Moratoria and more By Shea Howell

Thinking for Ourselves

Moratoria and more

By Shea Howell

January 31, 2015

Special to Michigan Citizen

sheaWe are on the edge of a catastrophe. A record 62,000 homes in Detroit are threatened with tax foreclosure. Nearly 20% of our people could lose their homes. Words cannot capture the human anguish and community devastation we are facing. In spite of all the posturing by political and corporate leaders about attracting new residents, the reality is that we could lose another 142,000 people over the next year and a half.

Much of this is because of policies instituted to protect downtown development at the expense of the neighborhoods. It the predictable results of mass layoffs in schools and government, cutbacks in health care, increasing water bills, decreasing pensions, unrelenting claw backs, and over inflated home values. It is also because of the intentional diversion of federal money. Dollars meant to help people stay in their homes are being used to “fight blight.”

There is no doubt that this loss of population is troubling to Mayor Duggan. He has worked with Wayne County officials, the state legislature, and the Governor to set a series of laws in motion to assist people facing foreclosure.

Last week, hundreds of people gathered in Cobo Hall to meet with country officials in efforts to save their homes. Officials expect as many as 14,000 people to take advantage of the processes.

But the vast majority of people facing eviction will not be touched by these plans. For many, these plans will only provide temporary relief. Even the reassessment of home values begun this year will only slow down a process careening toward neighborhood collapse.

Last fall, as most of the city was focused on bankruptcy, John Mogk wrote an editorial in the Detroit News calling for the abolition of property taxes. He explained:

“Unlike most other cities in the nation, real property tax revenues on residential, commercial and industrial property make up only about 10 percent of Detroit’s budget. The income tax, casino tax and state revenue sharing are the city’s major revenue sources. Nonetheless, property taxes contributed from all three sources constitute approximately $100 million in supporting city operations. Of this amount, however, the three casinos, General Motors Corp., DTE Energy, Chrysler and Marathon Petroleum alone account for nearly 20 percent of property tax revenue.”

Mogk also offers a number of suggestions to increase revenue in ways that redress the balance between downtown and neighborhoods. Tax exempt, downtown properties “receive the bulk of city services but pay none of the costs,” he says.

He also points out that taxes collected downtown, stay downtown. Since 1975 the Downtown Development Authority and the Tax Increment Financing Authority have enacted policies so taxes on increasing property values downtown are reinvested downtown, siphoning hundreds of millions of dollars from the general fund and neighborhoods.

If Mayor Duggan were serious about stemming this catastrophe he would declare a moratorium on all foreclosures. He would take the necessary steps to abolish a regressive, destructive property tax and adopt polices designed to encourage people to stay in their homes. He would encourage urban homesteading.

But Duggan is not likely to show this kind of leadership. He prefers high profile media efforts rather than substantive change.

No matter what temporary tax relief he offers, the reality is that the Mayor’s main priority is taking over land, bundling it up, and offering it to developers. He has taken money intended to help individual homeowners and transferred it to the blight authority to knock down houses.

This switching of dollars is even beginning to trouble Congress. A recent report concerning this shifting use of federal funds noted, “The number of homeowners estimated to be helped with these federal bailout dollars has dropped 77 percent (in Michigan). About $500 million in federal Hardest Hit funds were estimated in 2010 to be able to help about 50,000 Michigan homeowners. That estimate has since dropped to under 12,000.”

It should be clear that while the mayor likes to stage shows in neighborhoods, he has no agenda for developing sustainable, life affirming communities. That task depends on us.