In a city that desperately needs to hold onto residents, there is a virtual pipeline out. At least 70,000 foreclosures have taken place since 2009 because of delinquent property taxes. And more than 43,000 properties — more than one in 10 in this city — were subject to foreclosure this year, some of them headed for a public auction where prices can start as low as $500.
Tax foreclosures have grown so steeply that county officials have lately had to forgo pursuing tens of thousands of additional properties that have fallen far enough behind to risk foreclosure.
Other cities wrestle with unpaid taxes, too, but the size of Detroit’s problem is staggering. Several factors have brought the city to the point that crucial revenues are not being collected and thousands of houses are being taken away each year — not by banks, for failure to make mortgage payments, but by the government, for failure to pay taxes. Contributing are soaring rates of poverty, high taxes despite painfully diminished city services and a long pattern of lackadaisical tax collection by the city.
In Detroit, which lost a quarter of its population in the ten years after 2000 and where those who remained struggled during the recession, more and more people began falling behind. In 2008, 47,000 properties were subject to forfeiture, meaning their owners failed to pay taxes for one year. By 2010, that number hit 86,000. And by 2012, 95,000 properties had gone unpaid. The county’s required legal announcement of homes in forfeiture, mostly from Detroit, is reams thicker than most Sunday newspapers — a fat, gloomy record of a city in foreclosure.
The article notes that most people come up with the money to redeem their foreclosed home or qualify for programs which help them to stay. This year 43,000 homes were saved in this way. However, another 26,000 have not been so fortunate.
The question is raised: “How important is it to take a house back on taxes? At what point should the government be really working hard with the owner to keep them in?