Foreclosures in Detroit - $700 million in uncollected taxes

This essay in the morning paper describes foreclosures in Detroit. The city faces a great challenge. A Citizen's Research Council Report stated that property taxes were paid, in 2011, on only 52% of the city's taxable parcels. And apparently about half of the residential properties were behind in their payments for water.

The writer - Monica Davey - and Gov. Snyder correctly identify a key issue: poverty and joblessness. In 2012, 38% of Detroit households and 58% of resident children under 18 were impoverished. Among residents 25 to 59, only 48% of men and 51 % of women were employed.

The Times website has a graphic showing all or most Detroit buildings subject to foreclosure.

http://www.nytimes.com/2014/06/27/us...nav=photo-spot

There are plenty of people in Detroit who are still in their homes who haven't paid any property taxes in years. If this were to happen in the suburbs, they'd be put out of their house in record time. Why is this?

You neglected to note that Davey also attributes this catastrophic state of affairs to a generation deep philosophy that the city shouldn't require "poor" people to pay their property taxes - and even not-poor people like the ignominious Joann Watson who had to be publiclly shamed into paying and noted for all the world "Who pays more" than what shows up on an obviously incorrect annual property tax bill of about $34. That's the culture in Detroit.

The philosophy seemed to be that "someone else' would prop up the city coffers. Poor people are too put-upon to pay taxes.

Please, I beg you - do young women in Detroit ever ask themselves what might become of their children? What jobs they could ever hope to fill? What homes they could ever hope to have with no preparation, no schooling, no tools? Are they too going to become a generation of squatters, utility and copper thieves, tax dead-beats???

I see so many young women dragging their babies around and I believe these are the same women who never show up to meet with teachers, whose sons have no hope at all of a future - what are their mothers thinking when they decide [[and it is a decision now to go without protection; as we used to say in the 1960's "not to decide is to decide") to procreate so carelessly.

Detroitnerd - DON'T blame the banks for all this. You've said that. The banks are not involved in getting carelessly pregnant. If you have something to say, please first address personal, HUMAN, responsibility.

Wow. Another reason why Post-bankruptcy Detroit has deep holes from which to climb. If this plays out water shut-off will not be an issue. There will be no one left in the water-delinquent houses.

From the Loveland site:

"We've updated Detroit's Tax Distress Map on Why Don't We Own This. It appears only 38% of Detroit property owners are paying property taxes -- that's down from 50% just a year ago.

There are $700 million in uncollected taxes across the city and 100,000 properties subject to foreclosure [[haven't paid taxes in >3 years)."

http://detroityes.com/webisodes/2014...oreclosure.jpg

This page from the same NYT article showing thumbnails of all 46K+ graphically demonstrates the magnitude of the crisis.

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Here Are the 43,634 Properties in Detroit That Were on the Brink of Foreclosure
A mosaic, created with images from Google Maps Street View, shows one of the many enormous challenges facing Detroit as it tries to climb out of debt.

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Originally Posted by Cincinnati_Kid

There are plenty of people in Detroit who are still in their homes who haven't paid any property taxes in years. If this were to happen in the suburbs, they'd be put out of their house in record time. Why is this?

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There's no answer. Honestly there is no answer. If you give the homeowners amnesty, and let them stay in the home, they start anew not paying taxes. If the man is not employed now, does he have any prospects of a job in the near future. Probably not. So he stays in the house. Water cut off. Taxes unpaid. Lights turned. It's no way to live.

A lot of those houses need massive work done. They are fixer uppers! I know people and have relatives who live in those type houses. Many of those houses are 100 years old.

There's no answer. Maybe the city needs to change the tax structure from property-tax dependent to taxes on utility & cell phone dependent. This is what I mean -- if you can't get property taxes, don't charge property taxes. Charge taxes on other things -- food, cell phones, services. The city will have to depend on those type of taxes.

Residential property taxes are way to high in this state and especially Detroit. To add insult to injury they are even higher for renters due to the homestead tax credit. A residential property tax is a tax on 'shelter' a basic human need. Is uncle Sam the worlds most successful tax collecter by taxing value? No he is not, he taxes income with a graduated income tax. Hopefully Gov Snyder fixes the personal taxes in this state with his second term with the same attitude that he changed business taxes. Stupid high property taxes helped destroy enough city's in this state.

http://taxes.about.com/od/statetaxes...rst-states.htm

I wonder how many of those delinquent homes are rental units. The residents are paying rent to the owner who is responsible for taxes and in many cases, water.

