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Monday June 21st, 2021 12:14PM

$500M fund to help Detroit neighborhoods, pay tax debt

By The Associated Press
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DETROIT (AP) — A billionaire businessman whose companies have invigorated Detroit's downtown announced a $500 million fund to improve neighborhoods on Thursday, starting with $15 million that will pay off the property tax debt of 20,000 of the city’s poorest homeowners.

The money will come from two philanthropic organizations connected to Quicken Loans founder Dan Gilbert, who announced the plan.

The $15 million Detroit Tax Relief Fund will leverage existing state and local programs that eliminate or reduce property tax bills, then pay off the remaining tax bill. It will be administered by a local nonprofit that also will provide counseling to homeowners to keep them out of future property tax debt. Other potential uses of the $500 million funding were not announced Thursday.

“No person should have to make the decision between keeping their home or feeding their family,” Gilbert, a Detroit native, said at a news conference.

“Partly because of interest and penalties accruing on an annual basis, numerous homeowners find themselves significantly underwater,” he added. “Not only did these homeowners live under the fear that their homes would be taken away from them, but this debt often prevents the property from being sold or refinanced.”

In addition to starting Quicken Loans, now known as Rocket Mortgage, Gilbert founded the Rock family of companies and owns the NBA's Cleveland Cavaliers. Quicken Loans moved to downtown Detroit in 2010. Its family of companies employ more than 24,000, with close to 5,000 living in the city, Gilbert said.

“We have always said that our commitment to Detroit had no borders and we care for every corner of the city as much as we do for downtown,” he added.

The Gilbert Family Foundation is providing $350 million of the $500 million in funding, and the rest will come from the Rock Community Fund.

“The money is there and it’s ready to be freed and targeted to any issue,” Gilbert said.

Gilbert chaired the Detroit Blight Removal Task Force in 2013, which concluded that property tax foreclosure was the primary cause of the city’s blight and subsequent abandonment of homes.

“One-third of the properties in Detroit have had these issues with back property taxes, interest accruing and penalties, and caused all kinds of hardship and strife,” Gilbert said. “It’s a problem that is ... massive and it's contagious.”

Quianna Sims is one of the Detroit homeowners who will have their tax debt paid off.

Sims said she bought her home in 2018, and that when she moved in there were no floors, no doors, peeling paint and not much of a kitchen left.

“I got behind trying to fix up the home,” said Sims, who eventually owed about $8,000 in back taxes. “If you don’t have the money to pay property taxes, you don’t have a house. It’s wonderful they are helping people who are trying to make it better.”

Wayne County, home to Detroit, also will invest $5 million in foreclosure prevention.

County Executive Warren Evans said that during the Great Recession one in four properties in Detroit went into foreclosure.

“Make no mistake, the gift will keep families in their homes,” Evans said.

___

This story has been updated to correct that the Detroit Tax Relief Fund is only the $15 million that will pay off the property tax debt.

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Personal Finance
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