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Jan 11, 2020

The lost homes of Detroit

Co-produced with PRX Logo

When the Great Recession walloped Detroit, thousands of people fell behind on property taxes and lost their homes.  Since 2008, one-third of properties in the city have been tax foreclosed. And homes in majority-black neighborhoods are 10 times more likely to be at risk of tax foreclosure than those in other neighborhoods. Independent producer Mark Betancourt and The Detroit News analyzed massive amounts of data to find out where all this tax debt came from. They found that hundreds of millions of dollars never should have been billed to Detroiters in the first place.

Next, we look at what happens to homeowners when their neighbors’ homes are foreclosed, turning neighborhoods into ghost towns largely owned by the city. Outlier Media’s Katlyn Alo investigates what happens when the bad neighbor next door is the government. 

Finally, we speak to Detroit Mayor Mike Duggan. Six years ago, he was the long-shot candidate, who won with support from the business community. Host Al Letson talks to him about the housing crisis and whether the city has done enough to help homeowners. 

Credits

This week’s show had editorial guidance from Deborah George, Jen Chien and Stan Alcorn. This show was edited by Phyllis Fletcher and reported by Mark Betancourt and Outlier Media’s Katlyn Alo.

Special thanks to Sarah Alvarez, Imani Mixon, The Detroit News, Attom Data Solutions, Loveland Technologies, Data Driven Detroit and Reveal’s Emmanuel Martinez

Our production manager is Mwende Hinojosa. Our sound design team is Jim Briggs and Fernando Arruda, who had help from Najib Aminy and Amy Mostafa. Our executive producer is Kevin Sullivan. Our host is Al Letson. 

Support for Reveal is provided by the Reva and David Logan Foundation, the John D. and Catherine T. MacArthur Foundation, the Jonathan Logan Family Foundation, the Ford Foundation, the Heising-Simons Foundation, Democracy Fund, and the Ethics and Excellence in Journalism Foundation. Our story on tax foreclosures was produced with support from the Fund for Investigative Journalism.

Transcript

Reveal transcripts are produced by a third-party transcription service and may contain errors. Please be aware that the official record for Reveal's radio stories is the audio.

Al Letson:

From the Center for Investigative Reporting and PRX, this is Reveal. I'm Al Letson. Every summer there's a mad scramble at the Wayne County treasurer's office in downtown Detroit.

Speaker 3:

Just to let you know why everybody is up here right now. The fire marshal only allows a certain amount of people on the floor at a time.

Al Letson:

A couple of hundred people are waiting in this giant ballroom. Like Detroit, the ground is mostly African-American. They've come here because they have unpaid property tax bills that are at least three years old, which means the County can foreclose on their properties and sell them at an auction.

Speaker 3:

We are going to foreclose those properties tomorrow. If you make your payment at the kiosk, you probably will not be foreclosed [inaudible 00:01:28].

Al Letson:

This is the last day to avoid all that. People can pay what they owe in full or they can get on a payment plan that breaks their debt into monthly payments. The Latifa [Pace] owes more than $10,000 in back taxes.

Latifa Pace:

They are asking for$750 today. My payment plan a month would just be like $211, so it saves my home for today by beating the deadline by 4:30 today. I'm pretty much safe.

Al Letson:

Safe by paying $750 up front and $211 a month for five years.

Al Letson:

It's hard to imagine if you're not from Detroit, but here tax foreclosure is on everybody's mind. A third of the properties in the City have been tax foreclosed since 2008. Homes in majority black neighborhoods have been 10 times more likely to be at risk of tax foreclosure than those in other neighborhoods. The impact of that looks a lot like what African-American homeowners have been experiencing throughout the country's history, a systematic and catastrophic draining of wealth, and it all started with an epic level of tax delinquency in the wake of the mortgage crisis. Today, tens of thousands of Detroit homeowners are still feeling crushed by the tax debt they owe the government. Caught in a cycle of debt, paying off old taxes, only at the cost of falling behind on new ones.

Al Letson:

Independent producer, Mark Bettencourt and the Detroit News analyze massive amounts of data to find out where all this tax debt is coming from. What they found was that hundreds of millions of dollars never should have been billed in the first place. Mark introduces us to one woman who's been at the threat of foreclosure for years.

Cynthia Windham:

Hi, sweetie.

Mark B.:

Hello.

Cynthia Windham:

You know-

Al Letson:

Cynthia [Windham] is the sort of person who calls you sweetie even if she's only met you once and you're there to interview her about her delinquent taxes. When I get to her house, her kitchen is full of people.

Al Letson:

You've got a whole party going on here.

Cynthia Windham:

Yeah, I'm doing here.

Al Letson:

She's styling one woman's hair into shiny waves, while another waits her turn.

Al Letson:

You next?

Speaker 7:

Yes, hopefully, hopefully.

Al Letson:

Okay, got you.

Al Letson:

Friends and neighbors and their kids wander in and out at will. Once the crowd clears out, Cynthia and I sit down in her living room to talk. She's lived in Detroit her whole life and moved to the Morningside neighborhood 10 years ago to be close to her daughter and granddaughter.

Cynthia Windham:

We all live within a mile of each other. We can always get to each other right away.

