Billionaire and Quicken Loans co-founder Dan Gilbert is leading an effort to erase property tax debt for thousands of Detroit residents. The Gilbert Family Foundation and Rocket Community Fund are pledging $500 million over the next 10 years to improve the city’s neighborhoods.
The initial pledge of $15 million to erase tax debt is expected to help 20,000 households this year. Officials with the nonprofits say the homeowners have an average tax debt of $2,500.
“We’ve learned along the way that there are systemic and generational issues that take resources as well as considerable time and effort to properly address.” — Jay Farner, CEO of Rocket Companies
“It was very clear to us that it was property taxes that caused the majority of the blight in Detroit and the vast majority of citizens at one point were in tax foreclosure, with interest and penalties that debt kept building, in some cases more than they owed on the mortgage. And people would just walk from the houses because they just couldn’t afford it anymore,” Gilbert told CBS News This Morning in an interview announcing the $500 million initiative and talking about his recovery from his 2019 stroke.
Housing analysts say Detroit is overtaxing its lowest-valued homes and the assessment disparity has widened in recent years. This year, Detroit saw a 20% surge of applications to its property tax assistance program, which will put homeowners in the pipeline for Gilbert’s donation.
Mayor Mike Duggan says despite reforming state property tax laws in recent years some people have been left behind.
“We still have 20,000 people below that poverty level who still have [to pay] taxes. And what the Gilbert family is saying today is that for those who are very low income, they’ll pay off the rest of it and give them a fresh start.”
Residents must apply through Detroit’s Homeowners Property Tax Assistance Program to access Gilbert’s relief funding. The initiative gives qualifying households tax exemptions based on income. Gilbert, who owns a large swath of real estate in Detroit, has received hundreds of millions of dollars in tax breaks for several of his properties.
Wayne County Executive Warren Evans says the initiative will help address the region’s housing crisis.
“You have ongoing foreclosures and then you have the population loss that comes from the foreclosures. You have reduction in property values of the surrounding properties and the cycle just gets worse and worse.”
Evans says in the years since the Great Recession about one in four homes in Detroit were foreclosed upon. After the process was paused at the onset of the pandemic foreclosures in Wayne County are expected to resume later this year.
The Rocket Community Fund will also invest $150 million of the overall $500 million commitment to continue to focus on its primary issue areas of housing, employment and public life. The fund says its Neighbor to Neighbor program helped drive a 94% reduction of the number of homes entering the 2019 Wayne County Tax Auction compared to 2015. The number of owner-occupied homes that entered the auction — 250 — was the lowest in more than 15 years.