In 2011, Detroit native Anna Bolden purchased her first home. She purchased the brick bungalow in a tax foreclosure auction for $4,800, according to the Detroit News. Yet when Bolden received her first tax bill from the Wayne County treasurer, her bill was $2,600, as if her home was valued at $57,000.
“My taxes shouldn’t be this high,” Bolden told the Detroit News. “My house was only $5,000, why am I paying this money?”
In the years that followed, Bolden’s home was assessed at a rate higher than its true value. Finally, in 2017, local tax officials lowered the value to $28,000, after the property was reappraised.
Bolden, who currently owes the Wayne County treasurer at least $4,600 in back taxes, is scared she will lose her home to foreclosure. And she’s not alone.
A recent analysis by the Detroit News and Reveal from The Center for Investigative Reporting found that Detroit’s tax assessment has led to homeowners being overcharged to the tune of an estimated $600 million after the assessment failed to decrease property values following the Great Recession.
The Michigan Constitution makes it unlawful to assess properties at more than 50 percent of market value. However, Detroit city officials violated this law by assessing 55 to 85 percent of its property. This overassessment has already resulted in 100,000 Detroit residents losing their homes. In response, Detroit’s City Hall has undergone a state-ordered reappraisal of properties in 2017, to correct the problem. However, the mistake has already been made as many faced foreclosure as a result of back taxes. And while Detroit is acknowledging its failure, there is little that can be done.
While taxpayers do have the power to appeal, it is a lengthy process, housing advocates told The Detroit News.
According to Detroit Mayor Mike Duggan, current law will not allow government payouts to correct past mistakes; plus Detroit would not be able to handle repayment financially as it has just completed a bankruptcy.
Activist and Detroit resident Sonja Bonnet was one of many homeowners who lost their properties due to “illegal and unconstitutional tax foreclosure,” and were never notified that they were eligible for the poverty tax exemption.
“When I lost my home, I didn’t just lose a structure: I lost my health; I lost my footing; I lost confidence in myself,” Bonnett told The Detroit Free Press. “I think that the city really needs to know that when you put the community in these positions, you’re not just taking a building from us. You’re taking the American Dream from us. You’re taking what some of us are so proud to gain in the first place, which is a family home. And when it happened to me, it almost destroyed me. It almost destroyed my family.”