Al Letson:

It's a quintessential Detroit neighborhood with blocks and blocks of single family homes and not much else. Things have really changed since the 80s and 90s when a lot of people owned their homes. Today they're overgrown lots where houses used to be. Vacants are rotting on almost every block, and now it's mostly renters.

Cynthia Windham:

Is not one person on this block that owns their house, but me and this man across the street, when it used to be homeowners' everywhere.

Al Letson:

Cynthia is one of thousands of Detroit homeowners who only became homeowners after the recession. Her income is about $15,000 a year. In most places in America, she couldn't afford to buy. But in Detroit, in 2009 she got her four-bedroom brick house for only $5,000 in cash.

Cynthia Windham:

When I found this house I say, “Oh my God. How could I have that?” It was a blessing. Turned into a nightmare.

Al Letson:

The previous owner lost the house to mortgage foreclosure during the subprime mortgage crisis, when predatory lenders came into Detroit's black neighborhoods pushing loans, they knew people couldn't afford. While it waited for a buyer, the house stood vacant and vulnerable to looters who completely stripped it.

Cynthia Windham:

It was not a radiator in this house and then I couldn't even find them. The boiler was messed up. They took all the registers, copper and stuff off from the walls.

Al Letson:

She had another really big problem. She started getting the property tax bills.

Cynthia Windham:

They would send me twice a year. $1,400 twice a year, so that's like $2,800 a year.

Al Letson:

We checked her tax records and she was actually billed over $3,000 a year and this is on a house she had bought for just $5,000. She initially didn't pay those bills because she thought she was getting a tax credit. By the time she realized she was on the hook for that money, she was years behind and the total was growing. The City of Detroit sells delinquent tax bills to Wayne County and then the County tries to collect them. Just like any other debt collector, they charge interest and it's steep as much as 18%. By 2015 Cynthia's back taxes and interest added up to more than $14,000.

Cynthia Windham:

It kept going up, kept going up, and then they sent me a delinquent and that's when a red flag went up and I went crazy.

Al Letson:

The only way Cynthia could avoid foreclosure was to get on a payment plan with the County. The plan gave her five years to pay off her debt and reduce the interest. Her monthly payment was $300 about a quarter of her monthly income from Social Security.

Al Letson:

You were paid to every month?

Cynthia Windham:

Every month, every month.

Al Letson:

That wasn't easy. While she was paying down her tax debt, she also had to come up with more money to fix constant problems with the house. Shoddy wiring, a broken boiler, a hole in the roof that let rain pour down through a bedroom and into her kitchen.

Cynthia Windham:

I have to budget everything. I have to borrow from Peter to pay Paul and it's hard.

Al Letson:

For Cynthia, home ownership isn't just about having a roof over her head. If she can hold onto the house and get it into shape, it could be a huge asset.

Cynthia Windham:

This will be something, if I could get it fixed up and maybe I could sell it and move into an apartment or something. If I keep it, I could have something to leave for my grandchildren, something where they could always go if they don't have a place to go.

Al Letson:

But for years there's been something else wrong with the house. Something Cynthia didn't even know about. It was the house's value or rather what the City claimed it was worth. By law that assessment can't be more than half of what the house would sell for on the open market. Cynthia didn't know much about her assessments, but we looked into it.

Al Letson:

The City was saying that the house was worth over $60,000 in 2010 and you had bought it the year before for $5,000.

Cynthia Windham:

Wow, wow. What's going on?

Al Letson:

For seven years that value was triple what the City would eventually admit the house was worth. Based on that, we calculated how much Cynthia was overtaxed.

Al Letson:

During that time, you were taxed almost $9,000 according to our very rough calculations beyond what you should have been.

Cynthia Windham:

All of that.

Al Letson:

That's just the base tax. That's not even taking into account all of the interest you were then charged when those taxes became delinquent.

Cynthia Windham:

That's right. You don't know how stressful it is when your house is literally deteriorating before you and there's nothing you could do about it.

Al Letson:

Cynthia's situation isn't unusual. Between 2010 and 2016 we found more than 40,000 homes were charged at least twice as much as they should have been. Over those years, Detroit overcharged its homeowners by more than $600 million. You might be wondering how the City could get home values so wrong. After the housing crash in 2008, the average property in Detroit lost three quarters of its value, but it took nearly a decade for the City to lower its assessments enough to reflect that. Taxable values are set by the City assessor's office, which for years was plagued by terrible record keeping under staffing and a lack of expertise. Then in 2013.

Speaker 8:

It's official. Detroit is now the largest City in US history to declare bankruptcy by far.

Al Letson:

Detroit had run out of money. Emergency response times were through the roof. The street lights didn't work. Catching up to the massive drop in property values after the crash was not a priority. But that same year, 2013, the Detroit News broke a story about the bad assessments. Suddenly state regulators were on the scene. They forced the City to reappraise every single one of its properties. That hadn't been done in decades. The process wasn't finished until 2017. By that time, the City had been overtaxing homeowners like Cynthia for years.

Cynthia Windham:

They should have some kind of government funding to help people with serious problems in their house because they did rip them up. They should be accountable for something.

Al Letson:

I asked the City's chief financial officer, Dave Massaron why Detroit couldn't just pay people back for the taxes they were overcharged.

Al Letson:

Has the City ever considered calculating how much over tax there was and refunding people for that?

