More than 100,000 Detroit families have lost their homes due to illegal tax foreclosure

Houses for sale in Detroit. Image: Getty.

A society’s standards, the folk wisdom goes, are all that keeps it from sliding into moral ruin. The threat of chaos is all around us, we’re told, and our standards act as a sort of gate at the kingdom’s edge. Fail to closely guard their boundaries, and society is left open to the threat of marauding lawlessness.

So: should you find yourself in grinding poverty, and resort to petty shoplifting to avoid starving, there’s a chance you’ll be smacked with a multi-year prison sentence for the violation. Or lift a few cheap items from the world’s largest retail empire in the hopes that you and your children might outrun the jaws of poverty, you risk being robbed of life itself. Such is the fate we offer to the most despised among us. Breach one of our sacred standards, and see it enforced with ruthless efficiency.

But standards are funny things. One might rightly think that a nation even remotely serious about its standards would work to apply them evenly across the society. Yet we know this to be a world bearing little resemblance to our own: we know, with agonising familiarity, that those who possess the material comfort to follow every law and social expectation imaginable often defy them in clear and extravagant ways, and often do so without a whisper from the guardians at the gate.

In recent years, both the horror of the first reality, and the moral hypocrisy of the second, have been on startling display in my hometown of Detroit, where communities are being pounded by the nation’s largest wave of property tax foreclosures since the Great Depression. No one has followed the crisis, and the staggering managerial incompetence behind it, with greater care and precision than Professor Bernadette Atuahene, a professor at Chicago-Kent College of Law, and visiting professor at Wayne State Law School. In a guest blog for the ACLU of Michigan, she writes:

“Between 2011 and 2015, one in four Detroit properties were subject to property tax foreclosure.  (…) Local government has caused this crisis. One of our most daunting research findings reveals that between 2009 and 2015, the Detroit Assessment Division assessed between 55 per cent and 85 per cent of homes at rates that violated the Michigan Constitution, which states that a property cannot be assessed at more than 50 percent of its market value.

“More than 100,000 Detroit families have lost their homes due to these illegal tax foreclosure. African-Americans have been most deeply impacted.”

It’s worth pausing to take in the appalling scale of this man-made disaster, along with the managerial soullessness that made it possible.


Over the course of several years, the City of Detroit and the Wayne County Treasury have illegally over-assessed the value of tens of thousands of properties. It then uses these bogus assessments to render the occupants of those properties homeless. Once plundered, properties are then funnelled into the county’s Tax Foreclosure Auction, where many are resold at fire sale prices.

But like any good American horror story, the evil must be gratuitous. As America’s poorest big city, many of Detroit’s homeowners qualify for what’s called the Poverty Tax Exemption: a pathway to wiping out one’s property tax burden completely.

But notoriously bad communication on the part of the city has meant that most homeowners don’t realise that the exemption exists. Even if they did, the process for securing the exemption is a janky, unnavigable mess. The outcome should bring shame to its shameless architects: a stadium’s worth of people, kicked out on their ass, for nonpayment of taxes the law says they were too poor to pay.

It isn't enough to say a few disinterested technocrats made a constitutional goof that ended regrettably. What's happened, and continues to happen, here must be made plain: a clique of state-appointed bandits have illegally plundered 100,000 poor, mostly black Detroiters of their livelihoods, and then ridiculed them as irresponsible for falling victim to the shakedown.

It’s worth mentioning that both the mayor’s and county treasurer’s office have cobbled together some modest efforts to assist homeowners at risk of foreclosure. The institution of payment plans and a citywide reassessment of property values have genuinely helped some. Despite this, the tidal wave rolls onward, swallowing everything in its path. And when the destruction is entirely avoidable, that we’ve only thrown life preservers to some is a sad commentary on our moral imaginations.
Yet like so many crises launched at the hands of men, ours has gone unresolved not for any lack of solutions. Those are obvious.

City and county officials could, for instance, follow the lead of the Coalition to End Unconstitutional Tax Foreclosures, which has pushed, with factual and moral authority, a set of straightforward fixes:

(1) An immediate end to unconstitutional assessments. (2) Some form of reparations for those illegally booted from their homes. (3) And lastly, a moratorium on all tax foreclosures until assessments meet their constitutionally required standards.

