressman John Conyers, the dean of Congress, is the latest to add his voice to a growing call for a moratorium on property tax foreclosures in Wayne County after Monday’s deadline.
About 31,000 homeowners as of last month are facing foreclosure by the Wayne County Treasurer’s Office.
“I remain gravely concerned over the fate of the tens of thousands of Wayne County residents that could lose their homes to property tax foreclosure. While I greatly appreciate the hard work done by the Wayne County Treasurer’s Office to keep people in their homes, including providing an extension, additional time is needed to protect our residents from being kicked out of their homes,” Conyers said. “Detroiters already suffered through a foreclosure crisis caused by the discriminatory lending policies and incompetence of our nation’s biggest lending institutions. We cannot tolerate another round of foreclosures and eviction, much less one carried out by our local government that has a duty to serve our citizens.”
Out of the 62,000 parcels of land that were served, 17,000, representing 27 percent, have paid their 2012 taxes and are out of foreclosure. On top of that, there are 10,000 owners of land which represents 16 percent of the entire foreclosure list who are on a payment agreement. The deputy county treasurer, David Szymanski, said that as long as those respondents keep up their payments they can avoid foreclosure.
“Despite the economic hardship faced by many Detroit families, too many Detroit homeowners are being obligated to pay taxes when they are eligible for a statutorily-mandated poverty exemption. Furthermore, the City of Detroit has not carried out its duty under Michigan’s Constitution (Art. IX, § 3.) to assess the actual value of properties on an annual basis,” Conyers explained. “The failure of local authorities to fulfill these two legal requirements means that many homeowners owe inaccurate and unreasonable amounts in property taxes. In some cases, the owed taxes exceed the actual value of the home.”
In March, about 2000 homeowners were in the process of making payment arrangements, which accounted for 3 percent of the foreclosure list. The distressed owner occupant extensions, meaning individuals who have not owed any taxes prior to 2012, represents another 1000 homeowners, or 1.5 percent. Those individuals have been given a year to pay what they owe for 2012.
The Treasurer’s Office at the time said it had 1000 owners in what is called hold status, basically homeowners who are facing dire financial issues like bankruptcy. About 400 of the 1000 are already in bankruptcy.
Given the statistical breakdown, the Treasurer’s Office noted that about 31,000 parcel owners are still facing foreclosure, which is 50 percent of Detroiters. But because of the canvassing Szymanski and the office have been doing, they discovered that 10,500 of the 31,000 parcels are actually vacant land with no structure which basically means 34 percent are vacant land. Another 8,000 of the 31,000 parcels are structures that have been abandoned, accounting for 26 percent. The occupied structures represent 12,500 parcels or 40 percent of the 31,000 foreclosure list. The Treasurer’s Office believes that among these numbers there are landlords who are collecting rent and not paying taxes.
“Finally, foreclosing on occupied homes actually hinders the goal of raising revenue. Selling these homes at auction only gathers a tiny fraction of the revenues owed in taxes, while the eviction of families from their homes increases blight, depresses surrounding property values and destabilizes neighborhoods,” Conyers said. “For these reasons, I strongly urge Wayne County Treasurer Raymond Wojtowicz to immediately implement a moratorium on property tax foreclosures until there is an appropriate remedy for these families and our community.”
Szymanski, the deputy treasurer, said a moratorium will not be granted.
“A moratorium would likely accomplish nothing more than delaying the inevitable and in that delay the tax situation will only get worse. Another year of taxes added to the bill with another year of interest making it more difficult for the taxpayer to fashion a solution to foreclosure,” Szymanski said. “We have found the earlier we can intervene the more likely we are to avoid foreclosure. A moratorium will not be granted by the treasurer. We encourage people to get into the payment arrangements and then work on legislation to address what they see as the problems.”
He said he has yet to see any legislation introduced by the moratorium advocates that might address their claims.
“In the meantime it is treasurer Wojtowicz who sought and gained access to Step Forward funding. It was treasurer Wojtowicz who sought and received legislation reducing the interest rate from 18 to 6 percent with retroactivity. This office acts to assist distressed taxpayers with real action,” the deputy treasurer said.
Wojtowicz responded to several letters calling for a moratorium for homeonwers facing foreclosure.
“You must understand the necessity of collection of taxes. It is taxes that fund essential government services. Without payment of taxes government cannot provide essential services such as police and fire protection, schools or trash collection,” Wojtowicz said. “If property taxes are not paid, we do not have an ability to turn off services to only those who do not pay. We cannot refuse to send the fire department to a home if the taxes are not paid.”
Szymanski added, “We deeply appreciate Congressman Conyers’ assistance in reaching out to distressed taxpayers but believe a moratorium is not appropriate. With the programs this office offers, each taxpayer has the ability to receive a one-year moratorium through the Distressed Owner Occupant Extension which gives the owner/occupant of residential property an additional year to pay delinquent taxes.
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