DETROIT, MI — Word came this afternoon: Michigan Gov. Rick Snyder will announce Friday whether he intends to name an emergency manager for Detroit. If Snyder does make an appointment it will be an unsurprising development, but one that seems likely to rekindle the heated policy battles surrounding the governor’s expansion of emergency manager powers last year.
It’s against this backdrop that The Detroit News unveiled an impressive public service investigation last week that presented the staggering scale of fiscal dysfunction in Detroit. The gist: with local real estate values at rock-bottom levels, the city’s property-tax collection is in shambles. Assessments are often too high, delinquencies are epidemic, and those in the shrinking pool of property owners who pay their full levy often feel like suckers. Landowners are finding it more economical to buy their own foreclosed properties back at auction than to pay taxes to the city—a city that, quite apparently, is starved for cash, even as it pays former employees six-figure sums for part-time contract work. Even banks are making the decision to walk away from properties. In a city that had a glut of vacant buildings even before the Great Recession, the fallout from the housing crisis brings an almost surrealist tenor to the city’s challenges.
This maddening story was told by Christine MacDonald, the lead investigative reporter on the News’s project. “Half of Detroit property owners don’t pay taxes,” the first of the two-part series, was co-written with Mike Wilkinson and ran on Feb. 21. It was followed a day later by an examination of how “Detroit’s property tax system [is] plagued by mistakes, waste.” An interactive map tracked payment rates in every neighborhood in the city. Additional pieces looked at how Wayne County (which includes Detroit) is overwhelmed with foreclosures—to the point of ignoring 40,000 delinquent properties—and considered Snyder’s suggestion that land banks could be a solution for the city
Whether the city is run in the near future by an elected government or a state-appointed official, this sort of accountability journalism will be vital to Detroit’s quest for economic recovery. Over email this week, MacDonald told me she anticipates the property tax issue being “at the forefront of the upcoming mayor’s race.”
I had some more questions for her, particularly about her investigative reporting tactics. What follows is a lightly edited version of our interview.
How did this line of reporting open up to you? You’ve written before about the small number of people—can we call them speculators?—who are buying up a whole lot of land in Detroit, and that reporting seems to have the germ of the current investigation. What other pieces of the puzzle came together for this story?
Yes, we’ve been writing about land-related issues in Detroit for the last two years. It started with a project on the city’s largest private property owners, focusing on profiling one particular speculator at the top. He fueled his portfolio with cheap purchases at the annual county treasurer’s tax foreclosure sale. An opening bid for most properties is $500.
We broadened out from there, looking at who else was using the tax auction. We found property owners were buying their own land to escape thousands in tax debt. Because no one else wanted the land, they legally reclaimed it for pennies on the dollar. We talked with one suburban landlord who re-bought 34 properties at auction, erasing nearly $600,000 in tax debt. That was a really stark example to us of how the dysfunction in property system. It was one of the motivators behind taking a larger look at the system.
Can you describe the editorial resources went into this project? What was needed to do this investigation well?
We have a three-person investigative team at The News. Mike Wilkinson crunched the data, in between covering the corruption trial of ex-Mayor Kwame Kilpatrick. My editor was Joel Kurth, who oversaw the project and wrote several accompanying stories. I spent about four months reporting, writing, and dealing with editing. It was a difficult balance because Joel and Mike had to spend much of their time focused on the Kilpatrick trial.
How did you get access to 200,000 pages of tax documents, and what were the challenges of sifting through them for the most significant stories? At minimum, this was no doubt very dry reading…
The 200,000-plus page document was something that the city sends to the county treasurer every year after March 1. It’s a listing of all the parcels in the city, with a breakdown of their tax bill and whether the owner paid or not. The county collects on the city’s behalf after owners don’t pay. We filed a FOIA request in mid-July with the city for the document. This is the first time we’d seen it at The News.