Dave Massaron:

The City went bankrupt in 2014. There was a plan of adjustment that was approved by the bankruptcy that determined how we made investments going forward in large part. The bankruptcy was designed to be a reset so that the City could provide services at a particular level and there is nothing in the plan of adjustment that provides for the repayment of any claim that was prior to that bankruptcy.

Al Letson:

Massaron's point is that in order to make it through the bankruptcy, Detroit had to make a plan that involved meeting its obligations from now onward. In order to do that, it couldn't afford to make up for past mistakes. That's what bankruptcy does. You get to wipe out your debts and focus on being better in the future. But the homeowners who were overtaxed didn't get a do-over.

Al Letson:

Is it acceptable to allow people to actually lose their homes over taxes that never should have existed in the first place?

Dave Massaron:

No one should lose their home. We're continuing to work with people to figure out how to get them into the eligible programs.

Jackie Grant:

65,000 properties, which are families' residences are at risk of foreclosure.

Al Letson:

Jackie grant is the president of the neighborhood association in Morningside where Cynthia lives and she also helps run a program called Neighbor To Neighbor. It's made up of volunteers who use an app to go door to door asking people if they need help navigating the property tax system.

Al Letson:

You want to show me the app real quick?

Jackie Grant:

Yeah.

Al Letson:

Jackie pulls up a map on her phone that shows which houses in Morningside are behind on property taxes. At first, it's hard to tell what I'm looking at because the map is so riddled with multicolored dots. They almost blend together.

Jackie Grant:

It drops right in where we are. Each is a parcel or a property.

Al Letson:

And all the colored ones that are filled in, are at risk of foreclosure? It looks like at least a handful on every block.

Jackie Grant:

Oh, yeah. I'm going to say maybe there's 2,000. Something like that. 2,000 properties that are at risk of foreclosure.

Al Letson:

How many properties are there at Morningside?

Jackie Grant:

There are 5,594.

Al Letson:

Do you know a lot of people in Morningside who are on payment plans?

Jackie Grant:

Yeah, I do, but I also know a lot of people that fall off of them too.

Al Letson:

The plans were the government's way of lightening the burden of property taxes and they have kept a lot of people out of foreclosure, but they haven't done much to help them get out of debt. We tracked the properties that were on payment plans back in 2016 and only about a third of them have paid off their debts or are close to paying off within the five years the plan gives them. Jackie's not surprised that so many homeowners are struggling. One in three Detroiters lives in poverty.

Jackie Grant:

If you're making a decision about food, lights, water, but food primarily to survive the taxes, go on the back burner. If the taxes are so high, it just becomes impossible.

Al Letson:

If the City were to cut all delinquent homeowners a check for the amount those homes were overcharged, most of them would be able to pay off their current tax debt with that refund and have something leftover, but that check hasn't come. While Cynthia was paying down her old inflated tax bills and all the interest they had accrued, she was falling behind on her new ones and the payment plan didn't protect her from losing her house over those.

Cynthia Windham:

When I went down there, they told me that the house is in foreclosure, which I didn't know.

Al Letson:

Cynthia shouldn't be losing her home and not just because she was overtaxed. It turns out she wasn't supposed to be paying property taxes at all. She's eligible for a full exemption on her taxes because of her low income. For years the exemption was notoriously hard to apply for and a lot of people still don't even know about it. While the City was overtaxing homeowners, an estimated 30,000 Detroit households qualified for the full exemption, but didn't get it. Cynthia actually got the exemption in 2014, but she didn't know she had to reapply for it every year.

Cynthia Windham:

So, I didn't get it done for two years. That put my taxes back originally to where it was before. It would have been cleaned up.

Al Letson:

So, you weren't paying your City taxes because you thought you were exempt from them?

Cynthia Windham:

Yeah, yeah.

Al Letson:

When she realized the exemption had run out, Cynthia reapplied and got it reinstated, but it's not retroactive for the year she missed. In all Cynthia paid the County more than $17,000 to hold onto her house, only to lose it because of taxes she never should have owed in the first place.

Cynthia Windham:

It's just not fair. It's not fair. I've worked since I was 18 years old every day until I've retired. I don't know. This is something I'm trying to do on my own. I just need a little bit help doing it. It'd be one less abandoned house on the block.

Al Letson:

The occupant of a foreclosed property can stay until they're legally evicted by the new owner, which could be the next step if someone buys Cynthia's house at auction. For now, she's basically squatting in her own home, waiting to find out what's going to happen next.

Cynthia Windham:

I really I'm between a brick and a hard place. I've invested too much in this house in order for it to just be sold right from up under me. That would be devastating. That would be so devastating because if I really had the money to fix the repairs that it could be a nice solid house.

Al Letson:

If Cynthia does lose her home, she'll lose the only financial asset she has and her only real way to grow wealth for herself or for her grandchildren and she'll get nothing in return. Even if the County sells it at a profit in the auction, most foreclosed homes get bought up by investors, many of whom then rent them back to the people already living in them, the former owners. In this way, tax foreclosure has helped shift Detroit from a majority owner to a majority renter city. That swing was even more dramatic for African-American residents. If a landlord bought her house, Cynthia couldn't afford to rent it.

Al Letson:

If you did lose it this year, where would you go? What would you do for?

