Originally Published in the Hamtramck Review Feb 20, 2022
For the past two years, Hamtramck homeowners with delinquent taxes have had a reprieve from tax foreclosure. But, this year, tax foreclosure is back, and the March 31 deadline will soon be upon us. 166 Hamtramck properties are at risk of tax foreclosure this year, including 86 owner-occupied homes (by my best estimation). The stakes are high, but we have never had such good tools to protect the homes of the most vulnerable. A poverty exemption for low-income homeowners has the power to STOP foreclosure, and reduce tax debt with a new payment plan called “Pay As You Stay.” These tools are nothing if residents aren’t aware of them, so please read on and consider becoming an advocate for your neighbors to spread this information before it’s too late.
Michigan has some pretty harsh policies when it comes to punishing unpaid property taxes- according to state law, the government can foreclose and take full ownership of private property if taxes fall into delinquency for three years. Fortunately, in addition to these harsh laws, Michigan has some kind ones: for example, every city must offer a “Poverty Tax Exemption” to allow low-income homeowners to waive or reduce these taxes. For many years, the City of Hamtramck has made this exemption all but impossible for residents to get.
In previous years, the City had rules that created a sort of “Catch-22” to prevent applicants from getting approved. They mandated that applicants without earned income file income taxes in order (which is against the state law), and then they said that the results of the income tax prevented the person from getting approved! They counted the home itself as an asset, meaning that someone would have to lose or sell their house in order to qualify to get a tax break on it! Advocates at United Community Housing Coalition took these denials to the State Tax Tribunal and won case after case. One State Magistrate even called Hamtramck’s policies “Invalid and unlawful.” But each victory was a hard battle that made no difference in the overall policies of the City. Fortunately, City leadership and State laws have changed some of these practices for the better.
Following these reforms, what we need most now is to change the income guidelines. Hamtramck’s are extremely low. Whereas a single-person household meets the federal poverty guidelines if they earn $12,880/yr, the City of Hamtramck only offers a 25% exemption for someone at that income level. Someone must earn under $7,405/yr to get a full exemption! This is the case of a neighbor whom I have assisted with her Poverty Exemption Application for many years. When she wasn’t flatly denied, her approval was only partial, despite her low income. Hamtramck City Council should be commended for making steps toward increasing these income guidelines, but they have a long way to go to even approach the guidelines of our neighboring cities. Hopefully next year we continue to see these guidelines expand.
No matter what changes we make, a tool is only helpful if it is used. Very few of Hamtramck’s low-income homeowners are aware of the Poverty Tax Exemption. So let’s fix that:
|Where Can I get it?In Person: At City Hall with the Assessor’s Office or in the foyer next do the Hamtramck Police.Online: https://hamtramck.us/wp-content/uploads/2022/01/2022-City-of-Hamtramck-Poverty-Exemption-Application-Packet.pdf|
|When Is It Due?If you need the Poverty Exemption to prevent Tax Foreclosure in 2022, it must be completed and submitted by Monday March 14, 2022. Otherwise, the application can be submitted anytime before the December board of review. Sooner is better so that you can accurately budget for how many taxes you will have to pay.|
|Who Qualifies?To qualify, you must:Own your homeLive in it as your principle residence/homesteadHave a qualifying household incomeNot exceed asset guidelinesComplete and submit the application!|
|What If I Need Help?Call the Tax Foreclosure Hotline at United Community Housing Coalition (313-405-7726). However, their staff capacity is extremely limited so you may have trouble getting help filling out an exemption before March 14.|
|How Can I Help My neighbors?If you are not a low-income homeowner but you want to help a neighbor who may be at risk of losing their home, contact me, Michele Oberholtzer Zimmerman at email@example.com. I will match you up with a nearby address.|
Under THE GENERAL PROPERTY TAX ACT Section 211.7u a homeowner who, “by reason of poverty, is unable to contribute toward the public charges is eligible for exemption in whole or in part from the collection of taxes under this act.”
I personally believe that no one who is able to pay their taxes would allow the roof over their head to be seized if they could afford to stop it. So those are the very people this act is referring to. None of us benefit when our neighbors lose their homes. We cannot assume that people will find the help they need- especially when language barriers, Covid boundaries, and the general complexity of these policies make it difficult for people to “opt in” to the benefits they qualify for. Let’s lend a hand to make sure that no one loses their homes for taxes they are exempt from!