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Originally Posted by ABetterDetroit

Residential property taxes are way to high in this state and especially Detroit. To add insult to injury they are even higher for renters due to the homestead tax credit. A residential property tax is a tax on 'shelter' a basic human need. Is uncle Sam the worlds most successful tax collecter by taxing value? No he is not, he taxes income with a graduated income tax. Hopefully Gov Snyder fixes the personal taxes in this state with his second term with the same attitude that he changed business taxes. Stupid high property taxes helped destroy enough city's in this state.

http://taxes.about.com/od/statetaxes...rst-states.htm

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On the other hand, Snyder didn't do himself any favors by taxing senior's pensions either. That's
money they can use for daily survival. My uncle who is 78 years old now pays a extra $150.00 per month in state pension tax. Do the math, $150.00 per month for 12 month's is $1,800.00 per year. Of course the amount paid varies on a case by case basis, but do you think seniors can't use that extra money towards other needs? Snyder is looking out for business and wealthy residents interests only. He has done some good things[[ getting Detroit straightened out), but he's also made some bad decisions as well, and taxing pensions is one of them. And for those who agree with pensions taxation, all I can say is if you weren't lucky enough to have made a decent wage and saved enough for retirement, you'll be going down the same slippery slope as a lot of these current seniors.

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Originally Posted by Cincinnati_Kid

On the other hand, Snyder didn't do himself any favors by taxing senior's pensions either. That's
money they can use for daily survival. My uncle who is 78 years old now pays a extra $150.00 per month in state pension tax. Do the math, $150.00 per month for 12 month's is $1,800.00 per year. Of course the amount paid varies on a case by case basis, but do you think seniors can't use that extra money towards other needs? Snyder is looking out for business and wealthy residents interests only. He has done some good things[[ getting Detroit straightened out), but he's also made some bad decisions as well, and taxing pensions is one of them. And for those who agree with pensions taxation, all I can say is if you weren't lucky enough to have made a decent wage and saved enough for retirement, you'll be going down the same slippery slope as a lot of these current seniors.

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No sympathy here for the "greed generation". Income is income period. If a young person who has kids to feed, clothe, and educate have to pay income taxes than why shouldn't old people? My next door neighbors have 2 social security checks, 2 pension checks adding up to a nice 6 figure income. You want to give them a tax break? Gee then they could take 10 cruises a winter instead of the 8 they already take every winter. Why you would want to give them a tax break and put more on the backs of young people boogles my mind. It is the special interest breaks that people like you support that got us into this mess. Graduated income tax is a simple concept to understand. But right away someone wants a out clause. Crazy.

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Originally Posted by ABetterDetroit

No sympathy here for the "greed generation". Income is income period. If a young person who has kids to feed, clothe, and educate have to pay income taxes than why shouldn't old people? My next door neighbors have 2 social security checks, 2 pension checks adding up to a nice 6 figure income. You want to give them a tax break? Gee then they could take 10 cruises a winter instead of the 8 they already take every winter. Why you would want to give them a tax break and put more on the backs of young people boogles my mind. It is the special interest breaks that people like you support that got us into this mess. Graduated income tax is a simple concept to understand. But right away someone wants a out clause. Crazy.

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That's your opinion which you're entitled to. You know damn well, most seniors don't collect 2 pensions and 2 SS checks. Some are lucky to be collecting just SS. There are exceptions to the rule in anything. Maybe in your neighborhood they are taking cruises every year, not in mine. Come back to the REAL WORLD, not Fantasy Island. Crazy...

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Originally Posted by Cincinnati_Kid

On the other hand, Snyder didn't do himself any favors by taxing senior's pensions either. That's
money they can use for daily survival. My uncle who is 78 years old now pays a extra $150.00 per month in state pension tax. Do the math, $150.00 per month for 12 month's is $1,800.00 per year. Of course the amount paid varies on a case by case basis, but do you think seniors can't use that extra money towards other needs? Snyder is looking out for business and wealthy residents interests only. He has done some good things[[ getting Detroit straightened out), but he's also made some bad decisions as well, and taxing pensions is one of them. And for those who agree with pensions taxation, all I can say is if you weren't lucky enough to have made a decent wage and saved enough for retirement, you'll be going down the same slippery slope as a lot of these current seniors.

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I am pretty sure that 78 year olds had a pretty large exemption; something close to $50,000 was tax exempt.

http://www.michigan.gov/taxes/0,4676...3736--,00.html

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Originally Posted by BankruptcyGuy

I am pretty sure that 78 year olds had a pretty large exemption; something close to $50,000 was tax exempt.

http://www.michigan.gov/taxes/0,4676...3736--,00.html

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Tell that to the retirees who retired from the COD 30 years ago, and will soon take a hit on their $900.00 per month pension.