Cynthia Windham:

I'll live with my daughter and just give it up. She has a big house, five-bedroom. She already had my room ready, but I feel like I'm old enough for that yet. I really don't. I want to be kind of independent.

Al Letson:

Cynthia does have one last chance to hold on to her house. Detroit was sued by the ACLU and others for making the exemptions so hard to get. In the settlement the City promised to let some foreclosed homeowners buy their houses back for $1,000. The program is called Make it Home, but by this point Cynthia has her doubts.

Cynthia Windham:

I'm just hoping that this program is a good program. I really hope it's not something else that'd trick me.

Al Letson:

The solutions to tax debt that the government offers, the payment plans, the exemptions, they haven't been enough. That's partly because for people like Cynthia, falling behind on taxes is never just about a lost job or a leaky roof or an inflated tax bill. It's a lot of things all at once. It's hard to imagine the government doing so much damage, at least on this scale in a majority white City with a lower poverty rate. But then amidst all that, there are solutions that are working.

Cynthia Windham:

Hello.

Michele O.:

Hey, Cynthia. It's Michele Oberholtzer calling.

Al Letson:

Michele is a housing counselor calling from the Make it Home program.

Michele O.:

We have good news, which is that your home was one of 527 homes that was accepted into the Make it Home program this year. Okay?

Cynthia Windham:

Okay.

Michele O.:

That means your home is safe. All the back taxes are cleared. It will not be auctioned off.

Cynthia Windham:

Thank God.

Michele O.:

And it is on its way back to you. Okay?

Cynthia Windham:

Thank God. So, I can continue my home improvement?

Michele O.:

Yes, ma'am.

Cynthia Windham:

Thank you so much, Michele. You just don't know. Oh my God. Is God nice.

Michele O.:

Yes.

Cynthia Windham:

Is God great.

Michele O.:

Yes.

Cynthia Windham:

Michele, I could kiss you.

Al Letson:

It's a rare moment of elation in an otherwise very bleak housing crisis. The Make it Home program is expanding and the City and County recently proposed a new payment plan program that could dramatically reduce tax debt for the poorest homeowners if it passes the legislature. But that won't change the fact that tens of thousands of Detroit have already lost so much and won't be getting it back.

Speaker 12:

Thanks to freelance reporter Mark Bettencourt and the Detroit News for bringing us that story. What happens when your neighbor loses their house and their neighbor loses theirs and on and on and on until your block is almost empty? In Detroit, what happens is you get the worst neighbor in town.

Jackie Smith:

If you live next door to an abandoned home it's very hard to get it torn down because I've been asking and inquiring about it for over 10 years. Yeah, I'm frustrated with it. That way started taking to lose myself brick by brick.

Al Letson:

That story in just a minute on Reveal.

Speaker 1:

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Al Letson:

For the Center for Investigative Reporting and PRX, this is Reveal. I'm Al Letson. Before the break we heard how Cynthia Windham got a last minute reprieve to save for Detroit home from foreclosure after fighting off tax collectors for years. But what happens to the tens of thousands of Detroit homes that Wayne County, Michigan foreclosed on and ended up owning? Homes like a ramshackle white bungalow on the city's West side. The County took it over in 2011. Jackie Smith lives next door with her grown daughter, Kelly. Jackie says the house was vacant long before it was foreclosed and the property has been nothing but trouble.

Jackie Smith:

When I come out of my house, I don't want to look at that garbage right there. I don't want to look at it. It's not what I want to see.

Al Letson:

Jackie says the house has been falling down for a decade. It's caught fire. Squatters have moved in and out and bits of the house lead paint, chips and roof shingles sometimes end up on Jackie's property. She's fed up and frustrated that the City hasn't done much about it.

Jackie Smith:

If you next door to an abandoned home, it's very hard to get it torn down and like I said, I've been asking and inquiring about it for over 10 years. For over two years I've called downtown because I wasn't quite sure who I was even supposed to contact. I caught myself contacting everybody. Yeah, I'm frustrated with it. That way started taking to loose myself brick by brick.

Al Letson:

After the County took over the house, it went to auction, but nobody bought it. Eventually it got transferred to the Detroit Land Bank, which is supposed to maintain the property until it can be sold or demolished. This happens a lot. Right now the Detroit Land Bank owns a quarter of the City making it the largest property owner in Detroit and it seems overwhelmed leaving blighted and dangerous homes unspoken for often for years at a time. Kelly says she remembers a time when her block was a lot more vibrant.

Kelly:

Looking at the neighborhood now from when I was a small girl. It's a big difference. All of these homes were lived in. All these lots had homes on them that were lived in and now when you ride up the streets, the surrounding streets and the neighborhood it's sad.

Jackie Smith:

Yes, it is what it has become. The neighborhood it just amazed me how it has changed a lot.

Al Letson:

The thing is if this were any other bad neighbor, folks like Jackie could go next door and hopefully talk it out or even report them to the City, but what happens when the bad is the City? Katlyn Alo is a data reporter for Outlier Media and has been investigating that question and brings us this story.

Katlyn Alo:

At the end of November, Detroit City Council hosted a meeting that was so well attended by the public. Their auditorium reached capacity.

Madam Chair:

My understanding is that there are people that are outside and they're not letting them pass the elevator [inaudible 00:24:14].