And there’s that word again.

At first glance, a standard being imposed on one group of people but not another looks like textbook double-standard-shenanigans. The city plunders 100,000 poor, mostly black homeowners, forcing them deeper into a chamber of economic misery. And when confronted with the hellscape they authored, officials blame the banished for failing to follow the letter of an illegible law. Meanwhile, those same officials act in extravagant defiance of their state’s constitution – and not only do so with impunity, but are crowned leaders of a heroic comeback along the way.

And there’s the big reveal, unmistakable to anyone who bothers to look. It isn’t that ours is a society with two separate and unequal standards for two different groups of people. It’s that ours is a single standard society: where one set of rules is imposed on the most vulnerable with brutal force, while the wealthiest and most powerful act as guardians of a gate they dismantle whenever convenient.

 
 
 
 

A growing number of voters will never own their own home. Why is the government ignoring them?

A lettings agent window. Image: Getty.

The dream of a property-owning democracy continues to define British housing policy. From Right-to-Buy to Help-to-Buy, policies are framed around the model of the ‘first-time buyer’ and her quest for property acquisition. The goal of Philip Hammond’s upcoming budget is hailed as a major “intervention” in the “broken” housing market – is to ensure that “the next generation will have the same opportunities as their parents to own a home.”

These policies are designed for an alternative reality. Over the last two decades, the dream of the property-owning democracy has come completely undone. While government schemes used to churn out more home owners, today it moves in reverse.

Generation Rent’s new report, “Life in the Rental Sector”, suggests that more Britons are living longer in the private rental sector. We predict the number of ‘silver renters’ – pensioners in the private rental sector – will rise to one million by 2035, a three-fold increase from today.

These renters have drifted way beyond the dream of home ownership: only 11 per cent of renters over 65 expect to own a home. Our survey results show that these renters are twice as likely than renters in their 20s to prefer affordable rental tenure over homeownership.

Lowering stamp duty or providing mortgage relief completely miss the point. These are renters – life-long renters – and they want rental relief: guaranteed tenancies, protection from eviction, rent inflation regulation.

The assumption of a British ‘obsession’ with homeownership – which has informed so much housing policy over the years – stands on flimsy ground. Most of the time, it is based on a single survey question: Would you like to rent a home or own a home? It’s a preposterous question, of course, because, well, who wouldn’t like to own a home at a time when the chief economist of the Bank of England has made the case for homes as a ‘better bet’ for retirement than pensions?


Here we arrive at the real toxicity of the property-owning dream. It promotes a vicious cycle: support for first-time buyers increases demand for home ownership, fresh demand raises house prices, house price inflation turns housing into a profitable investment, and investment incentives stoke preferences for home ownership all over again.

The cycle is now, finally, breaking. Not without pain, Britons are waking up to the madness of a housing policy organised around home ownership. And they are demanding reforms that respect renting as a life-time tenure.

At the 1946 Conservative Party conference, Anthony Eden extolled the virtues of a property-owning democracy as a defence against socialist appeal. “The ownership of property is not a crime or a sin,” he said, “but a reward, a right and responsibility that must be shared as equitable as possible among all our citizens.”

The Tories are now sleeping in the bed they have made. Left out to dry, renters are beginning to turn against the Conservative vision. The election numbers tell the story of this left-ward drift of the rental sector: 29 per cent of private renters voted Labour in 2010, 39 in 2015, and 54 in June.

Philip Hammond’s budget – which, despite its radicalism, continues to ignore the welfare of this rental population – is unlikely to reverse this trend. Generation Rent is no longer simply a class in itself — it is becoming a class for itself, as well.

We appear, then, on the verge of a paradigm shift in housing policy. As the demographics of the housing market change, so must its politics. Wednesday’s budget signals that even the Conservatives – the “party of homeownership” – recognise the need for change. But it only goes halfway.

The gains for any political party willing to truly seize the day – to ditch the property-owning dream once and for all, to champion a property-renting one instead – are there for the taking. 

David Adler is a research association at the campaign group Generation Rent.

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