From a philosophical standpoint, I'm ok with seniors also contributing a bit of their income to help fund our government. After all, even in retirement, they still use a ton of infrastructure that costs money to maintain. Beside that, many of us won't have benefits nearly as generous as they're getting right now [[or will be getting), so if they have to sacrifice, say, an additional $150 per month for the greater good of everyone in the state, so be it.

This applies to the COD pension/health care benefit cuts as well. If those cuts help the city to keep a few more streetlights on along busy thoroughfares where school kids [[who BTW had no say in being born/raised in this hell hole of a city nor any say in its current condition) must stands at bus stops for 30-60 minutes when its still pitch black out in the dead of winter, then it has to be done.

At the same time, it isn't fair that businesses are able to get a free pass from contributing their share to the government.

If we're going to stick with the idea that belt tightening must be done and sacrifices must be made, then I think everyone should share in a bit of the pain equally.

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There are plenty of people in Detroit who are still in their homes who haven't paid any property taxes in years. If this were to happen in the suburbs, they'd be put out of their house in record time. Why is this?

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Originally Posted by Chicago48

There's no answer. Honestly there is no answer.

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There may or may not be an answer to the problem, but there is an answer to the question.

The answer to the question is that in most places, first of all a far smaller number of properties are tax delinquent, so it is easier for the taxing jurisdiction to deal with, second that if another city does go through the tax foreclosure process, it is more likely that they will be able to dispose of the property in a timely and profitable way, and third, Detroit has to worry more than most places about creating a vacant property that is likely to be vandalized shortly thereafter.

So both the motivation and the ability of the city to deal with these tax delinquencies is less than average.

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Originally Posted by 313WX

From a philosophical standpoint, I'm ok with seniors also contributing a bit of their income to help fund our government. After all, even in retirement, they still use a ton of infrastructure that costs money to maintain. Beside that, many of us won't have benefits nearly as generous as they're getting right now [[or will be getting), so if they have to sacrifice, say, an additional $150 per month for the greater good of everyone in the state, so be it.

This applies to the COD pension/health care benefit cuts as well. If those cuts help the city to keep a few more streetlights on along busy thoroughfares where school kids [[who BTW had no say in being born/raised in this hell hole of a city nor any say in its current condition) must stands at bus stops for 30-60 minutes when its still pitch black out in the dead of winter, then it has to be done.

At the same time, it isn't fair that businesses are able to get a free pass from contributing their share to the government.

If we're going to stick with the idea that belt tightening must be done and sacrifices must be made, then I think everyone should share in a bit of the pain equally.

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These Seniors you speak of spent 40 to 50 years working within the system for the fixed income they now receive and now you want to take part of it away. Have you no shame at all? How many years have you paid taxes as these Seniors have for their 40 to 50 years? Yes, I'm a Senior and have a small but reasonable income but to make it, I drive an eleven year old car and live in a one bedroom home that I remodeled with my and my wife's own hands. Now you want to take $$$ from us... Well, KYMA
When you have worked and paid taxes for 40 to 50 years to cover your agendas, come back and we will talk about sucking money from the elderly. BTW, then YOU will be a SENIOR. Good luck to you if we go the way you are suggesting.

As much as I sympathize with the desperately poor, you can't just go around saying you can't pay for anything. As crippling as poverty is in Detroit, people here live like kings compared to the poor in India.

I have a neighbor who works very hard doing odd jobs. He managed to save a little bit and is on a property tax payment plan. He even saved enough for a new roof. That's the kind of attitude people need to have. Not "I'm not going to pay my taxes or water bill and then cry injustice when they come calling"

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Originally Posted by Cincinnati_Kid

That's your opinion which you're entitled to. You know damn well, most seniors don't collect 2 pensions and 2 SS checks. Some are lucky to be collecting just SS. There are exceptions to the rule in anything. Maybe in your neighborhood they are taking cruises every year, not in mine. Come back to the REAL WORLD, not Fantasy Island. Crazy...

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Most seniors ONLY collect social security. You really believe if a senior collects S.S. AND a nice fat pension they should not have to pay income tax on the pension? Still
crazy because their are a ton of them. That's why they changed the law and made pensions INCOME because there was a lot of folks getting a free ride collecting 2 checks every month and not paying any income tax. When the shit hit the fan they needed the money, no more free rides. Income is Income why should age have anything to do with it? People trying to raise children pay their income tax, I think the old folks can handle it.