Speaker 17:

Madam Chair, I know that at least several people have sent a message saying they're not allowing people to get on the elevators from the first floor actually because they're being told it's at capacity. I would say-

Katlyn Alo:

This wasn't a regular City Council meeting. It was organized to allow the public to weigh in on a controversial proposal from Mayor Mike Duggan. The City would sell $250 million in bonds to primarily fund the demolition of Land Bank properties. To paint you a picture in land area, Detroit is big. Big enough to contain San Francisco, Boston, and Manhattan and have some land leftover. The residential property is sprawling consisting of mostly single family homes, but even with its size, today three quarters of all Detroit residential property is on the same block as at least one Land Bank property. What to do with all those vacant homes is a subject of heated debate in Detroit.

Madam Chair:

I know this is extremely passionate subject for many. Trust me, it's extremely passionate for me. It is so passionate I have a pastor here to pray today.

Audience:

[crosstalk 00:25:24].

Madam Chair:

[inaudible 00:25:26].

Katlyn Alo:

For the rest of the nation. The great recession and the mortgage foreclosure crisis are largely in the rear view. But for Detroit, the D population, the bankruptcy and the tax foreclosure crisis that followed have left the City with two things, a tremendous vacant housing portfolio and an aversion to creating more municipal debt. For those who haven't seen widespread vacancy, it might be hard to picture, but the public comment at this meeting reflected a couple of things about vacancy in Detroit. First, some residents, ones that live near more City owned property have to deal with the burden of nearby vacancy more than others. Second, they just don't trust the City to be good stewards of their tax dollars.

Speaker 18:

I want to make it clear that this is not a blind issue, in my opinion. This is a neglect issue.

Katlyn Alo:

When a neighborhood is occupied, when the City doesn't own most of it, you can tell just by listening. Cars drive by often, there's a lawn mower, a dog, the tune from an ice-cream truck scooting down the street. Most of the housing stock in Detroit is single family homes that were built before 1960. On occupied blocks, a lot of houses are visibly aging but also have signs of care and life, potted plants retouched paint on the porch banisters, kids' bikes tossed on the lawn, but when a block is completely owned by the City it sounds and is pretty empty. There are nearly 50 blocks in Detroit where the Land Bank owns every single property.

Katlyn Alo:

Usually there are several vacant lots, some with shrubbery that traces the outline of where a house used to be. Then there are the vacant houses, which are so abundant and so often beyond repair that the City's focus has been primarily on demolishing them even with a shortage of affordable housing for Detroit's majority low income population. On Detroit's Westside, Craig Browning is the only resident on his block. He and a bunch of animals, that is.

Craig Browning:

There's no rats around here because my cats are very good hunters, but there's groundhogs. There's tons of groundhogs, tons. They're in that porch right there. They'll come out. I've seen him in the window looking out at me. I've seen them on the fence line eating on the branches and my cat has come back with holes in his head.

Katlyn Alo:

Craig narrowly avoided last year's tax auction by entering a program with the city. He was also granted the poverty tax exemption, the same one Cynthia Windham got in our last story, which he likely should have been receiving all along.

Craig Browning:

I just need help. I didn't know that there was any kind of help that I could get. I was on my bed a few times with my pistol in my hand crying, just crying because I'm losing my house. I don't know what the hell to do.

Katlyn Alo:

For Craig and for many other low income Detroiters like him, the foreclosure cycle creates an annual uncertainty, one where they enter forfeiture and hope to find some way to avoid the auction. If Craig loses his home, his block will lose its primary caretaker.

Craig Browning:

I cut all the grass. Every morning I come up and pick up all the papers from people just throwing the garbage out on the streets. I'm the one that does all this. I like things to look nice.

Katlyn Alo:

Craig does everything for the entire block. He clears the snow from the intersection every winter. He runs off squatters in the vacant houses and he keeps the lawns raked of twigs and debris even before the autumn leaves start to fall. When I spoke to two members of the Land Bank inventory team last year, they explained a strategy that focuses on selling property in more stable neighborhoods. They have limited time, resources and funding, so they prioritize houses that are less likely to end up back in the Land Bank portfolio. But the flip side of that sales strategy is that less occupied blocks like Craig's where the City owns a lot of property, those get neglected. I interviewed Land Bank, executive director, Saskia Thompson over the phone. She says this is also how they decide which properties to demolish first.

Saskia Thompson:

People are very justifiably frustrated out there because they've been sitting next to a vacant and abandoned house and they want it torn down. It seems like a less than satisfactory answer for anybody in the neighborhoods to say, “Sorry we don't have funding to knock it down.” But that's the reality of where we've been these past several years.

Katlyn Alo:

In short because the Land Bank is so overwhelmed by its inventory, the places where people need the most help are exactly the last neighborhoods that will get the Land Banks attention, which means that folks like Jackie and Kelly, the mother and daughter we heard from earlier will consistently face delays.

Kelly:

I know my mom is happy here, but just like she came back for her mother to be around her mother because she was getting older, well I just came back. It hasn't been a year yet and I'm ready to go already, but she doesn't want to go. I can't leave her here. It's just too much going on around. Yes, this house is now a home and I would love to pick it up and drop it off somewhere else more safe. I guess I just have to be here and babysit. But this is, no, is not going to last long.

