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Detroit tax foreclosures fall for third straight year

City of Detroit

After years of being ravaged by property tax foreclosures that claimed more than one in three city homes,  Detroit will see fewer than 5,000 properties go to the annual Wayne County tax auction this fall.

The county announced preliminary 2018 tax foreclosure numbers Friday. They show the county is set to foreclose on 4,676 properties this year, with 1,499 of them occupied properties.

That’s a 26% decline in overall foreclosures, and a 22% decline in occupied foreclosures, since last year. This year’s numbers are down sharply from 2015, when the county foreclosed on nearly 25,000 properties and over 9,000 occupied properties.

Wayne County Treasurer Eric Sabree says a “combination of things” account for the decline.

“The economy is better. It’s a little better,” Sabree said. “People are more aware. And then the hard work that we do, with all the partners that we have, letting people know what their options are.”

Sabree and Detroit Mayor Mike Duggan credit a number of recent, more aggressive measures for bringing tax foreclosure numbers down. City workers and community groups went door-to-door to visit many homes at risk of foreclosure. A 2015 temporary change to state law reduced interest and penalties on payment plans for delinquent homeowners, making those plans more affordable.

And a lawsuit settled earlier this month mandated that Detroit begin notifying eligible residents about its low-income property tax exemption, and make that exemption easier to apply for. The city now acknowledges that many Detroit homeowners were foreclosed over taxes they shouldn’t have had to pay.

Partly as a result of that settlement, the city has also expanded its right of first refusal program. That allows cities to buy back homes the county has already foreclosed on before auction. This year, Detroit aims to take back at least 300 homes, then pass them onto the United Community Housing Coalition, which will work with the current occupants on a buy-back plan.

Michele Oberholtzer, tax foreclosure prevention coordinator for the Coalition, says the program helps stem the tide of blight and displacement tax foreclosure has caused in Detroit, with some long-time residents uprooted from their homes and neighborhoods.

“We’re so grateful for the opportunity to reverse that script and say, ‘Actually, we do recognize that you, the person who made this your home, you do have an additional value to this neighborhood, and we want you to stay there and become the owner,’” Oberholtzer said.

City and county officials say they expect this year’s final number of occupied foreclosures to decline even further because of the program. Sabree said Friday he’s extended the deadline until the end of this month, and encouraged more eligible residents to apply.

However, the number of homes the program ultimately saves depends on how much money the Coalition and its fundraising partners can raise.

Duggan has asked the Detroit City Council to approve up to $5 million in funding for the buy-backs next week. Oberholtzer said the groups have raised over $1 million so far, including $275,000 the city is required to kick in because of the legal settlement. Last year, a pilot version of the project covered 80 homes for about $300,000.

Sarah Cwiek joined Michigan Public in October 2009. As our Detroit reporter, she is helping us expand our coverage of the economy, politics, and culture in and around the city of Detroit.
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