Detroiters say ‘NO’ to more tax giveaways to gentrifiers – Liberation News
On June 21, the Detroit City Council postponed its scheduled vote on billionaire investor Dan Gilbert’s request, real estate company Bedrock, for an additional $60 million tax abatement for its Hudson project in downtown Detroit. Detroit. The city council was forced to postpone the vote for a week, until June 28, in the face of widespread community opposition to the measure.
Community members are rallying to attend the hearing to stop this latest giveaway to the rich. They are outraged by this donation of public money to Gilbert, Detroit’s chief gentrifier and one of the richest men in the world, with a net worth of $16.7 billion.
This tax relief is being sought to help fund Gilbert’s construction of new buildings in downtown Detroit, consisting of a 12-story mid-rise building with over 500,000 square feet of office and event space, and a 49-story tower with a 225-room hotel. and about 100 luxury condos or apartments on the upper floors.
Gilbert’s tax grants starve funding for schools and parks
This new tax abatement request is in addition to more than $600 million in tax subsidies that Gilbert has already received for his luxury project. These tax giveaways were primarily funded by tax increases, in which Gilbert and Bedrock, with funds funneled through the Detroit Downtown Development Authority, capture property taxes derived from increases in property value. resulting from development.
This property tax capture will allow Bedrock to secure approximately $250 million in funding for its project by authorizing the capture of an annual average of $18.56 million in newly generated property taxes at the sites over the next 30 years.
Gilbert also gets about $330 million in income tax earnings paid by construction workers at the site, as well as income tax payments over the next 40 years from all workers there. employees. It also captures sales and use taxes that would otherwise be paid to the government, totaling around an additional $60 million.
These numbers are all from the City of Detroit Brownfields Redevelopment Plan on the Hudson Block Development prepared by Jared Fleisher of Bedrock on October 12, 2017. Fleisher’s recent lies to the City Council that schools and other municipal services will not be affected by these tax giveaways. are corrected by the paper he authored, which notes a $230 million direct reduction in local revenue, including $145 million in school operating revenue, a $31 million reduction in tax revenue state school, a $37 million cut for the regional school services authority primarily for bus transportation, and a $15 million cut in revenue for parks and to maintain the Wayne County Jail.
Gilbert took advantage of subprime, predatory loans that led to massive foreclosures
Gilbert earned his money through his mortgage companies, Quicken Loans and Rocket Mortgage. He largely profited from the subprime mortgage crisis of 2005 to 2015, where tens of millions of African Americans and Latinos were lured by banks and financial institutions into taking out fraudulent and unpayable mortgages.
Detroit, as the city with once the highest rate of black homeownership in the United States, has been particularly hard hit by this criminal scheme, as 65,000 families have been forced from their homes following foreclosures stemming from of these predatory loans. Many Detroit neighborhoods were destroyed and the city lost a quarter of its population from 2005 to 2015.
Gilbert’s Quicken Loans Directly Seized out of 1,084 homes in Detroit, 52% of which are now destroyed or abandoned. But his biggest role in the crisis was originating fraudulent subprime loans, which he would then sell to Countrywide, Indy Mac and the other banks, and later to Fannie Mae and Freddie Mac.
Mortgage Fraud Investigators (MFI) Miami searched properties listed on the Wayne County Deeds Registry and reviewed original mortgage records in Detroit that listed Quicken Loans or Rock Financial as the original mortgagee from 2003 to 2007. They sampled 75 homes that had Quicken or Rock Financial as the original mortgage lender. Among the samples, about 71% of the properties were subject to foreclosure within the first 24 to 36 months of being sold on the secondary housing market. Quicken sold these properties to Fannie Mae, Freddie Mac and private mortgage security trusts on Wall Street.
Quicken Loans was also found guilty of fraudulently and artificially inflating the ratings of the loans it originated. In 2016, a federal judge appraised Quicken at $11 million in a West Virginia case for those inflated ratings. The Michigan State Constitution provides that no property should be valued at more than 50% of the market rate. Some 55 to 85 percent of Detroit properties between 2009 and 2015 broke state law through inflated assessments. As a result, Detroit homeowners were subjected to inflated property tax bills and resulted in massive property tax foreclosures and loss of homes. Unfortunately, officials in Michigan and Detroit never pursued actions like the West Virginia case.
Gilbert and Banks Owe Detroit Reparations
In Detroit’s last election, Detroit residents voted to establish a reparations task force, in part to address the housing wrongs Detroit residents have suffered. Rather than the city council vote for more tax breaks for Gilbert to fund developments for the wealthy, the city should demand that Gilbert and all the banks and mortgage companies that caused the destruction of Detroit neighborhoods pay reparations. to the community to rebuild Detroit as a centerpiece. for black owners, it used to be.
These repairs must be administered by the community, not by the mayor and other politicians who are at the disposal of the banks, Gilbert and other developers. Schools must be repaired and rebuilt with clean water and safe and comfortable classrooms suitable for learning. Residents need to have affordable housing and municipal services that they have paid exorbitant amounts for over the years. Transportation, clinics, community centers and athletic opportunities must be made available to Detroiters with these funds.