Katlyn Alo:

Across town over on Detroit's Eastside, Sherry Welch lives in one of two remaining homes on her block, but there are a lot of things she doesn't mind about it. She's not originally from Detroit. She's from a more rural area in the middle of the state.

Sherry Welch:

I am still a country girl. I mow the grass in my bare feet. I'm country, so I do like the fact that I'm by myself. I do want it to be safe. I wish I could afford somewhere different, but Detroit's cheapest place to live.

Katlyn Alo:

But that doesn't mean Sherry wants the City to ignore her.

Sherry Welch:

The garbage, I got a call all the time with me being the only one on the block. They like to forget about me. I don't get any of the papers like everybody else. I call all the time and it's like, “I'm still here. Still paying the taxes.”

Katlyn Alo:

But of all the frustrations Sherry has about being on a nearly empty block, there is one that has caused her immense pain the past three years. She didn't have access to running water. Sherry's waterline started leaking badly shortly after she bought the home in 2015. The City came and shut off the water service until the line could be repaired. A service she couldn't afford. Small everyday tasks like brushing her teeth and cleaning her dishes became tremendous hurdles. For the past few years Sherry's life centered around access to clean water. She had to keep her house stocked with bottled water to drink. For showering, she collected rain water in a huge drum that feeds through a tube into her bathroom. A process that doesn't hold up in a Detroit winter.

Sherry Welch:

I get really in a deep dark depression especially in winter because my water will freeze. It's harder to get.

Katlyn Alo:

The City actually does replace some broken water lines, but they only do it and pay for it when the nearest water main is being replaced to remove lead. The problem was that the City would likely never prioritize Sherry's water main because her block is nearly 95% unoccupied.

Sherry Welch:

I just keep myself going by knowing that my grandfather did this. My grandfather lived out in the country, obviously they had an house. He never took a bath. He washed. I stand in my shower and I pour water over me, like I take a shower.

Katlyn Alo:

Last November, Sherry's water was reconnected, but it wasn't because the City offered an out. It was because a local publication featured Sherry in an article and readers donated their money and services. But while some Detroiters like Sherry struggle to get help from the City, other parties are offered a much greater degree of flexibility and accommodation by City officials, private developers. Last spring the City began acquiring over 200 acres from private owners for the new Fiat Chrysler plant. Some took a simple cash pay out for their property, but others had more complicated deals.

Katlyn Alo:

Michael Kelly, a well known and controversial speculator was given 15 parcels, had over $1 million in late tax debt forgiven, and his open blight citations canceled all for five vacant lots. All told the Land Bank gave 157 properties to the Fiat Chrysler deal. Arthur Jemison, the head of the Housing and Revitalization department overseen by the mayor said it was never the City's intention to gather property in the Land Bank to use for redevelopment, but the City is being strategic with the hand that they've been dealt.

Arthur Jemison:

We would love to have a lot of this land in private hands being managed privately so we can just enforce, no do code enforcement, but because we own so much with the particular situation that we're in and we're trying to be thoughtful and opportunistic.

Katlyn Alo:

Mary Sheffield of the Detroit City Council says residents don't understand how this land is being managed and neither does she.

Mary Sheffield:

I hear a lot of complaints, a lot of outcry about the lack of transparency, the lack of accountability with the Detroit Land Bank authority. People are demanding greater transparency. They can't buy side lots. They're not able to purchase properties or homes. They're unclear about how properties are being held. The list goes on and on.

Katlyn Alo:

Sheffield says the Land Bank authority is almost exclusively overseen by the mayor. It reports to a board that is almost entirely mayor appointed. That isn't much structural accountability for a government agency that has so much impact for Detroiters. The formal agreement between the City and the Land Bank will be ending this year, which means City Council is redrafting the terms. Sheffield says she wants to implement clearer language around sales and transparency.

Mary Sheffield:

So, really if how do we make the Detroit Land Bank more accountable or how do we dismantle that current structure because currently it's not working for the average citizen. Now, when you talk about developers, individuals who are coming in and buy bundles of property they in my opinion, are able to navigate the system a little bit better.

Katlyn Alo:

Navigating the system has a different urgency for people who live next to a vacant property as opposed to investors who profit off it from afar. Widespread vacancy whether the property is owned by the City or not is also a shared burden for all Detroiters. The properties themselves can be hazardous. Like this incident from October.

Speaker 24:

We begin with an update from Detroit's Eastside. The Detroit Land Bank is taking action after a tree snapped and crashed into a home trapping a woman inside.

Speaker 25:

It's a story we-

Katlyn Alo:

A lot of these houses are dangerous just because they're old. They're falling down, shutting lead paint and exposing people to asbestos. Vacancy is also linked to crime, creating a space to harbor drug deals and hide dead bodies. Mayor Duggan promised to get rid of blight when he ran for office in 2013. Last year he tried to make good on that when he announced that $250 million bond proposal to demolish vacant homes.

Mayor Duggan:

And this is so typical, the City, you've got houses over here that clearly need to come down. You've got houses across the street that are beautiful. The folks have been maintaining them and we need now to say to the folks who stayed, “We want you to be happy you stayed [crosstalk 00:37:39].

Audience:

Yay.

Mayor Duggan:

Right?

Speaker 27:

That's right.

