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| Detroit. New Orleans. D.C. Predatory Cities Are on the Rise. | Detroit. New Orleans. D.C. Predatory Cities Are on the Rise. |
| (about 2 hours later) | |
| I coined the term “predatory cities” to describe urban areas where public officials systematically take property from residents and transfer it to public coffers, intentionally or unintentionally violating domestic laws or basic human rights. | I coined the term “predatory cities” to describe urban areas where public officials systematically take property from residents and transfer it to public coffers, intentionally or unintentionally violating domestic laws or basic human rights. |
| Ferguson, Mo., is one well-known predatory city. As a 2015 Department of Justice report showed, the police in Ferguson systematically targeted African-Americans and subjected them to excessive fines and fees. The U.S. Constitution does not allow judges to incarcerate defendants for unpaid debts without first determining their ability to pay. Nevertheless, local courts issued arrest warrants for unpaid fines and fees without these determinations. Minor offenses, like parking infractions, resulted in jail time, although lawmakers did not contemplate or approve such severe punishment. The Ferguson Police Department and courts prioritized revenue raising over public safety, transforming Ferguson into a predatory city. | Ferguson, Mo., is one well-known predatory city. As a 2015 Department of Justice report showed, the police in Ferguson systematically targeted African-Americans and subjected them to excessive fines and fees. The U.S. Constitution does not allow judges to incarcerate defendants for unpaid debts without first determining their ability to pay. Nevertheless, local courts issued arrest warrants for unpaid fines and fees without these determinations. Minor offenses, like parking infractions, resulted in jail time, although lawmakers did not contemplate or approve such severe punishment. The Ferguson Police Department and courts prioritized revenue raising over public safety, transforming Ferguson into a predatory city. |
| New Orleans is another. In 2018, a Federal District Court ruled that the revival of debtors’ prisons in New Orleans violated the 14th Amendment. At the time, a key source of Orleans Parish Criminal District Court’s funding was the fines and fees it collected. This created a structural incentive for judges to aggressively and erroneously pursue payment from those with no ability to pay, turning New Orleans into a predatory city. | |
| Washington, D.C., is yet another predatory city. While civil asset forfeiture laws allow the police to seize property that they suspect was involved in a crime, in Washington, D.C., property owners had to post bonds of up to $2,500 in order to challenge the seizure. If the owner could not raise money in time, the D.C. Police Department sold the property, and the money went into its annual budget. In a two-year period, the Police Department made $4.8 million in profit by seizing money from over 8,500 people as well as seizing 339 vehicles. According to a federal court, this abuse of civil forfeiture laws was illegal. | Washington, D.C., is yet another predatory city. While civil asset forfeiture laws allow the police to seize property that they suspect was involved in a crime, in Washington, D.C., property owners had to post bonds of up to $2,500 in order to challenge the seizure. If the owner could not raise money in time, the D.C. Police Department sold the property, and the money went into its annual budget. In a two-year period, the Police Department made $4.8 million in profit by seizing money from over 8,500 people as well as seizing 339 vehicles. According to a federal court, this abuse of civil forfeiture laws was illegal. |
| The current pandemic has created fertile ground for predatory cities to sprout. With local businesses shuttered, unemployment skyrocketing, and many people unable to pay their rent and mortgage payments, Covid-19 has brutalized local economies. Michigan’s Treasury Department estimates 2020 tax revenues could plummet by $1 billion to $3 billion, while New York State has projected a revenue shortfall of more than $13 billion. Although many cities must slash budgets to ensure their financial survival, Covid-19 is also intensifying the need for essential, yet expensive, social services. | The current pandemic has created fertile ground for predatory cities to sprout. With local businesses shuttered, unemployment skyrocketing, and many people unable to pay their rent and mortgage payments, Covid-19 has brutalized local economies. Michigan’s Treasury Department estimates 2020 tax revenues could plummet by $1 billion to $3 billion, while New York State has projected a revenue shortfall of more than $13 billion. Although many cities must slash budgets to ensure their financial survival, Covid-19 is also intensifying the need for essential, yet expensive, social services. |
