In Detroit, massive foreclosures strip neighborhoods of people and homes

by @alex_p_kellogg October 6, 2015 5:00AM ET Updated 5:00AM ET

Despite exiting a historic bankruptcy, Motown has yet to find a way to stop property tax crisis that ruins neighborhoods

Jessie West, 64, at her home in Detroit, Michigan. Though she and her two daughters paid their rent every month in good faith, their landlord walked away months ago, never notifying his tenants. The county recently alerted her that the home will be auctioned off as part of a foreclosure proceeding.
Laura McDermott for Al Jazeera America
West's home in Detroit's Lower East Side, where she lives with her two daughters and grandchildren.
Laura McDermott for Al Jazeera America

DETROIT — Jessie West has lived in the same beleaguered neighborhood on Detroit’s Lower East Side for decades.

West, a 64-year-old retiree and a diabetic who lives on Social Security, doesn’t expect to be living on her block much longer. Although she and her two daughters have paid their $950 monthly rent on time for years, their landlord walked away from the property months ago, never notifying them. In early October, a yellow auction notice tacked to their front door informed them that their home, just blocks from downtown and riverfront developments worth millions of dollars, will be auctioned off by the end of the month. The auction is part of an annual tax foreclosure process that is among the largest any city in the United States has ever conducted.

“They want to get us out of Detroit,” says West, who, like many other city residents, believes the foreclosures target poor people and people of color. “That’s just the truth.”

Wayne County, which encompasses the troubled yet sporadically revitalizing city of Detroit, will auction off her home and nearly 25,000 other parcels of Detroit land because of unpaid property taxes. Roughly 8,000 of the nearly 25,000 parcels up for auction this year are occupied homes, according to Loveland Technologies, a Detroit-based company that has been surveying and mapping the city for years. Thousands of foreclosed homes are at risk of being stripped bare by scrappers, and countless people will be displaced.

Slideshow: Jessie West’s last days in her Detroit home

Despite exiting a history-making bankruptcy last year, the city has yet to come close to exiting the foreclosure crisis that cost millions of Americans their homes during the Great Recession. Wayne County has auctioned off more than 60,000 parcels of land because of unpaid property taxes since 2010, sometimes for tax bills of just hundreds of dollars. The vast majority of those parcels are in Detroit. Homes the county can’t sell are handed over to a city-run land bank. Detroit has an estimated 80,000 abandoned and blighted homes, and the owners of as many as a third of the parcels in the city are behind on their taxes.

The size of the problem is one few Western cities could imagine, but it has become unremarkable in Detroit.

“The auction is awful,” says Ted Phillips, the executive director of the United Community Housing Coalition, a local nonprofit that last year used zero-interest loans to help more than 300 Detroit homeowners stay in their homes. “It’s destroying neighborhoods.

The coalition counsels thousands of people on how to get into the payment plans the county offers in order to help them stay in their homes. It does more of this kind of work than any other organization in Detroit.

“These are people who lost their homes because they were poor or they were grossly overassessed or they were unaware that they could have gotten their taxes completely waived,” says Phillips, referring to property tax exemption the city offers to people who live below the poverty line.

Nearly 40 percent of Detroiters live below the poverty line, according to census data, but each year only a few thousand homeowners manage to get on a tax exemption plan offered by the city.

John Roach, a spokesman for Detroit Mayor Mike Duggan, said in an email that city and county efforts to stave off blight have been a “tremendous success.” He noted that state officials have kept roughly 15,000 owner-occupied homes out of foreclosure in the last year alone. Duggan’s administration says it has demolished more than 6,000 homes since he took office in January 2014, and Roach said legal auctions by the city have ensured that 400 vacant homes must be renovated and occupied within a six-month window.

“Keeping families in their homes has been a top priority for this administration,” Roach wrote.

Juanita Westbrooks, 39, talks on the phone outside her home in Detroit on Sept. 18, 2015. Westbrooks bought her home ten years ago in a deal that turned out to be fraudulent. She was able to buy it legally several years later, but has now fallen behind on tax payments.
Laura McDermott for Al Jazeera America
Juanita Westbrooks, 39, talks about her housing situation. "I'm not asking for a handout or a pity party,'' she says. "I go to work every day.''
Laura McDermott for Al Jazeera America

But those efforts won’t keep Juanita Westbrooks, her daughter, her sister or her sister’s two children in their home. Westbrooks, 39, found out her home will be auctioned off in September, even though she bought it twice — once in a scam that cost her thousands of dollars and then a second time from an owner who bought it in the county auction.

When Westbrooks lost her job in 2011, she fell behind on her property taxes. She’s now working for $9 an hour and owes roughly $18,000 in taxes, even though she purchased her home for less than $6,000. Part of the problem, critics say, is that outdated assessments make owners’ tax bills far too high.

Her appeals with the county failed. “I’m not asking for a handout or a pity party,” says Westbrooks, who refused in the past to go on welfare. “I go to work every day.”

