The city of Detroit made an extraordinary admission about five years ago: It overtaxed homeowners by at least $600 million between 2010 and 2016.
The illegal, inflated property tax assessments resulted in an estimated 100,000 Detroiters, most of them Black, losing their homes to foreclosure.
The Michigan Constitution prohibits property from being assessed at more than 50% of its market value. Between 2010 and 2016, the city assessed properties at as much as 85% of their market value.
To this day, residents have not been compensated for losing their homes or paying more than they owed in property taxes.
The Coalition for Property Tax Justice, a group of advocates for impacted homeowners, is trying to change that. The coalition surveyed more than 200 overtaxed residents to determine how they want to be compensated. The findings were published in a report released Thursday.
“Residents indicated that really no amount of monetary or in-kind compensation could fully repair the harm that the city or county had caused them, their families, and their community,” Alexa Eisenberg, a housing activist and researcher, said at a news conference Thursday. “Residents emphasized that they wanted resources to support them in dealing with the irreparable and intergenerational mental health consequences. They also want the government to apologize and to be held accountable for the wrongs that were committed.”
Eisenberg called for “swift and meaningful compensation.”
Most of the surveyed residents prioritized cash payments as compensation. But that’s likely not going to happen because Mayor Mike Duggan’s administration insists that state law prohibits the city from providing cash payments or tax credits to any of the overtaxed residents.
Activists say they disagree and are calling on Michigan Attorney General Dana Nessel to give her legal opinion.
“As a lawyer and law professor, I believe the legal logic is flawed,” said Bernadette Atuahene, a professor at Chicago-Kent College of Law and a member of the Coalition for Property Tax Justice. “There are all kinds of programs where money and resources are going to various individuals. The legal logic, in my professional opinion, is suspect, which is why we need to get the attorney general to weigh in on this.”
Duggan and the city council have tentatively agreed to spend $6 million on resources to residents who were overassessed, which only represents 1% of the amount that was over-billed...
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