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Detroit squatters can keep homes

Occupants of thousands of Motor City homes that didn't sell at a tax auction can purchase their abodes for $500. That includes squatters, renters and owners who didn't pay taxes.

By Karen Datko Feb 7, 2012 5:18PM

Unlike the man who claimed a pricey Dallas home for $16, squatters in Detroit houses that failed to sell at a tax auction may be able to keep their new digs -- for a mere 500 bucks.


The Detroit News reports:  

In a stark sign that paying property taxes is optional for some in Detroit, Wayne County Treasury officials decided last week its workers will go door-to-door to some of the 6,500 city properties unsold at last fall's tax auctions and offer to make a deal with whoever is living inside. That could include renters, squatters or the owners who defaulted on their taxes.

If taxes had been paid on the 1,500 or so occupied units last year, that would have added $17.6 million more to Detroit's shrinking coffers, the News estimates.


The fact that some people will be able to keep their homes for $500 after not paying taxes for three years -- or just by virtue of squatting there -- hasn't gone over well with other taxpaying residents of Motor City.


Said one reader of MLive in Detroit: "Why am I paying ever-increasing taxes on a property worth less than half of what I paid for it if paying these taxes is optional?" Post continues below.

The Wayne County treasurer's office thinks this is better than allowing the number of vacant houses to grow. About 1,200 homes sold in a similar program last year.


Here's the tale of one such house up for sale for $500 in this go-round, according to the News' report: A house that sold for $124,000 seven years ago was purchased on a land contract for $10,000 in 2010, but the new owner couldn't pay $17,900 in taxes, fines and interest that accumulated since then.


The owner didn't realize he could have purchased the home at the last tax auction -- for a minimum bid of $500. But others who owe back taxes have figured this out. The newspaper says:

The News has reported more than 400 owners last fall appeared to buy back their properties for pennies on the dollar, costing the city and schools at least $4.7 million in taxes and liens.

It all sounds like more sad news for Detroit, already No. 2 on Forbes' "10 most miserable U.S. cities of 2012" list, right after foreclosure-laden Miami. Forbes says:

Home prices are down 54% over the past three years, the worst decline in the U.S. The median price was $38,000 last year in the Detroit-Livonia-Dearborn metro division.

Under the latest deal, those who successfully purchase the home they now occupy will have to pay property taxes for two years to maintain ownership.


More on MSN Money:

Feb 7, 2012 11:09PM
Dennis Elliot:  You are right on.  The system rewards people who do not follow the rules, and those that do get screwed.  
Feb 8, 2012 11:06AM

the reason there are so many vacant houses in Detroit is because of the behavior of the people who live there


better to tear these houses down than to let thieves and deadbeats keep them and further the decline in the area


....whoever said this is transforming Detroit into a version of Haiti on US soil was right

Feb 8, 2012 11:37AM

Once again, negative behavior is rewarded and positive behavior is punished.


If you worked hard, paid your bills and taxes you are now further behind those who did not. This is a sad, sad state of affairs.   In the end, nothing good will come from this hand out.

Feb 7, 2012 11:40PM
...while the rest of us pay their way !     Such B.S.
Feb 7, 2012 10:16PM
If those who are currently living there can purchase these properties for pennies on the dollar, why not all of the residents there? Those that have paid faithfully are getting screwed by this. Offer them the same sweet deal. Also, if businesses were allowed the same deal, perhaps this could stimulate the local economy?
Feb 7, 2012 11:44PM
They claim the Detroit Schools are so bad that the test show the students in high school have the same scores as someone who never went to school period! I'll pass on Detroit!
Feb 8, 2012 11:41AM
No Shivan, what you don't get is us "people" who have worked our butts off to pay our mortgages and stay current on our taxes are the ones paying for those who aren't.
Feb 8, 2012 11:22AM
Sounds like NATIONALIZED housing to me !!! Led by our govt take from the RICH and MIDDLE CLASS and give to the LOW LIFES for pennys on the dollar !!! Redistribution of wealth !! CONGRATULATIONS  to all you scamming new home owners !!! Just stay in your little ghetto utopia !! GENERATION SQUATTER !!!!!!!!!!!!
Feb 7, 2012 10:55PM

Yeah, sounds like the American dream is turning into a nightmare!

