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.
We’ve talked in the newsroom for a few years about wanting to map out taxpayers and delinquents citywide. The city has had a record number of tax foreclosures since 2008. An estimated 66,000 properties are government-owned today, around 17 percent of the city’s parcels. We wanted to show how a shrinking group of neighborhoods is supporting the city through property taxes.
The file was in Adobe Acrobat, which made it challenging to use. We had to work through several steps to get the data usable by Excel and Access. Then we were able to get updated numbers from the treasurer on owners who paid 2011 taxes after the March 1 deadline. So, the 47 percent figure [of property owners who had not paid taxes] we presented was a number as of late January.
My colleague Mike Wilkinson mapped out each parcel using ArcMap, which allowed us to present a map in print and online of collection rates by neighborhood and census tract. We also used the map to internally identify areas, down to the block level, of where we wanted to interview folks. That included some examples where there was only one taxpayer on the block.
Your report came out the same week as the state financial review of the City of Detroit, which no doubt amplified the urgency of your story. But you might also have published a week before, coinciding with Mayor Dave Bing’s State of the City address, or held it until the March 1 deadline for yet more property taxes to go delinquent. Can you describe the process for choosing when to publish? I was a little surprised that the story ran on a Thursday and Friday…
Thursday and Fridays are our only home delivery days, so we often feature our best stories then. We no longer have a Sunday edition. We got updated data from the treasurer on tax payments through late January. We wanted to run the story soon so that those numbers were as current as possible. The timing worked well with the announcement of the state review team finding that Detroit is in a financial emergency.
In one of the most amazing passages, you describe how banks themselves are making a rational—if destructive—decision to walk away from properties rather than pay taxes. Why didn’t you name the banks that are doing this? And, for the record, what banks are they—national chains or local operations?
The specific mortgage servicer data wasn’t available to us through the United States General Accounting Office. They would only share overall numbers for proprietary reasons.
Did you have any lobbying role in the positions the paper took in a related editorial, “5 Ways for Detroit to fix its broken property tax system”? Are there other suggestions you’d offer as a way for Detroit to move forward?
That was a news story, not an editorial, that was reported on throughout the process. The five solutions were suggested by experts, city officials, and others who have studied the issue extensively. As with most projects, The Detroit News believes that, when tackling major public policy issues, it’s a civic duty to present possible solutions in an objective manner. We believe the article dovetailed nicely with the package of stories and made it clear that any solution will be difficult and perhaps require attention from not just Detroit, but state lawmakers as well.
Your piece highlighted, both in text and in graphics, people whose property tax was significantly lowered after they appealed inflated assessments. Why not have a sidebar advising readers how to do this (despite, or because of, the report’s description of it being a rigged system)? Or some other practical guide for readers living in the city? I wonder if this was absent because the News might not see its reader base as being property owners in the city.
The appeal deadline just passed for this year. I agree we should provide that information and probably will with future stories.
Not long ago, Michigan got a bad report card from the Center for Public Integrity that called out poor access to public information, lobbying disclosures, and political financing structures that effectively tell the public to “mind your own business.” What are the most important ways Michigan—or the City of Detroit, or county governments—could improve transparency and accountability, both to citizens and to reporters?
On public access, I do think it is a real problem in Michigan. The biggest barrier I have run into is governments manipulating the costs of providing FOIA requests to discourage us. It can be a huge deterrent especially with how tight newspaper budgets are today. For example, when we FOIA local government officials’ emails we need to narrow it down to a two-week period and only request emails between specific individuals. Otherwise we really get outrageous bills. I think there needs to be some kind of provision in the law that would prevent governments from overcharging.
What is your advice for other reporters who want to tackle large-scale projects like this, but are backed by publications that aren’t exactly swimming in money?
These days, everyone is asked to do more with less. But the need for strong, public service investigative reporting has never been greater. During the project, I continued beat coverage of several areas, including corruption at Wayne County and the Detroit Public Library system.
Large-scale investigations are best done incrementally. Create a budget for your stories with firm deadlines. Set short-, medium-, and long-range goals for your project and revisit and adjust regularly. Even when you are called away for other assignments, make sure that no week passes without doing at least some work on your project. As a project progresses, create a roadmap of what needs to be done—sources, FOIAs, points to hit in the articles—and systematically revisit. Most importantly, get early buy-in from your peers, team, and supervisors, and meet with them regularly.