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If there was anything worth starting a KickStarter for, it would be to raise money to buy as many of these homes as possible, and give the deeds outright to the

If there was anything worth starting a KickStarter for, it would be to raise money to buy as many of these homes as possible, and give the deeds outright to the people who already live there. That'd be a really great thing.

jpetersonmn 12y ago
According to that article a lot of these people already have paid off the mortgage and have the deeds to the house. It's that they can't keep up with the taxes. If you raised money to pay their back taxes, what would they do the following year? This kind of stuff really is sad, there has to be some solution to not kicking people that have lived in these houses for 30+ years because they can't afford the taxes.
- jMyles 12y ago
  One of the first times I've seen that property tax really does read like serfdom.
  - Scramblejams 12y ago
    Property tax is really onerous for those who own their houses but fall on hard times. Its implementation can be terribly unfair, because it essentially says that you don't really own all of your property. You own most of it, but if you don't kick that little bit up every year, then you're out on your duff and what you get back is subject to the whims of the auction bidders. That's a troubling implication for me. I'm a big fan of first sale doctrine. If you bought it, it should be yours. I'm deeply uncomfortable with the notion that you must always pay rent to the government on something you ostensibly own, or you get the boot. There are so many ways this could be addressed. Property taxes could be eliminated and other taxes raised for a revenue neutral solution. Or below a certain property value, the tax levied could be zero. Lots of ways to fix this.
    - angersock 12y ago
      I think it's even more screwed up than that, right? One pays property taxes in order to get the benefits of the people they pay taxes to. It looks like the local and state government have utterly failed to provide the policing, schooling, or other tangible benefits associated with taxes. There is literally no incentive to abide by that part of the social contract other than the vague fear that they'll be called in one day or forcibly evicted. The state is acting in bad faith.
    - pkaye 12y ago
      That is what we did in California. We started capping the rate of growth of property taxes. Now old people and companies pay little property taxes since they bought the property long ago. Meanwhile the young people usually end up paying the bulk of the property taxes (along with sky high mortgages.)
    - AnthonyMouse 12y ago
      > Property taxes could be eliminated and other taxes raised for a revenue neutral solution. The perfect solution for this is to eliminate both property tax and the mortgage interest tax deduction and let them cancel each other. For most people it makes no difference, but we stop kicking little old ladies out of the homes they own just because they can no longer afford the property taxes.
      - icebraining 12y ago
        Would they cancel each other? In value, I mean? Seems like the property tax would cover much more than mortgaged houses.
        AnthonyMouse 12y ago
        The numbers depend on several variables, but they seem to be in the same ballpark. The amount people owe on their mortgages is generally in the neighborhood of the assessed value of their homes. People may make some headway into actually paying off the mortgage, but the tax deduction makes that financially unattractive (better to pay off all other debt before the mortgage because the interest rate is lower and the interest is tax deductible) and housing crisis notwithstanding the assessed value is generally lower than what people pay for houses to begin with. So you're really comparing tax rates against approximately the same base. Then you only need to know the mil rate, the marginal income tax rate and the loan interest rate. Plug in typical numbers and they end up within an order of magnitude of each other one way or the other (e.g. somewhere around 2%). Unless your point is that property tax applies to more than single family homes, but there is no reason we have to eliminate property tax for e.g. commercial property.
- icebraining 12y ago
