Detroiters ripped off by overinflated property assessments may see relief

Michigan Attorney General Dana Nessel has agreed to explore whether the city of Detroit can legally provide cash compensation or property tax credits to tens of thousands of Detroiters who were illegally overtaxed by overinflated property assessments.

Activists recently met with Nessel to urge her to issue an opinion on the legality of the potential remedies after Mayor Mike Duggan’s administration claimed state law prohibits the city from compensating residents with cash payments or property tax credits.

"This was a huge win for overtaxed Detroit homeowners,” state Rep. Cynthia Johnson, D-Detroit, said of Nessel taking up the issue. “They should not have to fight their city to honestly interpret state law, but when they do, the attorney general should step in.”

Homeowners were overtaxed by more than $600 million. The property tax assessments resulted in as many as 100,000 Detroiters, most of them Black, losing their homes to foreclosure between 2010 and 2016.

Duggan has admitted that many homeowners received excessive tax bills because their property was assessed at more than 50% of their market value, the limit set by the Michigan Constitution.

The Coalition for Property Tax Justice, a group of advocates for impacted homeowners, along with the ACLU of Michigan, National Lawyers Guild’s Detroit and Michigan Chapter, Michigan Poverty Law Program, Detroit Justice Center, and Street Democracy released an opinion on Friday that concluded the city can legally provide cash payments and property tax credits to reimburse homeowners.

Detroit City Council President Mary Sheffield, who supports cash payments and property tax credits, said Nessel’s opinion is “critical” to determining how residents can be reimbursed.

“It will allow city council to shape the ordinance to compensate Detroiters to the fullest extent permitted by state law,” Sheffield said in a statement Wednesday.

If Nessel agrees that the remedies are legal, Duggan must then make a decision about how to reimburse impacted residents, said Bernadette Atuahene, a law professor at the University of Wisconsin Law School who convenes the Coalition for Property Tax Justice.

“If the current administration wants to remove property tax credits and cash compensation from the menu of options, that’s a political decision that they must make outright,” Atuahene said. “Mayor Mike Duggan cannot hide behind a faulty interpretation of state law as a cover for a political decision.”

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