Ownership of many properties uncertain
Report says at least 5,500 in Detroit have title concerns
There are at least 5,500 intergenerational properties in Detroit — worth more than $268 million — with unclear ownership.
That’s according to a new report released Tuesday by the think tank Detroit Future City. Often referred to as heirs’ properties, or tangled titles, it’s a complicated legal situation that arises when a person dies and leaves behind a property without formal legal proceedings, like a will, to prove who owns it.
Title problems can prevent people from getting into assistance programs that help pay for home repairs or property tax relief. Without the aid, homes could fall into property tax foreclosure. When a title doesn’t transfer within a family, it can be a barrier for families in building generational wealth through their homes. The first-of-its-kind analysis for Detroit looks into the scale of heirs’ properties in the city and solutions to resolve and prevent title problems.
“Being able to do this assessment and have a better understanding of what the heirs’ property issue looks like in Detroit allows us to prevent potential foreclosure issues and retain wealth in Black communities where there is a higher potential of loss,” said Anika Goss, CEO of Detroit Future City.
Researchers cross-referenced property data from Detroit’s Office of the Assessor with death records from 2014 to 2022 to identify at least 5,525 residential heirs’ properties. The report cautions that the number of heirs’ properties identified in the analysis is likely an undercount.
Detroit Future City conducted the analysis at the request of the Gilbert Family Foundation, which funded the report.
“Detroit Future City’s research reveals an important but underreported vulnerability to housing stability in Detroit,” Laura Granneman, executive director of the Gilbert Family Foundation, said in a news release. “Too many Detroit residents are losing out on the stability and equity of homeownership because they lack the legal resources to navigate the complex probate process. We look forward to working with stakeholders around the city to act on these findings.”
Here are the main takeaways:
This year, 496 heirs’ properties are at risk
of tax foreclosure. In order for residents in these homes to apply for a property tax exemption, they must have the deed to the home in their name.
In 2021, there were 215 heirs’ properties in areas with a median h home sale of at least $150,000, indicating that these are middle-class households.
Seventy-six percent of the known heirs’ properties are likely h homeowners, but nearly a quarter are occupied by renters, who may not know the risks of living in a home with uncertain ownership.
Areas with the most heirs’ properties have a higher Black h population, homeownership rate and home sale prices compared with other census tracts with heirs’ properties.
Neighborhoods with the highest concentration of these h properties include Bagley, Airport Sub, Hawthorne Park, Cadillac Heights, Schaefer 7/8 Lodge and Schulze.
The identified homes with tangled titles equate to tens of millions of dollars’ worth of real estate that could be at risk. Through focus groups and interviews, the researchers found a lack of awareness among those dealing with heirs’ properties. Residents may not be aware of property transfer laws and the complex, lengthy process to execute a will. They also may not be able to afford the cost of going through probate — the legal process that handles a person’s estate after they die.
Homes are the “ultimate purchase” for generational wealth, Goss said. There are some neighborhoods where homes are more likely to be at risk of becoming heirs’ properties, including parts of the West End/East Canfield, Dexter-Linwood, Bethune Community and Brightmoor/Riverdale. That’s due to the share
of people who are 65 and older and living alone, among other indicators, according to the report.
Estate planning is important as a preventative measure, Goss said.
The report lays out solutions to prevent the loss of homes and generational wealth, such as increasing the capacity of available resources in Detroit, including legal aid programs; ramping up public awareness on the importance of wills and estate planning; expanding low-cost will and estate planning support and allowing people to access city assistance programs by providing alternative proofs of ownership while their title problems are being resolved.
“Some may not be aware that they are not technically on the deed to that home. They might be paying property taxes, living there and have no idea and so you want to try to reach those folks before they are in a moment of crisis,” added Ashley Williams Clark, vice president and director of Detroit Future City’s Center for Equity, Engagement and Research.
The city of Detroit last year allocated $1 million in federal pandemic relief aid to help Detroiters resolve tangled titles. That program is in the works and a contract is slated to go to the City Council sometime next month for approval, according to city officials.
Go to bit.ly/DetroitFutureCityReport to read the full report and bit.ly/DetroitFutureCityPrimer for more information on heirs’ properties and how to get help.