  This kind of stuff really is sad, there has to be some solution to not kicking people that have lived in these houses for 30+ years because they can't afford the taxes. There is, the article points it out: Owners can buy their homes back with debts cleared at auction for $500 as a solution of last resort. The problem doesn't seem to be the lack of a solution, but knowledge that it exists and what they have to do to benefit from it.
  - corysama 12y ago
    So, the solution is: Don't pay your taxes. Wait for your house to go to auction. Hope no one buys it. Pay $500 to effectively erase your three year tax debt. Repeat. That apparently currently works. It's a clear market signal to the government that it has no alternative but to put up with you not paying your taxes. But, I expect if it became widespread, the tax man would see it as a loophole to be closed.
    - AnthonyMouse 12y ago
      There is also clearly something fishy going on there. The only way you get to pay $500 is if no one else offers to pay more than that, i.e. the market value of the house is only ~$500. For a dilapidated house in a bad neighborhood that is entirely possible, but then why are the taxes on such a low value piece of real estate so high that the occupant can't afford them?
      - Scramblejams 12y ago
        Agreed. Other government housing auctions have been recently documented in the press as bearing signs of bidder collusion. A closer look here would be welcome.
  - jpetersonmn 12y ago
    Yes, but it's an auction, no guarantee that the place is going to go for less than the taxes owed, let alone $500.
  - Scramblejams 12y ago
- nthj 12y ago
  > If you raised money to pay their back taxes, what would they do the following year? Detroit property tax rates are something like 3% per year. If I own the house outright, shouldn't I get a mortgage on the house to pay the property taxes, rather than lose the entire house? If I was a banker in the Detroit area I'd be all over this—with a little bit of marketing I could offer to “save your house from the tax man”, take care of all the paperwork, and charge the highest interest rate that still let me sleep at night. (People could shop around, but if you're going to shop around for a better interest rate, you're probably of the type that isn't about to lose your paid-off home over a bill for 10% of the total value.)
icebraining 12y ago
Why? These houses are getting foreclosured due to owed taxes. If they got the deed back, they'd just get foreclosured again to pay the rest, no?
- corysama 12y ago
  I agree that throwing money into tax auctions every three years is a band-aid. However, there is certainly an 8-figure opportunity here for whoever can come up with a more permanent solution. Perhaps instead of paying $500 each to boot out poor grandmas to the streets, some low-income apartments could be built for those grandmas based on the expected values of flipping their houses and a govt tax break promise.
  - tedunangst 12y ago
    The upside for a flipped home in Detroit is about zero. There's a reason these homes are (barely) selling for $500. And buying a home for that and booting granny is a lot cheaper than building granny a new apartment. Not sure where the eight figure upside is going to come from.
klous 12y ago
Well my friend raised over $6,000 on IndieGoGo [1] to buy homes at the foreclosure auctions to give to the families who live in them. There's a potluck tomorrow with all the families and funders to celebrate the success. I could see many more of this type of effort in Detroit being successful. [1] https://www.indiegogo.com/projects/the-tricycle-collective https://www.indiegogo.com/projects/the-tricycle-collective
- teacup50 12y ago
  This is wonderful. I would invest in something that took it a step further; turn it into self-sustaining non-profit or co-op that's focused on keeping people in their homes and able to repay the costs of repurchasing them.
justin_vanw 12y ago
Why would that be in any way good? If someone can't manage to pull together $500 to buy the house they already live in, they also can't pull together $500 to fix anything that breaks in the house. Giving these houses to the people living in them is EXACTLY the same as encouraging people to live in houses that we know are not going to be maintained, and have them evicted in a few years, leaving the city with the cost of condemning and tearing down the house.