County officials say their hands are tied by an amendment to state law passed in 1999 that forces them to seize and sell off properties that are three or more years behind on property taxes.

“Our office has helped a lot of people who don’t manage money well,” says Eric Sabree, a deputy treasurer for the county. “Our tax system is being used like a credit card. It’s one of the things people pay last.” But he admits that some Detroiters like Westbrooks are choosing “between eating and putting gas in your car.”

Juanita Westbrooks, 39, pushes her niece Whitney Sewell, 2, on her bike on the sidewalk outside of her home. She fell behind on her taxes in 2011 after she lost her job. She now works for $9 an hour and owes roughly $18,000 in back taxes even though she purchased her home for less than $6000.
Laura McDermott for Al Jazeera America

County interest rates tied to its payback programs for landowners sit at 18 percent, although a recent amendment to the law allows homeowners who live in their properties to pay far less, just 6 percent. This year began with more than 60,000 Detroit parcels at risk of foreclosure, and the county helped more than 31,000 property owners get into payment plans and exit the foreclosure process. Thousands of others paid part of or all their unpaid taxes. Still, another 60,000 foreclosure notices will be posted in the city after this year’s auction is complete.

This year the county is attempting to collect on more than $194 million in back taxes; the figure was $266 million last year. The county recovered $48 million in back taxes in 2013 and $54 million in 2014.

Yet the auction often affects homeowners who owe less than a thousand dollars in taxes. Changes to state law have barred homeowners from buying back their homes at auction, affecting individual homeowners more than vulture investors or slumlords who can buy back their properties under fresh company names, critics say.

“It’s just depressing,” says Kirk Mayes, the CEO of Forgotten Harvest, a food bank that sometimes ends up serving people who are displaced by the home foreclosure crisis in the city. “It’s like, how many times are you forced to come up with a solution to an unreasonable situation? And the scale of our problems make it so often like that.''

Westbrooks kisses her two-year-old niece Whitney as she sits in her favorite chair. She's not sure where they will live next.
Laura McDermott for Al Jazeera America
Westbrooks combs Whitney's hair.
Laura McDermott for Al Jazeera America

He once headed a neighborhood organization on Detroit’s west side, where blight was common, and says Duggan’s administration is the best the city has had in a long time. Although West and some other residents disagree, a number of other community leaders echo Mayes’ sentiment.

“Now more than in any time in the last decade, we’re more prepared to come up with viable solutions,” says Mayes. “The lights are coming back on. The ambulances are coming back on the road. But we’re still kind of drunk from our inadequacy, and we’re far from expecting the best.”

“It’s absurd the way this situation is managed,” says Jerry Paffendorf, a co-founder of Detroit-based Loveland Technologies, which sells professional mapping services to municipalities and other government entities and studies Detroit’s foreclosure crisis closely. He says having tens of thousands of people go into distress about their living circumstances every year is “just wrong.”

“But they’re doing the best they can in a pretty outlandish situation,” he says of city and county officials.

Loveland estimates that roughly 1 in 6 occupied properties auctioned off last year has already been abandoned. Many homes were stripped of valuables such as copper piping and appliances. Blighted homes often can’t be refurbished and can cost $10,000 to $15,000 to demolish. Meanwhile, millions of dollars in federal funding for blight removal is running out.

The foreclosure notice left on the door of Jessie West's home.
Laura McDermott for Al Jazeera America

On the block where Jessie West lives, the buffer against decay has been her family, and her many relatives, including her mother and three siblings, who all have homes there. Still, roughly 15 homes have become blighted, been foreclosed or been bulldozed by the city on her block in recent years, she says. But not a single streetlight there has been replaced, even though Duggan’s administration has thus far installed 40,000 LED streetlamps in more densely populated and upscale neighborhoods.

“This used to be a pretty, tree-lined street with carpetlike grass and manicured lawns,” says West. “At night in front of my house, it’s total darkness.” She says she and her children will end up with relatives or in a shelter.

“We can’t afford to buy back this house in the county auction, even at a low price,” says West, who has 2- and 6-year-old grandchildren also living in her home. “There are four or five generations of our family on this block. But not for much longer.”

Her family moved to Detroit’s Black Bottom neighborhood from Arkansas in the 1950s. Named after its dark soil, the neighborhood was largely Jewish and Eastern European in the early 1900s, then became poor and black. In the 1960s it was demolished to make way for one of the nation’s first major interstate highways, displacing tens of thousands of people.

The stress from uncertainty has weighed heavily on West and her two daughters for weeks now.

“I’m tired of looking over my shoulder,” says Rolanda West, Jessie's 41-year-old daughter who bakes to make extra money but has struggled to find full-time work, only recently landing a full-time job in a city with few of them.

“I’m tired of wondering if I’m going to have a place to live.''

Jessie West has felt the weight of the looming foreclosure for weeks now. The question of where they will live next is stressful. "I'm tired of looking over my shoulder,'' says West's daughter Rolanda.
Laura McDermott for Al Jazeera America