If you owned a home in Detroit over the past decade, you had more than a one in three chanceof being pulled into foreclosure. It might not be because you failed to pay your mortgage, and it could happen even if you owned your home outright. Over-inflated property taxes and inflexible state laws have created a cycle of foreclosures and blight in the heart of a once-great city.
Michigan’s housing politics, where unseen forces from on high can cripple residents’ ability to survive and prosper, mirror the hardened geographic and racial divisions that have tugged at the fabric of democracy in the state. We all know the stories: the Flint lead crisis, “right-to-work” laws undermining collective bargaining, unconscionable water shut-offs in Detroit, armies of unelected emergency managers taking control of majority-black cities and school districts.
Abdul El-Sayed, running to become the first Muslim-American governor in US history, may initially seem an unlikely figure to bridge Michigan’s divides—until you hear his story. His father immigrated from Egypt in the 1970s. His white Christian stepmother hails from rural, thinly populated Gratiot County, right in the center of the state. Members of his family voted for Trump, while others fear the impact of his policies on Muslims like them.
On Monday, El-Sayed, a medical doctor and the former director of Detroit’s health department, released an urban agenda that highlights affordable housing as the key to getting Michigan’s cities back on track. El-Sayed is certainly running to the left of the current Democratic gubernatorial front-runner, former state Senate minority leader Gretchen Whitmer. But it’s his bid to revive Michigan’s historic democracy deficit that should draw real interest.
El-Sayed stresses the commonality of the working class’ shared challenges—whether urban or rural—while endorsing a progressive agenda to end the moral tragedies of suppression and predation. “All of us define ourselves by where we live,” El-Sayed told me in an interview. “It’s our safe space to retreat to. When you think of the rate of foreclosure in Detroit in owned housing, and rate of eviction in rental housing, you’re asking people to grow without roots.”
While the housing crisis in many big American cities focuses on more building to meet demand, in Detroit and throughout Michigan that’s not the problem. “Our challenges involve keeping people in homes in the first place,” said El-Sayed. The solutions lie in reversing a top-down process littered with inequities.
While the state’s tax-foreclosure system is not the only policy producing bad outcomes for Michigan, it’s worth explaining the insanity of how it works. Under Michigan law, counties must foreclose on homes if property tax debts aren’t paid within three years. Counties must impose interest rates as high as 18 percent per year, which adds to the cost. This cycle of debt becomes impossible to climb out from, especially if the homeowner suffers from intergenerational poverty. It has led to an epidemic of tax foreclosures, even over underpayments as little as $8.41.
Detroit property tax rates are among the highest in the country, in part because of collapsing property values after the housing bubble burst. And for many years, Wayne County, home to Detroit, didn’t reassess properties to their current, depressed value, which would have decimated county revenues. As a result, according to one study from Wayne State Law School, from 2009 to 2015, 55 to 85 percent of all properties in Detroit were being assessed at more than half of the market value of the home, which violates the state Constitution. “Some people in Detroit are paying more than the value of their home every year in taxes,” El-Sayed said. “If that happened in the suburbs, people would be up in arms.”
Speculators often squat on properties by paying a minimal amount at auction and waiting to see if property values recover and make the land more profitable for building. If things don’t change, the county takes the property back in a tax foreclosure and the speculators buy it again. This churn creates endless blight, as developers hoard available land. Persistent vacancies devastate communities and hold them back from revitalization. The state’s attempt to prevent this abuse have failed miserably.
A long-awaited 2017 reassessment project lowered taxes for 94 percent of Detroit homeowners. Still, properties valued at $20,000 or less may still be paying more than twice the legal limit for their property taxes. In addition, three programs designed to protect homeowners—a now-defunct state repayment plan, a poverty exemption for tax foreclosures, and an appeals process for homeowners who believe their taxes were over-assessed—involve cumbersome applications and mountains of red tape. Since Michigan counties have enjoyed surpluses from the wave of tax foreclosures, it stands to reason that they would throw up barriers to ending the gravy train. Wayne County, which has foreclosed on over 160,000 properties since 2002, practically relies on evicting homeowners to prop up its budget.
This combination of high poverty and displacement proliferates amid what looks seriously like corruption. It affects everything in Detroit, from schools to infrastructure to social cohesion. It’s a signature symptom of pervasive oppression, where white politicians in Lansing dictate how black lives will be addressed.