| Stretched to its financial breaking point, Detroit has become a predatory city. Mrs. Sarah Dennis’s story gives a glimpse into how, in the midst of this global pandemic, financially vulnerable local governments prey upon their most vulnerable citizens. | Stretched to its financial breaking point, Detroit has become a predatory city. Mrs. Sarah Dennis’s story gives a glimpse into how, in the midst of this global pandemic, financially vulnerable local governments prey upon their most vulnerable citizens. |
| Mrs. Dennis is now 79 years old and has lived in Detroit her entire life. After a long marriage, she became a widow at 47. She then met a widower, Earl Dennis, at the Church of God on Wisconsin Street. She played the piano and he was an usher. They were married in 1990, and she immediately moved into his humble home on Detroit’s east side. Every Easter, the whole family would sing hymns like “Great is Thy Faithfulness,” and Mrs. Dennis would make a sweet potato pie, lemon poundcake, and lemon coconut pie that brought tears to the eyes of grown men. | Mrs. Dennis is now 79 years old and has lived in Detroit her entire life. After a long marriage, she became a widow at 47. She then met a widower, Earl Dennis, at the Church of God on Wisconsin Street. She played the piano and he was an usher. They were married in 1990, and she immediately moved into his humble home on Detroit’s east side. Every Easter, the whole family would sing hymns like “Great is Thy Faithfulness,” and Mrs. Dennis would make a sweet potato pie, lemon poundcake, and lemon coconut pie that brought tears to the eyes of grown men. |
| Covid-19 killed Mr. Dennis, exactly two weeks before Easter, the couple’s favorite holiday. Mrs. Dennis was, once again, a widow, after 30 years of marriage. The funeral home live streamed his home-going service, but Mrs. Dennis could not attend because she was in the hospital fighting Covid-19. She miraculously recovered. Although convalescing, she restarted another battle, this time against property tax abuse in Detroit. | Covid-19 killed Mr. Dennis, exactly two weeks before Easter, the couple’s favorite holiday. Mrs. Dennis was, once again, a widow, after 30 years of marriage. The funeral home live streamed his home-going service, but Mrs. Dennis could not attend because she was in the hospital fighting Covid-19. She miraculously recovered. Although convalescing, she restarted another battle, this time against property tax abuse in Detroit. |
| The Dennis home is a quaint, gray brick ranch-style house built in 1954. In January, Mayor Mike Duggan’s administration was prepared to tax the home as if it were worth $26,800. Given the poor neighborhood conditions and the market price of recently sold comparable properties, the city’s estimated market value was far too high. Before becoming ill, Mrs. Dennis sought help from the Coalition for Property Tax Justice’s Pro Bono Property Tax Appeal Project, which I helped to establish. Once the project intervened, the city finally conceded that the home’s market value is $16,000 — 40 percent less than it initially estimated. | The Dennis home is a quaint, gray brick ranch-style house built in 1954. In January, Mayor Mike Duggan’s administration was prepared to tax the home as if it were worth $26,800. Given the poor neighborhood conditions and the market price of recently sold comparable properties, the city’s estimated market value was far too high. Before becoming ill, Mrs. Dennis sought help from the Coalition for Property Tax Justice’s Pro Bono Property Tax Appeal Project, which I helped to establish. Once the project intervened, the city finally conceded that the home’s market value is $16,000 — 40 percent less than it initially estimated. |
| Most homeowners do not know about the property tax appeal process or cannot afford representation, so they are stuck with inflated property tax bills. Mrs. Dennis lamented: “They are ripping us off. The property taxes are so high. Most of the people in this area cannot afford the taxes because they were overcharged.” | Most homeowners do not know about the property tax appeal process or cannot afford representation, so they are stuck with inflated property tax bills. Mrs. Dennis lamented: “They are ripping us off. The property taxes are so high. Most of the people in this area cannot afford the taxes because they were overcharged.” |