"These Seniors you speak of spent 40 to 50 years working within the system for the fixed income they now receive and now you want to take part of it away. Have you no shame at all? How many years have you paid taxes as these Seniors have for their 40 to 50 years? Yes, I'm a Senior and have a small but reasonable income but to make it, I drive an eleven year old car and live in a one bedroom home that I remodeled with my and my wife's own hands. Now you want to take $$$ from us... Well, KYMA
When you have worked and paid taxes for 40 to 50 years to cover your agendas, come back and we will talk about sucking money from the elderly. BTW, then YOU will be a SENIOR. Good luck to you if we go the way you are suggesting."



Let's hear the exact numbers, SS/pension that you want to live tax free on. I know nothing of your life style. Those casinos downtown have no shortage of seniors that have disposable income.

And the "I worked for it" "and "I earned it". Like the rest of us don't work and earn our paychecks

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Originally Posted by Cincinnati_Kid

Tell that to the retirees who retired from the COD 30 years ago, and will soon take a hit on their $900.00 per month pension.

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If you're 78 years old and you have a $900/mo pension, there is no additional tax. Check the link I provided.

I wonder where anyone gets the idea that the only income of most seniors is from Social Security. The Census Bureau 2012 American Community Survey reported that 80 percent of men age 65 and over and 63 percent of women in that age group had income from sources other than Social Security. Michigan seniors have a fair amount of income that will be taxed by the amended income tax provisions. Is this one factor encouraging older Michigan residents to move to states with no income tax such as Florida?

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Originally Posted by renf

I wonder where anyone gets the idea that the only income of most seniors is from Social Security. The Census Bureau 2012 American Community Survey reported that 80 percent of men age 65 and over and 63 percent of women in that age group had income from sources other than Social Security. Michigan seniors have a fair amount of income that will be taxed by the amended income tax provisions. Is this one factor encouraging older Michigan residents to move to states with no income tax such as Florida?

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Although I am not convinced the change was a good idea, precisely because you probably want to keep as many pension-receiving seniors around as possible, I doubt it has had a huge effect up to now. Seniors in their late 60's or above aren't taxed on their public pension income [[like SS) at all, and aren't taxed on their private pension income until they reach about 45K for an individual or 90K for a couple. There aren't that many seniors with pensions at that level, and those people only pay on the excess, so unless they have very large pensions the amount of additional tax is pretty small. However, as the phase-in phases in, more pensioners will face the higher taxes, and some people who would have stayed may well move.

On the other hand, huge numbers of retirees moved from Michigan to Florida and other warm-weather states before the pension tax change; if the change is a factor, it is only one among many.

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Originally Posted by ABetterDetroit

Let's hear the exact numbers, SS/pension that you want to live tax free on. I know nothing of your life style. Those casinos downtown have no shortage of seniors that have disposable income.

And the "I worked for it" "and "I earned it". Like the rest of us don't work and earn our paychecks

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You seem to purposely miss read my post. I'll try to make it simple. How many years of my life do you want me to work so you can take money from me and give to the dead beats? The ones that are physically able to work and simply refuse to work for themselves. How many years exactly should I pay for your deadbeats?

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Originally Posted by renf

Is this one factor encouraging older Michigan residents to move to states with no income tax such as Florida?

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It isn't the only factor by any means, but it is a strong factor. If Michigan starts taking too many dollars from my income, it isn't that expensive to move to a income tax free state.

Then Michigan lose tax dollars. If I buy a car, Michigan collects taxes. If I buy gas, Michigan collects taxes. If I buy groceries, Michigan collects taxes. If I buy clothes, Michigan collects taxes. You should get the picture. You seem to have this idea the Seniors are setting around fat catting it. We still pay.

Anyway back to the topic.

68 mills is way to high of a property tax rate for the average citizen of Detroit. Property taxes that high not only contribute to foreclosure but contribute to suppress the property values city wide, again, causing more foreclosures. Fundamentally, high property tax rates only succeed in places where the value of the real estate is high. In economically depressed areas they are nothing but a detrement. The renter in Detroit pays 86 mills, that is just plain robbery or a soon to be abandoned house.

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Originally Posted by FlyOnTheWall

You seem to purposely miss read my post. I'll try to make it simple. How many years of my life do you want me to work so you can take money from me and give to the dead beats? The ones that are physically able to work and simply refuse to work for themselves. How many years exactly should I pay for your deadbeats?

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Simple answer, for as long as you have income you pay your taxes. Death and taxes? Never heard of it?