jpetersonmn 12y ago

According to that article a lot of these people already have paid off the mortgage and have the deeds to the house. It's that they can't keep up with the taxes. If you raised money to pay their back taxes, what would they do the following year? This kind of stuff really is sad, there has to be some solution to not kicking people that have lived in these houses for 30+ years because they can't afford the taxes.

jMyles 12y ago
One of the first times I've seen that property tax really does read like serfdom.
- Scramblejams 12y ago
  Property tax is really onerous for those who own their houses but fall on hard times. Its implementation can be terribly unfair, because it essentially says that you don't really own all of your property. You own most of it, but if you don't kick that little bit up every year, then you're out on your duff and what you get back is subject to the whims of the auction bidders. That's a troubling implication for me. I'm a big fan of first sale doctrine. If you bought it, it should be yours. I'm deeply uncomfortable with the notion that you must always pay rent to the government on something you ostensibly own, or you get the boot. There are so many ways this could be addressed. Property taxes could be eliminated and other taxes raised for a revenue neutral solution. Or below a certain property value, the tax levied could be zero. Lots of ways to fix this.
  - angersock 12y ago
    I think it's even more screwed up than that, right? One pays property taxes in order to get the benefits of the people they pay taxes to. It looks like the local and state government have utterly failed to provide the policing, schooling, or other tangible benefits associated with taxes. There is literally no incentive to abide by that part of the social contract other than the vague fear that they'll be called in one day or forcibly evicted. The state is acting in bad faith.
  - pkaye 12y ago
    That is what we did in California. We started capping the rate of growth of property taxes. Now old people and companies pay little property taxes since they bought the property long ago. Meanwhile the young people usually end up paying the bulk of the property taxes (along with sky high mortgages.)
  - AnthonyMouse 12y ago
    > Property taxes could be eliminated and other taxes raised for a revenue neutral solution. The perfect solution for this is to eliminate both property tax and the mortgage interest tax deduction and let them cancel each other. For most people it makes no difference, but we stop kicking little old ladies out of the homes they own just because they can no longer afford the property taxes.
    - icebraining 12y ago
      Would they cancel each other? In value, I mean? Seems like the property tax would cover much more than mortgaged houses.
      - AnthonyMouse 12y ago
        The numbers depend on several variables, but they seem to be in the same ballpark. The amount people owe on their mortgages is generally in the neighborhood of the assessed value of their homes. People may make some headway into actually paying off the mortgage, but the tax deduction makes that financially unattractive (better to pay off all other debt before the mortgage because the interest rate is lower and the interest is tax deductible) and housing crisis notwithstanding the assessed value is generally lower than what people pay for houses to begin with. So you're really comparing tax rates against approximately the same base. Then you only need to know the mil rate, the marginal income tax rate and the loan interest rate. Plug in typical numbers and they end up within an order of magnitude of each other one way or the other (e.g. somewhere around 2%). Unless your point is that property tax applies to more than single family homes, but there is no reason we have to eliminate property tax for e.g. commercial property.
icebraining 12y ago
This kind of stuff really is sad, there has to be some solution to not kicking people that have lived in these houses for 30+ years because they can't afford the taxes. There is, the article points it out: Owners can buy their homes back with debts cleared at auction for $500 as a solution of last resort. The problem doesn't seem to be the lack of a solution, but knowledge that it exists and what they have to do to benefit from it.
- corysama 12y ago
  So, the solution is: Don't pay your taxes. Wait for your house to go to auction. Hope no one buys it. Pay $500 to effectively erase your three year tax debt. Repeat. That apparently currently works. It's a clear market signal to the government that it has no alternative but to put up with you not paying your taxes. But, I expect if it became widespread, the tax man would see it as a loophole to be closed.
  - AnthonyMouse 12y ago
    There is also clearly something fishy going on there. The only way you get to pay $500 is if no one else offers to pay more than that, i.e. the market value of the house is only ~$500. For a dilapidated house in a bad neighborhood that is entirely possible, but then why are the taxes on such a low value piece of real estate so high that the occupant can't afford them?
    - Scramblejams 12y ago
      Agreed. Other government housing auctions have been recently documented in the press as bearing signs of bidder collusion. A closer look here would be welcome.
- jpetersonmn 12y ago
  Yes, but it's an auction, no guarantee that the place is going to go for less than the taxes owed, let alone $500.
- Scramblejams 12y ago
nthj 12y ago
> If you raised money to pay their back taxes, what would they do the following year? Detroit property tax rates are something like 3% per year. If I own the house outright, shouldn't I get a mortgage on the house to pay the property taxes, rather than lose the entire house? If I was a banker in the Detroit area I'd be all over this—with a little bit of marketing I could offer to “save your house from the tax man”, take care of all the paperwork, and charge the highest interest rate that still let me sleep at night. (People could shop around, but if you're going to shop around for a better interest rate, you're probably of the type that isn't about to lose your paid-off home over a bill for 10% of the total value.)

icebraining 12y ago

Why? These houses are getting foreclosured due to owed taxes. If they got the deed back, they'd just get foreclosured again to pay the rest, no?

corysama 12y ago
I agree that throwing money into tax auctions every three years is a band-aid. However, there is certainly an 8-figure opportunity here for whoever can come up with a more permanent solution. Perhaps instead of paying $500 each to boot out poor grandmas to the streets, some low-income apartments could be built for those grandmas based on the expected values of flipping their houses and a govt tax break promise.
- tedunangst 12y ago
  The upside for a flipped home in Detroit is about zero. There's a reason these homes are (barely) selling for $500. And buying a home for that and booting granny is a lot cheaper than building granny a new apartment. Not sure where the eight figure upside is going to come from.

klous 12y ago

Well my friend raised over $6,000 on IndieGoGo [1] to buy homes at the foreclosure auctions to give to the families who live in them. There's a potluck tomorrow with all the families and funders to celebrate the success. I could see many more of this type of effort in Detroit being successful. [1] https://www.indiegogo.com/projects/the-tricycle-collective https://www.indiegogo.com/projects/the-tricycle-collective

teacup50 12y ago
This is wonderful. I would invest in something that took it a step further; turn it into self-sustaining non-profit or co-op that's focused on keeping people in their homes and able to repay the costs of repurchasing them.

justin_vanw 12y ago

Why would that be in any way good? If someone can't manage to pull together $500 to buy the house they already live in, they also can't pull together $500 to fix anything that breaks in the house. Giving these houses to the people living in them is EXACTLY the same as encouraging people to live in houses that we know are not going to be maintained, and have them evicted in a few years, leaving the city with the cost of condemning and tearing down the house.