| Mrs. Dennis is not alone. In a newly released study, the University of Chicago’s Center for Municipal Finance analyzed Detroit’s 2016-2018 assessment data. They find that — while the average home price was $35,600 — the majority of lower-valued homes (less than $19,000 sale price) were assessed in excess of the Michigan Constitution’s established limit. Due in large part to systematic overcharging, Detroit has one of the highest property tax foreclosure rates of any city since the Great Depression. In my recent ethnographic study, “Predatory Cities,” I explain how systemic racism, corporate malfeasance, economic decline, political instability, and poor federal and state level funding opened the door to predation in Detroit. I identify Wayne County and investors who buy homes in the tax foreclosure auctions as the primary financial beneficiaries. | Mrs. Dennis is not alone. In a newly released study, the University of Chicago’s Center for Municipal Finance analyzed Detroit’s 2016-2018 assessment data. They find that — while the average home price was $35,600 — the majority of lower-valued homes (less than $19,000 sale price) were assessed in excess of the Michigan Constitution’s established limit. Due in large part to systematic overcharging, Detroit has one of the highest property tax foreclosure rates of any city since the Great Depression. In my recent ethnographic study, “Predatory Cities,” I explain how systemic racism, corporate malfeasance, economic decline, political instability, and poor federal and state level funding opened the door to predation in Detroit. I identify Wayne County and investors who buy homes in the tax foreclosure auctions as the primary financial beneficiaries. |
| Detroit is not an isolated case. A new national study also completed by the Center for Municipal Finance finds that, across the country, owners of lower-valued properties pay too much property tax while owners of higher-value properties pay too little. This phenomenon got much worse during the Great Recession in the late 2000s. Because of Covid-19, we’re now in another recession. Since property taxes account for about 30 percent of general revenue at the local level, cities may close budget deficits by overtaxing certain homes, succumbing to predation. | Detroit is not an isolated case. A new national study also completed by the Center for Municipal Finance finds that, across the country, owners of lower-valued properties pay too much property tax while owners of higher-value properties pay too little. This phenomenon got much worse during the Great Recession in the late 2000s. Because of Covid-19, we’re now in another recession. Since property taxes account for about 30 percent of general revenue at the local level, cities may close budget deficits by overtaxing certain homes, succumbing to predation. |
| All cities are certainly not predatory. But, with Covid-19 exacerbating existing budgetary shortfalls, Senate Republicans must broaden funding for state and local governments by approving the $3 trillion coronavirus relief bill passed by House Democrats in May. If not, cities may buckle under the increasing monetary pressures and become predatory. With a melancholy tone, Mrs. Dennis recalled, “The very last thing my husband said to me, in a small soft voice, was, ‘Who is going to take care of you when I am not here?’ ” Although cash starved, local governments must care for — and not victimize — upstanding citizens like Mrs. Dennis. | All cities are certainly not predatory. But, with Covid-19 exacerbating existing budgetary shortfalls, Senate Republicans must broaden funding for state and local governments by approving the $3 trillion coronavirus relief bill passed by House Democrats in May. If not, cities may buckle under the increasing monetary pressures and become predatory. With a melancholy tone, Mrs. Dennis recalled, “The very last thing my husband said to me, in a small soft voice, was, ‘Who is going to take care of you when I am not here?’ ” Although cash starved, local governments must care for — and not victimize — upstanding citizens like Mrs. Dennis. |
| Bernadette Atuahene (@ProfAtuahene) is a law professor at IIT, Chicago-Kent College of Law, and the author of “Predatory Cities.” | Bernadette Atuahene (@ProfAtuahene) is a law professor at IIT, Chicago-Kent College of Law, and the author of “Predatory Cities.” |
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