If you owned a home in Detroit over the past decade, you had more than a one in three chance of being pulled into foreclosure. It might not be because you failed to pay your mortgage, and it could happen even if you owned your home outright. Over-inflated property taxes and inflexible state laws have created a cycle of foreclosures and blight in the heart of a once-great city.
Michigan’s housing politics, where unseen forces from on high can cripple residents’ ability to survive and prosper, mirror the hardened geographic and racial divisions that have tugged at the fabric of democracy in the state. We all know the stories: the Flint lead crisis, “right-to-work” laws undermining collective bargaining, unconscionable water shut-offs in Detroit, armies of unelected emergency managers taking control of majority-black cities and school districts.
Abdul El-Sayed, running to become the first Muslim-American governor in US history, may initially seem an unlikely figure to bridge Michigan’s divides—until you hear his story. His father immigrated from Egypt in the 1970s. His white Christian stepmother hails from rural, thinly populated Gratiot County, right in the center of the state. Members of his family voted for Trump, while others fear the impact of his policies on Muslims like them.
On Monday, El-Sayed, a medical doctor and the former director of Detroit’s health department, released an urban agenda that highlights affordable housing as the key to getting Michigan’s cities back on track. El-Sayed is certainly running to the left of the current Democratic gubernatorial front-runner, former state Senate minority leader Gretchen Whitmer. But it’s his bid to revive Michigan’s historic democracy deficit that should draw real interest.
El-Sayed stresses the commonality of the working class’ shared challenges—whether urban or rural—while endorsing a progressive agenda to end the moral tragedies of suppression and predation. “All of us define ourselves by where we live,” El-Sayed told me in an interview. “It’s our safe space to retreat to. When you think of the rate of foreclosure in Detroit in owned housing, and rate of eviction in rental housing, you’re asking people to grow without roots.”
While the housing crisis in many big American cities focuses on more building to meet demand, in Detroit and throughout Michigan that’s not the problem. “Our challenges involve keeping people in homes in the first place,” said El-Sayed. The solutions lie in reversing a top-down process littered with inequities.
While the state’s tax-foreclosure system is not the only policy producing bad outcomes for Michigan, it’s worth explaining the insanity of how it works. Under Michigan law, counties must foreclose on homes if property tax debts aren’t paid within three years. Counties must impose interest rates as high as 18 percent per year, which adds to the cost. This cycle of debt becomes impossible to climb out from, especially if the homeowner suffers from intergenerational poverty. It has led to an epidemic of tax foreclosures, even over underpayments as little as $8.41.
Detroit property tax rates are among the highest in the country, in part because of collapsing property values after the housing bubble burst. And for many years, Wayne County, home to Detroit, didn’t reassess properties to their current, depressed value, which would have decimated county revenues. As a result, according to one study from Wayne State Law School, from 2009 to 2015, 55 to 85 percent of all properties in Detroit were being assessed at more than half of the market value of the home, which violates the state Constitution. “Some people in Detroit are paying more than the value of their home every year in taxes,” El-Sayed said. “If that happened in the suburbs, people would be up in arms.”
Speculators often squat on properties by paying a minimal amount at auction and waiting to see if property values recover and make the land more profitable for building. If things don’t change, the county takes the property back in a tax foreclosure and the speculators buy it again. This churn creates endless blight, as developers hoard available land. Persistent vacancies devastate communities and hold them back from revitalization. The state’s attempt to prevent this abuse have failed miserably.
A long-awaited 2017 reassessment project lowered taxes for 94 percent of Detroit homeowners. Still, properties valued at $20,000 or less may still be paying more than twice the legal limit for their property taxes. In addition, three programs designed to protect homeowners—a now-defunct state repayment plan, a poverty exemption for tax foreclosures, and an appeals process for homeowners who believe their taxes were over-assessed—involve cumbersome applications and mountains of red tape. Since Michigan counties have enjoyed surpluses from the wave of tax foreclosures, it stands to reason that they would throw up barriers to ending the gravy train. Wayne County, which has foreclosed on over 160,000 properties since 2002, practically relies on evicting homeowners to prop up its budget.
This combination of high poverty and displacement proliferates amid what looks seriously like corruption. It affects everything in Detroit, from schools to infrastructure to social cohesion. It’s a signature symptom of pervasive oppression, where white politicians in Lansing dictate how black lives will be addressed.
El-Sayed’s plan builds in a review of every tax foreclosure for over-assessment. Any finding of over-assessment at any point would lead to automatic enrollment in a revived, discounted state repayment plan. Money from the state’s Hardest Hit Fund could assist county governments with the review. El-Sayed would also streamline the process for a poverty exemption, which would no longer have to be handled in person. The exemption would also be retroactive, so those with chronic struggles with poverty could get relief on their entire debt. And El-Sayed would protect renters living in properties at risk of tax foreclosure; among other things, tenants not notified of the foreclosure would be returned all their rent since the beginning of the default.
Just as important, El-Sayed would screen out speculators with a history of non-payment of taxes and ordinance violations, which would prevent the squatting strategy. Instead, counties would have to give preference to locally owned nonprofits or community land trusts in purchasing foreclosures. Those nonprofits could sell or rent back the property to the original owners. “There’s a difference between a house and a home,” El-Sayed said. “A house is a commodity, a home is a place where people live. You and I want to know who our neighbors are. If they lose that home to foreclosure, we want to think about how to keep that person in the home to keep the fabric of the community together.”
That spirit of restoring local democracy informs other elements of El-Sayed’s housing policy. He wants to reverse a state law that prohibits communities from establishing rent control. That restriction alone makes protecting affordable units extremely challenging. El-Sayed supports the establishment and active publication of a renter’s bill of rights, so tenants know how to protect themselves from unjust rent increases or evictions. He would petition the Department of Housing and Urban Development to localize its definition of “affordable,” so Detroit isn’t affected by having wealthier neighboring cities, and its “affordable” units are too pricey for city residents.
Finally, El-Sayed wants to build on his actions as health commissioner, when he tested all schools and childcare centers in Detroit for lead. Housing stock built before 1978 contains enough lead to elevate blood levels in children. “The baseline prevalence of lead poisoning in Detroit is 10 percent, above the peak levels in Flint,” El-Sayed said. “That’s not because of water but paint in the walls.” Too many landlords who discover lead problems move immediately to evict tenants to limit legal exposure. El-Sayed would prevent that, while using lead-abatement funds for legal defense for renters and full inspection and mitigation of the housing stock. Real penalties would fall on landlords not complying with lead abatement policies.
El-Sayed’s overall urban agenda breaks with the mindset that leads cities to effectively bribe Amazon to attract its headquarters. Destroying the tax base for the sake of a few in Detroit, where 40 percent of residents lack regular access to a car and public transit doesn’t fill in the gaps, amounts to eating your own seed corn. “We’ve become beholden to one vision of economic development, that says we have organically very little to offer, and the only way to get you here is to give you a lot of tax money,” he said. “Our way is, let’s invest in people and infrastructure, so they can produce the kind of businesses that can grow the economy. We have an opportunity in Michigan to rethink what’s possible when you empower people.”
With his youth and mixed background, El-Sayed has drawn too many comparisons to Barack Obama. His agenda of a $15 minimum wage, free college, and single-payer health care tilts more toward Bernie Sanders. But his interest in community empowerment, on breaking bonds that doom minorities to subjugation, steps well outside any politician’s framework. It’s exactly what Michigan needs.