Feb 8, 2012 12:07PM
They should go in a bulldoze all of those houses and turn all the land back into fields  no roads no houses no places to hide no crime then there would be less tax burdon on the city and ultimately the middle class that is paying for all of this!!
Feb 8, 2012 10:20AM
Soooooooooooo, Why should I pay my property taxes? I am just getting by, but I pay my taxes! This reeks of socialism and I am sure that those tax dodgers will vote for the thugs that let them get away with this! Angry
Feb 8, 2012 9:21AM
First off Detroit is a ghetto!! you can't compare it to the housing crisis in Miami. In Miami you don't see what you see in Detroit. Drug dealers on every corner, houses that are falling apart and a city that does nothing about it except elect crupt city officials. In Detroit now they are letting houses sell for $500.00 and they are run down but yet there are Cadillacs, BMW's and Mercedes in the driveways. And beleive me I know since I lived in Michigan before the housing crisis started and I have seen it. I along with other avoided Detroit like the plague. I also lived and still have a home in South Florida (Palm Beach) and a 2nd in Coral Gables (South Miami) and people in Miami may have lost jobs, and some struggle to pay the mortgage but they take pride in where they live. Detroit will never come back and it's because of the people who live there who don't care what it looks like.
Feb 8, 2012 7:17AM
For some of you blaming the mortgage companies for this.  It is not their fault.  Jimmy Carter and Bill Clinton wanted to make it so every person could buy a house.  Jimmy with the community reinvestment act and Bill telling the banks to loan the money and Freddie and Fannie to back the loans.  The banks were pretty much forced into this.  Put the blame where it should be.  We are not entitled to a house or any other item for sale.  If you have the money and can afford it, you buy it.  If you cannot afford it, you do not buy it.
Feb 8, 2012 7:13AM
You have just made it ok to be a moocher.  You have now just made it ok to break the law and not pay taxes.  You have now justified that paying taxes is the thing to do.  How many people are now looking at the consequences of not paying their property taxes?  So many times, the politicians are so short sighted and never look at the long term consequences of their actions or inactions.  They may get more money in the short term, but guaranteed that when the people who are paying their taxes, figure out how not to pay them and not lose their houses, it is going to happen.  Isn't Detroit and surrounding cities almost solely ran by democrats?  The same ones that are looking out for the middle class?  Well, the democrats just stuck it to the middle class who have paid their taxes like they are supposed to.
Feb 8, 2012 8:33AM
for those of you that want to blame repulicans for detroit, think about why the jobs left. was it because the unions drove wages up to much for a company to compete with foreign labor or  was it because the products being made there were not any good.  remeber there are parts of this great country flourishing because of fair wages for a good product.
Feb 8, 2012 12:30PM
That's just great, I'd like to meet the low life handout creep who thought that one up. What's worse is they were actually able to pull it off. So now Detroit is basically GIVING houses away to the ones who contribute NOTHING to this country. What kind of message does that send to poor kids? The only losers in this down economy are the middle class wage earners who basically pays all the taxes. We get beat up from every direction, from out sourced jobs and practically nothing interest wise on our life savings to sky rocketing heath insurance costs, employer provided benefit cuts and no pay raises in years ( were lucky if we don't get pay cuts). Of course the wealthy are richer now than ever. So now the poor are reaping FREE HOUSES????
Feb 8, 2012 12:24AM
They have to pay $1000/ month in taxes on a house valued around $124,000?
The payments wouldn't be that high. No wonder Detroit is going down the tubes.
Feb 8, 2012 8:58AM
burn it all to the ground and start over.
Feb 8, 2012 6:55AM
Tax cheats, squattersd, and others cannot be allowed to cheat their fellow citizens and communities by living as parasites.  If the city allows them to, the problem will only increase expotentially and collapse Detroit for good. The city and all law abiding citizens properly now own these properties and the City needs to seize them and rent them out with the rent going into tax coffers.  If that is not feasible for all, then tear them down or use them for Detroit fire Dept. practice.  When things improve as they utimately will, the City can then sell off the properties and / or rezone the areas for mixed used residential / commercial or even industrial and recoup their monies and then some.
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