Municipal bankruptcy is in Detroit’s rearview mirror, but a new challenge looms: a wave of foreclosure notices for unpaid property taxes, the Wall Street Journal reported yesterday. After years of delay, Wayne County, which includes Detroit, is informing residents in an estimated 35,000 occupied homes that they are delinquent in their city taxes, which could lead to their houses being auctioned off. That could affect about one in seven Detroit residents, or 97,733 people, according to an analysis of Wayne County’s foreclosure list by Detroit-based Loveland Technologies. Experts say homeowners struggling in a recovering job market and saddled by depressed home values make property-tax delinquencies a persistent problem, especially in aging urban cores. National estimates for the amount of property-tax delinquencies are hard to come by, but the National Tax Lien Association pegs the annual total at $14 billion. Advocates fear that a new foreclosure wave would only accelerate decay and vandalism in a city plagued by abandoned houses and hamper its rebound from the financial crisis and its bankruptcy. For residential properties subject to foreclosure in Detroit, the average amount of taxes and fees owed is $7,067. The average assessed value of homes entering into foreclosure this year is $20,930, which might be significantly higher than what they would fetch on the market, according to Sean Jackson, who tracks blight and tax-foreclosure issues for Rock Ventures, an umbrella organization for companies owned by Quicken Loans founder and Detroit booster Dan Gilbert.
