Wayne County Treasurer Eric Sabree is defying demands to impose a moratorium on owner-occupied home foreclosures after a study suggested the city is illegally overtaxing houses worth less than $35,000.
In a statement to Metro Times on Thursday, Sabree said he will not pause foreclosures amid calls from the Detroit City Council and activists to do so.
“This year, the number of foreclosed properties is notably lower compared to previous years,” Sabree said. “This decline can be attributed to homeowners being given time to catch up over the past 4 years, alongside increased availability of assistance programs and community outreach in the Wayne County Treasurer’s Office.”
Last month, Detroit City Council unanimously passed a resolution calling on the treasurer to stop owner-occupied foreclosures on houses valued at less than $30,000 because illegally overassessed property values would likely force many lower-income residents out of their homes.
According to a study by the University of Chicago’s Harris School of Public Policy, the city of Detroit is cheating lower-income residents by illegally and disproportionately overtaxing homes worth less than $35,000. By contrast, owners of the highest value homes in Detroit are far less likely to be overtaxed.
The study found that Detroit overassessed the value of 72% of the homes worth less than $34,700. A vast majority of the homes worth more than $35,000 were not overassessed, according to the study.
Activists for the Coalition for Property Tax Justice, a group that advocates for homeowners in Detroit, championed the call for a moratorium, saying the city “systematically overassessed” the lowest value homes.
Bernadette Atuahene, a property law scholar who has studied Detroit’s property tax foreclosure crisis, said Sabree’s failure to impose a moratorium will unfairly cost residents their homes.
“Treasurer Sabree is ignoring the demands of the City Council to cruelly foreclose on the homes of Detroiters who may be in foreclosure due to illegally inflated property taxes,” Atuahene told Metro Times in a statement. “The power of the County to take someone’s home is an enormous responsibility and should be wielded with extreme caution. However, Treasurer Sabree has chosen to recklessly foreclose on hundreds of homes valued under $34,700 — a decision that is morally, economically, and legally irresponsible.”
The coalition has been behind a separate push to compensate an untold number of Detroit homeowners who were overtaxed for their homes more than a decade ago. Between 2010 and 2016, the city of Detroit overtaxed homeowners by at least $600 million.
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.
In his statement, Sabree said his office supports removing some homes from the list of foreclosures, but not because of the study.
“Some homeowners who face extreme financial hardships may be offered an opportunity to apply for City of Detroit exemption and property tax assistance and may be considered for foreclosure removal — we are requesting this through the courts,” he said.
The city council also called on Mayor Mike Duggan’s administration to reduce property taxes for low-value homes because of the study’s findings. But the city’s assessor, Alvin Horhn, called the University of Chicago study “utter nonsense” and “politically driven.”
Metro Times couldn't reach council President Mary Sheffield for comment.
