A Torturous Tap: Water Shutoffs and Home Foreclosures

by Michele Oberholtzer

The dual issues of water shut-offs and tax foreclosure are well known causes of individual and collective harm. In both cases, bills are inflated beyond reasonable or affordable levels. In both cases, those high bills can lead to people living without the basic human rights of water and shelter. In both cases, the result is often “passive eviction,” wherein people move out not because they were overtly forced out, but because their home is no longer habitable. Even the numbers are similar: as of this spring, another 17,000 Detroit families face water shut-off and that same number of occupied homes are at risk of tax foreclosure.

 

It is fairly common knowledge that an unpaid water bill can become a lien on a home that can contribute to tax foreclosure and the loss of ownership. What’s not as commonly known is that tax foreclosure often contributes to water shut-offs. A recent policy by Detroit Water and Sewerage Department (DWSD) is making it impossible for residents of tax-foreclosed homes to get water on, or forcing them to take on debts that were never their responsibility.

 

For years, DWSD has been moving away from “Resident” bills to bills in a person’s name. Resident bills are issued to whoever lives in the home, but are ultimately the responsibility of the owner, whereas a bill in a person’s name is personal debt that DWSD can pursue against that individual even if they leave the address. DWSD uses water shut-offs as an opportunity to require a resident to put the account in their name, which often means assuming any existing debt on the account as their responsibility.  To shift from a Resident account to an individual account, a person must show their lease or a deed, proving that they have a right to live in that home. For foreclosed properties, the Wayne County Treasurer is technically the owner from April 1 through the end of the year, when it transfers title to auction buyers (November in most cases). In the meantime, residents don’t have the paperwork they need to satisfy DWSD’s policy.

 

The policy is unnecessary because a person assumes responsibility when they put the account in their name. It’s burdensome because it is not legally necessary to have a written lease or deed to occupy a property. It’s harmful because there are literally thousands of homes owned by the government, for which there are no leases or deeds. The upshot is that if you happen to live in one of the 17,000 occupied homes in tax foreclosure or you happen to be in one of the 17,000 homes facing water shut-off, you may have no legal means of getting your water back on for many months.

 

There is much to hate about tax foreclosure, but for all its harms, the silver lining is that it clears away liens like taxes and water bills. The truth is that water bills are subject to be waived by tax foreclosure, so why are thousands of tax-foreclosed homes having their water shut off? DWSD doesn’t adjust the water bill for a foreclosed property when it is foreclosed April 1.  Rather, it waits until Wayne County Treasurer deeds over the property to a new owner. That’s often too late for the people suffering in those homes under a dry tap.

 

Under this process, the person who reaps the benefit of that write-off will be the new owner, not the person who lives there. Residents face a terrible catch: you can’t get water until you own the property, and you can’t own it unless you run the gauntlet of the auction and survive for months without water.

 

The problem is not limited to tax foreclosure.  Many thousands of occupied homes are owned by the Detroit Land Bank Authority (DBLA). DLBA eventually addressed this problem by issuing special letters to residents in their “buy back” program, to allow them to have water access while they are in the process of buying back their homes. Unfortunately, this is limited to a few hundred people in the program, not to the many thousands who live in DLBA houses or those who have already been driven out due to lack of water.

 

In response to pressure from advocates, DWSD has agreed to accept letters produced by the Wayne County Treasurer, similar to those issued by DLBA, in lieu of a lease or deed. Wayne County Treasurer writes these upon request by advocates, and, presumably, residents can take these letters to DWSD and create an account in their name. Under this policy, residents in tax-foreclosed homes should be able to get water on in their name with a clean slate. (If a bill is already in a person’s name, it will remain their responsibility.)

 

The letter is absurd as a solution given that DWSD has full knowledge of which properties are in tax foreclosure or are owned by the DLBA.  This information is public data. The letter “solution” creates yet another series of hurdles to jump through for those who have already suffered immeasurably through the combined traumas of housing and water instability.  Most residents who need it have no idea that such a letter even exists.

 

Even for those individuals who have this letter, the fight is far from over. As recently as May of 2018, a resident of a foreclosed home with a water letter from WCT was told her only option to avoid water shutoff was to assume the debt of the former owner. She agreed to pay $280 per month in addition to her monthly usage because she was under duress and had no other means of avoiding the shut-off for her and her grandchild. For this to happen even under the persistent watch of advocates essentially means that hers is a best-case scenario.

 

The solution? A moratorium on shutoffs for tax-foreclosed properties and/or an automatic waiver of ongoing water charges at the time of the foreclosure, not at the time of the sale.

 

In 2014, Detroit shocked the nation with 33,000 water shutoffs and nearly 24,000 tax foreclosures.  Public awareness of these issues and public outcry against them have died down, but these violations continue, and are no less inhumane now than they were then.

 

What Detroit lacks in traditional forms of wealth, it makes up for in vast resources of land and freshwater. Yet the resources we have in greatest abundance are the same ones that our government has taken as collateral for a fraudulently derived debt.  DWSD needs to wake up to the reality of the many thousands of Detroit homes that don’t fit into the convenient box of “owner” or “renter,” and provide a way to allow residents of government-owned homes to have access to water. They should regularly update records of government-owned and tax-foreclosed properties, they should allow water access to those willing to pay, and they should facilitate the transition of those properties into private ownership.  In the meantime, irreversible water shutoffs continue to plague thousands of families in post-bankruptcy Detroit.

 

 

Michele Oberholtzer is the Director of the Tax Foreclosure Prevention Project for United Community Housing Coalition. She in an environmentalist, a graduate of UofM’s College of Engineering, the founder of The Tricycle Collective, a writer, and singer. She is currently a candidate for State Representative in Michigan’s 4th District. More writing at www.oberdoit.com.

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