E3 The $500 Billion Bias Problem

How an unfair property-tax system blocks the building of Black wealth

- Jason Grotto

It’s the last weekend of the month, so Di Leshea Scott’s Saturday begins with a long wait at the post office to get a money order for her rent. From there, she drives north to hand-deliver it at a drab office building just outside Detroit’s city limits. As always, this ritual leaves her angry and frustrated; her landlord refuses to give her a lease, she says, or to make basic repairs. When it rains, she needs three buckets upstairs to catch leaks. The back porch is collapsing before her eyes.

She stands outside the landlord’s empty office and sighs, then moves a welcome mat aside and flings an envelope with her money order under the door. Another $825 destined for someone else’s bank account.

Despite its flaws, Scott clings to her little two-story Tudor on Lawrence Street with a devotion that’s hard to fathom, until you know the house’s ownership history. She’s renting a home she used to own. Wayne County took it away from her in 2013, after she fell three years behind on her property tax payments. Her house, which she’d bought in 2005 for $63,800, was auctioned off by the county and snapped up by an investment company for less than $5,000. Scott lost every cent she’d put into it.

She shouldn’t have. For years the city of Detroit used inflated valuations of Scott’s house to calculate her property tax bills, charging her thousands of dollars more, cumulatively, than she should have paid, according to a Bloomberg Businessweek analysis of her tax records. Hers was among tens of thousands of homes in Detroit’s lower-income Black neighborhoods that the city’s assessors routinely overvalued. Meanwhile, they systematically undervalued homes in affluent areas, reducing the taxes those homeowners paid.