Sobering report: 20% of Detroiters could lose homes to tax foreclosure this year

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Photos by Steve Neavling

An alarming number of Detroiters are at risk of losing their homes because of delinquent property taxes at a time when the city is desperately trying to stem the flood of departures.

Property taxes are at least a year delinquent on a startling 37% of homes and businesses, and nearly 100,000 properties are facing foreclosure this year – a 23.7% increase over 2013, according to eye-opening tax data analyzed by Loveland Technologies and made available on their website, Why Don’t We Own This?.

Alex Alsup, the chief product officer at Loveland Technologies, estimates that 145,000 people –  or 21% of the city’s 688,000 residents – could lose their homes because of delinquent property taxes this year, further depleting the population.

“Tax foreclosure continues to gut Detroit,” Alsup said. “This is the whole ball game for the future of the city, and palliative solutions won’t cure a systemic problem.”

Detroit’s population has plummeted more than 25% since 2000, largely because of chronic job shortages, poor public services, a failing education system and imposing blight.

In all, property owners are more than $700 million behind in taxes, Alsup said, and that’s a staggering problem for a bankrupt city with an unrelenting demand for social services, law enforcement, fire protection and infrastructure repairs.

The foreclosed homes are sold for as low as $500 in an auction or end up in the hands of the city, which does not have the money to maintain most of the properties. Those city-owned houses and buildings are often gutted by scrappers or torched by arsonists, leading to further decay in neighborhood cores.

Many of the properties in the Wayne County auction are purchased by speculators and slumlords who contribute to the neglect.

Check out highlights of last year’s tax-foreclosure auction.

Trying to combat the increase in foreclosures and blight, Loveland Technologies collects information on each parcel in the city and makes it available on an interactive, online map. It’s no simple task in a city that is geographically large enough to fit Boston, Manhattan and San Francisco.

Loveland Technologies also played a vital role in an unprecedented parcel-by-parcel survey of blight in the 139-square-mile city.

As more properties fall into foreclosure, the cycle of abandonment, arson and blight will continue.

Steve Neavling

Steve Neavling lives and works in Detroit as an investigative journalist. His stories have uncovered corruption, led to arrests and reforms and prompted FBI investigations.