‘It’s like they make it difficult for you on purpose’: barriers to property tax relief and foreclosure prevention in Detroit, Michigan

Abstract

All U.S. states permit local governments to recover unpaid property taxes through a tax lien foreclosure process. Tax relief policies can reduce household tax burdens and prevent the foreclosure of owner-occupied homes, but little is known about their use and effectiveness. Like other cities, Detroit, Michigan, experienced a rise in tax foreclosures following the 2008 deep recession. Michigan law requires cities to exempt low-income homeowners from some or all of their property tax obligation. Implementation of this policy, the Poverty Tax Exemption, nevertheless failed to protect many low-income homeowners from dispossession through tax foreclosure. State-mandated and locally-determined procedures placed the burden of learning about and applying for the exemption on financially stressed homeowners, restricting widespread access to this critical tax relief. Eliminating institutional barriers to tax relief can prevent many owner-occupied tax foreclosures, especially in cities where a high need for tax relief occurs under local conditions of fiscal austerity.

Urban HEART Detroit: the Application of a Health Equity Assessment Tool

“…One area identified as a potential focus for continued research was addressing homeownership [ 29 ]. Since then, the HEP SC has been involved in two major programs focused on neighborhood predictors of housing discrimination in the city and surrounding areas [ 30 ] and on homeownership inequities associated with accessing and attaining poverty exemption on property taxes [ 3 , 31 ]. Both studies have provided substantial evidence that has informed policy change in this area.…”

“…Health equity gaps in Detroit city are an ongoing concern. Some residents experience limited access to resources such as healthcare and healthy foods [ 1 ], poor air quality [ 2 ], housing instability [ 3 ], and unemployment or underemployment [ 4 ]. Detroit’s historical and contemporary contexts, socioeconomic and physical environment challenges, racial and ethnic diversity, and strong history of collaborative research between community and academic partners make it a compelling setting for the adaptation and implementation of the Urban Health Assessment Response Tool (Urban HEART), developed by the World Health Organization (WHO) [ 5 , 6 ].…”

Housing status, mortgage debt and financial burden as barriers to health among older adults in the U.S

“…Through private entities, programs like reverse mortgage or home equity line of credit, can help pay for housing modifications, these loans have limited flexibility for uncertain life events that could arise resulting in large debts to the borrowers (Kutty, 1998). Finally, programs aimed at alleviating costs like property taxes for older fixed-income homeowners can come with great barriers in submitting applications and required documents (Eisenberg et al, 2019). Furthermore, these findings suggest the need for more opportunities to purchase homes earlier in life to prevent housing instability later on.…”

Threats to and Opportunities for Low-Income Homeownership, Housing Stability, and Health: Protocol for the Detroit 2017 Make-It-Home Evaluation Study

“…While the comparison group includes individuals whose homes were foreclosed in 2017, all individuals had sought help through the UCHC to reacquire their homes during the tax auction. Research shows that populations marginalized in the housing market face barriers (e.g., impoverishment, disability, and illiteracy) and are often not aware of or are unable to access aid and resources, such as those offered by the UCHC [ 50 ]. Therefore, relying on the UCHC’s client list for the comparison group may not capture the experiences of very low-income renters who are more disconnected from housing assistance programs and who may face greater barriers to housing stability and health after experiencing foreclosure.…”