Housing Matters
An at-risk tax foreclosure property. Image courtesy of Joel Kurth
You may have noticed the yellow bags posted on the front doors of some vacant houses during November. The yellow bags mark the beginning of another property tax foreclosure season— properties that display them are in danger of being foreclosed by the Wayne County Treasurer next spring.
Multiple nonprofit groups such as U-SNAP-BAC and Friends of the Alger have begun the hard work of contacting residents living in homes threatened by foreclosure, providing information on the many ways to help people save their homes. But what ultimately happens when a property owner fails to take advantage of one of the property tax payment options?
In this first Housing Matters column, I’ll report on the results of the 2022 property tax auctions for properties in MorningSide. Knowing how the system works allows neighbors to be more aware of what can happen to the foreclosed houses in our neighborhood.
Back in February 2022 MorningSide received a list of 213 supposedly occupied houses in danger of foreclosure. A volunteer task force worked with Councilmember Latisha Johnson’s staff to place door hangers at 197 addresses, encouraging folks to take action. The good news is that the vast majority of owners were able to prevent their property from being sold by the Wayne County Treasurer.
State law requires each county treasurer to hold a public auction to sell the properties he has foreclosed upon. On September 15, 2022, the Wayne County Treasurer’s Auction included a total of 24 houses within MorningSide. The “minimum bid” for each house equals the amount of property tax, interest and fees owed. Generally, the minimum bids in our neighborhood are in the range of $9000-$20,000. For the first time ever in 2022, each one of the 24 MorningSide houses sold for above minimum bid.
One eye-catching bid for a house on Berkshire topped $61,000 when the minimum bid was only $9800. A more typical example was a house on Bedford that owed $19,500 in taxes and fees and sold for $27,500. In most cases the owner who lost his property to taxes, as well as the auction buyer, is an absentee investor. Two local individuals were the “winning bidders” for most of the 24 MorningSide properties—although each of them may have been bidding on behalf of multiple out-of-town investors.
Along with other “property tax nerds,” I’ll be continuing to research the new owners and exterior condition of tax auctioned houses in our neighborhood. If you’re interested in this topic or have questions about the tax foreclosure process, feel free to contact me at ericdue@umich.edu.