Katlyn Alo:

The public comment on the mayor's proposal we heard earlier lasted four hours. The next day, City Council voted it down. Some council members raised questions about the current demolition program, which has been under investigation for bid rigging, misappropriating funds and not adhering to safety regulations. Ultimately, the six to three vote underscored City Council's growing skepticism that the mayor's office had done its due diligence for the people of Detroit.

Mayor Duggan:

If you're in a neighborhood and you think that you've been forgotten, you have not.

Katlyn Alo:

But a lot of Detroiters do feel forgotten, particularly those who have to deal with the City as a neighbor. Craig who cuts grass for his block and keeps the street clean, wants resources so he can stay in his home. Sherry who had to live without water, wants her basic utilities to function. Jackie and Kelly want the vacant house next door torn down. All of them live near a kind of widespread and long lasting vacancy that many Americans have never seen. They've all contacted multiple agencies, the utility companies, the City, the County, nonprofits to try to deal with the Land Bank owned property, but for all their efforts, they still feel largely unheard.

Kelly:

Just not going to care. Where's the integrity? If you say you're going to do it, do it. I mean that's what you expect out of the residents in the City. Just do it, care. When you care others care. But if you don't care and I don't care. I don't want to be the only one caring.

Jackie Smith:

Right, because I do pay my property taxes and all of that. It's like, “Am I going to get something for my money other than to keep picking this house up and putting it in a trashcan?” It's like somebody needed to do something. They need a better way.

Al Letson:

That story was from reporter, Katlyn Alo from Detroit's Outlier Media. We heard Detroit's mayor, Mike Duggan insist that the better way was coming, that the City hadn't forgot about the problems of people living on blocks of vacant homes. After the break, I sit down with the mayor and ask him what he's doing about it. That's next on Reveal.

Al Letson:

From the Center for Investigative Reporting and PRX, this is Reveal. I'm Al Letson. For the last six years, all of the problems with Detroit, the foreclosures, the vacancies, the decades of white flight, they've been on the shoulders of one very unlikely man, Michael Edward Duggan, the twice elected mayor of Detroit. When he first decided to put his hat in the ring in 2013, he was the longest of long shots. He was running to be the first white leader in four decades of a City that's close to 80% black. His relevant experience was as a former prosecutor and as a CEO of the Detroit Medical Center, a group of hospitals he brought back from the edge of bankruptcy.

Al Letson:

Though he grew up in Detroit, Mike Duggan had been living in the suburbs. In fact, he moved back to the City so soon before the election he was kicked off the ballot and had to get votes as a writing candidate and yet he won. The promise that he got elected on was that he would fundamentally turn around the City of Detroit, just like he turned around the hospitals he ran. Mayor Duggan spoke with me in December from his office in Detroit City Hall.

Al Letson:

Mayor Duggan, thank you so much for sitting down to talk to us.

Mayor Duggan:

Good to be home with you.

Al Letson:

I want to start by going back to when you were first elected mayor. It was 2013, Detroit was in the middle of declaring bankruptcy. You campaigned as a government turnaround expert. What did you think most needed to be turned around in Detroit?

Mayor Duggan:

Well, I knew what needed to be most turned around. You'd had basically 200,000 people move out of the City and the previous decade and half the street lights were out, the buses weren't running. The ambulances wouldn't show up for an hour at a time. There were 40,000 vacant houses. The schools were performing badly. A water main break would freeze in the winter and the cars would freeze in the streets. Pretty much everything that it could be bad for your quality of life is what was existing in Detroit.

Al Letson:

And where on the list of problems was it to solve the tax foreclosures, people losing their homes because they hadn't paid property taxes?

Mayor Duggan:

So that really peaked in 2015 when we had 9,000 occupied houses for closed down. We had no ability to deal with any of the problems in the City. If you've got 9,000 families a year being pushed out of their home. We had to stop it.

Al Letson:

What did you do about it?

Mayor Duggan:

Well, my second month we cut all the property tax assessments, 20%. Then I went and got House Bill 5882 passed, which allowed the County treasurer to spread somebody's arrearage over five years and enter into a repayment plan. Then we entered into a whole series of programs to assist people in different ways that ultimately got us down to 500 families last year. We've got another package of bills and Lansing that I expect will pass in the next few months. They will cut it even again.

Al Letson:

Early in the episode we met this woman who was tax foreclosed. Her name was Cynthia Windham and it turned out that she had been overtaxed almost $9,000. If she had gotten a refund for all the money she was overtaxed, she would have owned that house free and clear. Should the government be finding a way to pay that money back?

Mayor Duggan:

What we're trying to do is find a way to address the issues fairly. As a County tax foreclosure process and in it is built in appeals every year. If you're assessed too much, there's a whole series of measures that you can take and a lot of people took advantage of those measures. I don't know how you go back on past years where people didn't avail themselves of the rights. What we're trying to do is fix it going forward.

Al Letson:

But even with that solution, it sounds like you're putting the onus on the homeowners to correct a mistake that the City and the County made.

Mayor Duggan:

I don't know why you would describe it that way.

Al Letson:

Well, I'm saying that like it's on the County and the City to assess the houses and to decide what the tax number is. But our analysis of the situation is that people were overtaxed by $600 million in total. In order to fix that, you're saying that they have to go through this kind of labyrinth of bureaucracy instead of the City and the County coming to the taxpayer and saying, “Hey, we made a mistake. We're going to make this easy for you.”

