The Chargeback

The Chargeback Substack provides in-depth analysis and research on the property tax foreclosure crisis in Detroit, focusing on its implications and the functioning of Michigan's tax foreclosure system. It discusses potential reforms like the Land Value Tax, impacts on different homeowner demographics, and the broader effects on Detroit's housing market.

Property Tax Foreclosure Crisis Detroit Housing Market Land Value Tax Property Ownership and Speculation Tax Delinquency and its Reduction Legal and Policy Reforms Economic and Social Implications

The hottest Substack posts of The Chargeback

And their main takeaways

Detroit’s Land Value Tax & Tax Foreclosure Risk

117 implied HN points • 24 Jan 24
💰 Finance Taxation Property Revenue
  1. Raising taxes on vacant land in Detroit may not lead to a new tax foreclosure crisis.
  2. Vacant residential lots are the most susceptible to tax foreclosure under the Land Value Tax proposal.
  3. Even if all vacant lots' owners stopped paying taxes, the revenue implications would be small compared to the total property tax levy of the city.

Detroiters Are Paying Speculators' Property Taxes

78 implied HN points • 16 Oct 23
🇺🇸 U.S. Politics Taxation Property Rights
  1. The City of Detroit is proposing a land value tax to address the issue of Detroiters paying speculators' property taxes.
  2. Current property tax systems benefit owners of unused or dilapidated properties over those with occupied homes in good condition.
  3. Implementing a land value tax could shift the burden of property taxation away from Detroiters to speculators.

"Does Detroit even need to tax homeowners?"

78 implied HN points • 08 Oct 23
🇺🇸 U.S. Politics Policy Taxation Local government Revenue
  1. Eliminating all property taxes would lead to significant revenue loss for the city and make land speculation easier.
  2. Eliminating only homeowner property taxes could hurt renters and lead to increased taxes for non-homestead properties.
  3. Eliminating the portion of property taxes controlled by the City of Detroit could benefit homeowners but also speculators, and may not be revenue neutral.

Detroit Property Tax Delinquency Ticks Up

78 implied HN points • 21 Aug 23
💰 Finance
  1. There was a 10% increase in tax delinquent Detroit homeowners as of August 2023 compared to August 2022.
  2. This increase in delinquency was driven by fewer homeowners paying off their debt and more homeowners falling into delinquency.
  3. Notable concentrations of newly tax delinquent homeowners in areas like northeast Detroit, west side, and southwest Detroit were observed in August 2023.
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"Suburbanization" and Detroit's Davison & Banglatown Neighborhoods

39 implied HN points • 15 Sep 23
💼 Business Real Estate Community Development
  1. Ownership of Detroit property appears to be growing in certain Michigan cities like Warren, Hamtramck, and Sterling Heights.
  2. There is a trend of immigrant communities from Detroit neighborhoods like Davison and Banglatown moving to suburban cities for various reasons.
  3. High concentrations of rental properties owned by Detroit residents are observed in Davison and Banglatown, with potential ownership movements to suburban cities.

Remembering Ray's War Chest

39 implied HN points • 30 Aug 23
🇺🇸 U.S. Politics Legal Property
  1. Legal battles in Michigan are fighting to make retroactive claims on tax auction profits, potentially leading to large claims against counties.
  2. Challenges to the tax foreclosure system often overlook the high-interest rates on delinquent taxes as the true source of financial imbalance.
  3. Former Wayne County Treasurer Ray Wojtowicz amassed a large war chest from tax profits, helping the county avoid bankruptcy.

A Pro-Speculator Property Tax Policy from Some in Detroit City Council

19 implied HN points • 10 Oct 23
🇺🇸 U.S. Politics Policy Taxation Government Local Housing
  1. Some members of the Detroit City Council are proposing a property tax policy that could benefit outside property speculators.
  2. Eliminating all property taxes could give non-residents an advantage over Detroit residents in property ownership.
  3. Supporting property tax relief for low-income homeowners could be a better solution than empowering speculators.

What is The Chargeback?

78 implied HN points • 06 Apr 22
  1. The chargeback is an important term in Michigan's delinquent property tax system.
  2. It involves transferring unpaid property taxes from cities to the county treasurer.
  3. The chargeback can result in significant financial implications for both the county treasurer and the city.

Waiting is Hard

58 implied HN points • 12 May 22
  1. The delinquent property tax system in Detroit has a confirmation process to ensure accuracy of tax balances.
  2. Confirmation of balances allows for automatic payment through programs like Pay As You Stay.
  3. Delinquent property tax balances are typically confirmed in May, reducing the number of properties with small balances.

The 2022 Tax Foreclosure Auction in Detroit

39 implied HN points • 19 Aug 22
  1. The number of properties tax foreclosed in Detroit has decreased significantly compared to previous years.
  2. There is a noticeable increase in renter-occupied homes facing tax foreclosure in 2022, possibly due to unique circumstances.
  3. The real estate market in Detroit, especially in areas like Fitzgerald, has seen a significant increase in home prices, showing a shift from the low prices seen during tax foreclosure auctions in the 2010s.

Property Tax Delinquency Amongst Detroit's Lowest Income Homeowners is Vanishing

19 implied HN points • 06 Feb 23
  1. Property tax delinquency among Detroit's lowest income homeowners is decreasing significantly, reducing their risk of tax foreclosure.
  2. The decrease is credited to various programs, policies, and organizations that have worked to eliminate homeowner property tax debt.
  3. Overall, property tax delinquency in Detroit has been declining since 2020, not only among homeowners but across different property types in the city.

The Profit Motive Will Remain (Redux)

0 implied HN points • 11 Apr 22
  1. New legal challenges are coming for Michigan's tax foreclosure system.
  2. The Michigan Supreme Court decision in Rafaeli, LLC v. Oakland County did not completely remove the profit motive from county treasurer offices.
  3. Most profits in the tax foreclosure system come from taxpayers paying late fees and interest, not from properties selling at auctions.

The Detroit Housing Market Amidst the Pandemic

0 implied HN points • 20 Apr 22
  1. Home prices in Detroit have grown rapidly during the pandemic.
  2. Long-vacant homes in Detroit are being rehabbed and reoccupied at an increasing rate.
  3. There are changes in Detroit's housing market dynamics from 2010-2019 to present, with declining vacant homes and rising prices.

Who's at Risk of Tax Foreclosure in Detroit as of April 15th, 2022

0 implied HN points • 21 Apr 22
  1. The number of occupied homes at risk of tax foreclosure in Detroit is decreasing significantly compared to previous years.
  2. Homeowners are getting out of foreclosure risk due to certain exemptions and assistance programs.
  3. Renter numbers at risk of tax foreclosure are falling as landlords are catching up on delinquent tax payments.