DETROIT (AP) — Ann and Oscar Mack had fallen behind on property taxes and knew they faced foreclosure on their home of 20 years. But they didn't know their house on Maiden Street, in a blighted east side Detroit neighborhood, was already listed for auction.
No one "let us know we were about to lose our house," Ann Mack said. "Nobody ever came out and knocked on our door."
The United Community Housing Coalition stepped in and bought the home for $1,000 at a foreclosure auction, then returned the deed to the family. It and other nonprofits are the final options for hundreds of Detroit residents fighting foreclosures, auctions and evictions.
"Complete strangers helped us get our house back," said Ann Mack, 48. "We would have been out in the street."
A decade after the nation's housing bubble peaked before bursting in a ruinous crash, much of America's residential real estate has rebounded. Many owners have enjoyed rising equity and lower housing bills as mortgage rates have sunk. Yet Detroit is a glaring exception. Despite efforts by the mayor's office, lenders and community groups, home values remain depressingly low.
A big reason has been oppressively low incomes in the city. Even as home prices have dropped, too few can afford to buy. Only a sliver of the population — better-paid and relatively new residents moving into downtown-area condos, apartments and rehabbed Victorian-style homes — has been able to capitalize on modest purchase prices. Most of the rest have been thwarted by stagnant incomes.
Nearly 40 percent of residents are impoverished, compared with about 15 percent of Americans overall. Detroit's median household income was about $28,100 the year before the housing collapse. It's since shrunk to $26,095 — not even half the median for the nation, according to the Census.
Contrast that with the gains some other cities have experienced. The median household income in San Francisco rose from $68,000 in 2007 to about $78,000 by 2014. Seattle's climbed from $58,000 to over $67,000, Pittsburgh's from $32,300 to $40,000.
"Like most pre-crash markets, the Detroit housing market was very strong," said Douglass Diggs, chief executive of The Diggs Group Heritage economic development consulting firm and former Detroit Planning and Development director.
"There were plans for approximately 7,000 new housing units," Diggs said. "There was a strong demand for existing for-sale housing in our stronger neighborhoods."
Much of that dried up after 2008 in the aftermath of the housing bust. Even Dave Bing — a pro basketball Hall of Famer, businessman and future mayor — put off plans for a $60 million riverfront residential development because banks were slow to release construction funds.
A 60-year population dive in which Detroit lost 1.1 million residents appears to be slowing. But the exodus has left portions of the city abandoned and desolate, even with nearly 700,000 residents remaining.
On many blocks where lived-in homes once stood, vacant houses and lots abound. A task force survey in 2014 found that 40,000 vacant structures needed demolition. Under Mayor Mike Duggan blight eradication plan, the city has torn down more than 10,000 houses and other structures in 2½ years.
"But we still have 30,000 to go," Duggan told reporters recently. "The magnitude of the blight problem in this city is enormous."
The task force survey also concluded that 38,000 additional houses were in such poor shape that they were edging toward blight. The value of the city's owner-occupied housing stock also plunged from about $88,000 in 2005 to $45,000.
"Leading up to the collapse, we saw a huge increase in property values, which made it harder for low-income people to buy or rent," said Ted Phillips, United Community Housing Coalition director. "There are a lot of stories — and they are true — of people getting mortgages that they did not qualify for based on doctored income statements, bad appraisals."
Many homeowners have said the assessment of their properties haven't dropped enough to keep pace with the lower home values. Assessed values help set tax rates.
The American Civil Liberties Union of Michigan and National Association for the Advancement of Colored People have sued to bar a county auction of tax-foreclosed homes in Detroit and Wayne County. About 90 percent of the 15,170 county properties in foreclosure from the 2013 tax year are in Detroit. Many are vacant lots or empty houses. The lawsuit contends that properties were over-assessed by the city, making it hard for the owners to make tax payments.
City and county officials got the state legislature in recent years to permit the Wayne County treasurer's office to offer payment plans to homeowners in foreclosure. That allowed about 27,000 Detroiters who were in foreclosure a year ago to stay in their homes, said Melvin Hollowell, Detroit's corporation counsel.
The city has said that residential property tax assessments have been cut each year since 2008.
Online auction bids on city-owned houses needing work start as low as $500. But even shabby often is out of reach.
"They can't afford the living arrangements," said Ishmail Terry, director of operations for the Detroit Non-Profit Housing Corp. "We get calls from families who have seven kids and are struggling to keep the lights on and the gas on. They are trying to pay the taxes, and they're behind three years."
Earlier this year, about 30,000 residential and commercial water customers were on payment plans. An additional 20,000 faced shutoffs after defaulting on agreements to pay overdue bills.
Entire neighborhoods are filled with poor people, according to a 2015 report on segregation by The Century Foundation. The New York City-based think tank said Detroit had 184 high-poverty census tracks by the end of 2013, compared with just 51 in 2000.
About 50,000 city households had annual incomes under $10,000. An additional 28,000 earned between $10,000 and $15,000, while fewer than 2,000 households had incomes topping $200,000.
The number of jobs in the city rose by more than 6,000 between December and May, according to Duggan's office. But of the nearly 540,000 residents 16 or older, only about 210,000 had jobs, according to 2014 Census data.
Ann Mack is a cashier at a big box retail store, but her 48-year-old husband was laid off years ago from a property maintenance job and still is without steady work.
Though they bought their small bungalow for about $52,000, it's now worth only $11,000, Ann Mack said, adding that "a lot of people can't really afford to move and pay another mortgage."
They depend on her to pay off the property taxes on the house. They were able to cobble together a few hundred dollars in 2014 to add to money fundraised by the United Community Housing Coalition to buy their home at auction.
"We bid for them at the auction," Phillips said of the Macks. "They were short having enough to buy by a few hundred dollars. We paid for them. They paid us back, and we deeded them the home."
He called the Macks' situation "pretty typical" and said the nonprofit bought about 360 other homes that way.
"We have purchased over 2,000 homes in the last six years," Phillips said. "Most of these have been in the tax-foreclosure auctions. Our average price has been about $1,200."