Mayor Duggan:

I'm trying to, I guess maybe answer as best I can.

Al Letson:

Sure.

Mayor Duggan:

In the last four or five years to my knowledge, assessments have been accurate. If people were assessed too much before I got here in the City and the City went into bankruptcy before I became mayor, that was a pre-bankruptcy issue. Folks had a process by which they could appeal it. Those years are closed. I don't know any lawful way to go back and say, “To all the taxpayers of the City who did follow the process, we're going to raise your taxes to pay the taxes for people who didn't.” When you look at this problem with saying what is a legal way we could solve it? With the bill that just came out of the house 106 to one that's on its way over to the Senate, what we're going to do is dramatically cut the payments on people in payments plans, probably from $125 a month to $25 a month. I'm trying to find a legal way to solve this and we think this is the practical solution to deal with it.

Al Letson:

When someone loses their home, it affects their neighbors too. Earlier in the show we met some people who are among the last homeowners on their block and they're having trouble getting garbage pickup and running water and they've had trouble getting the City to deal with problems from vacant houses that the Detroit Land Bank authority owns. What's the responsibility of the City to the people who are living next to these vacant houses? Are their problems lower priority because of where they live?

Mayor Duggan:

Well, they aren't for me. In the last five years we've demolished 20,000 houses that can't be saved. We've taken 9,000 vacant houses that could be saved and moved families in and renovated them. I just proposed to Detroit City Council a bond issue of $250 million, so we get to every single abandoned house in every single neighborhood because I think we have that obligation. So far I have not convinced City Council to move forward on that, but I'm optimistic that we'll work something out in the next few months because I do think we have a responsibility to those individuals.

Al Letson:

We heard a lot of people when we were in Detroit saying that they wanted more transparency about how the Detroit Land Bank works, maybe more oversight from City Council. Is that the kind of reform that you would support?

Mayor Duggan:

Yeah. I completely agree with that. I've proposed that to Council and I think that is the right direction and I think it's going to be a very positive development.

Al Letson:

I'm not from Detroit, but I really love Detroit. I've got a lot of good friends there. I think one of the stories that I hear a lot about Detroit is that is a City that is struggling with industry moving away and white flight leaving the City. But what I know about Detroit is that there's a lot of committed people who are doing good work on the ground there. What do you see in Detroit?

Mayor Duggan:

Yeah. Well, your tone is pretty bleak. In most neighborhoods in the City, their property values, their home prices have doubled in the last five years. We got 30,000 more Detroiters working today than were working five years ago. There are a lot of very positive things happening. The City of Detroit's lost population. We've lost businesses, we've lost restaurants, we've lost movie theaters for 60 years. You can see the trend from every indication heading the right direction. Are we going to recover from 60 years of decline in four years? No, but I think most people in this City would say it's heading in a positive way. We got a long way to go.

Al Letson:

Last question for you, mayor. You said the single standard of mayor should be defined on is whether the population of the City is going up or down. How are you doing?

Mayor Duggan:

We're going to find out in May when the Census Bureau numbers come out. Last year we had the smallest decline in population in 60 years, about 1,600 people. Hopefully this May, that 60-year cycle will have finally been broken and I'm going to wait for the report card.

Al Letson:

All right. Well, come May I will check back in with you.

Mayor Duggan:

All right.

Al Letson:

Thank you so much for your time. I really appreciate it.

Mayor Duggan:

Good to talk to you.

Al Letson:

That was Detroit mayor, Mike Duggan. That long cycle he mentioned of Detroit losing population, it's actually been more than 60 years. When the City picked, it was 1950. Detroit was the heart of auto industry and a city of nearly 2 million right up there with LA and Philadelphia. But it's been losing people ever since, seven straight decades of decline, including the decade that just ended. I don't think we know what it looks like for a city to come back from that much less to do it in a way that's fair and that's just, but I hope the 2020s is the decade we find out.

Al Letson:

Today's show was edited by Phyllis Fletcher with huge help from Deborah George, Jen Sheahan and Stan Alcorn. Thanks to reporter, Sarah Alvarez and researcher, Amani Mixon for help on our story on the Detroit Land Bank. Our story on tax foreclosures was produced with support from the fund for investigative journalism. We also got help on that story from Adam Data Solutions, Loveland Technologies, Data Driven Detroit and Reveal's Emanuel Martinez. Victoria Baranetsky is our general counsel. Our production manager's Mwende Hinojosa. Our sound design team is the dynamic duo, Jay Breezy, Mr. Jim Briggs and Fernando, my man yo, Arruda. They had help this week from [Gee Bimini 00:50:51] and Amy Mostafa.

Al Letson:

Our CEO is Christa Scharfenberg. Matt Thompson is our editor in chief and our executive producer is Kevin Sullivan. Our theme music is by Commorado, Lightning. Support for Reveal is provided by the Reva and David Logan foundation, the John D. and Catherine T. MacArthur foundation, the Jonathan Logan Family Foundation, the Ford Foundation, the Heising Simons Foundation Democracy Fund, and the Ethics and Excellence in Journalism Foundation. Reveal is a coproduction of the Center for Investigative reporting and PRX. I'm Al Letson, and remember, there is always more to the story.

Speaker 28:

From PRX.