Homeowners Left Homeless: Shelby County tax sales disproportionately affect poor, Black owners during pandemic

Published: Sep. 19, 2022 at 5:47 PM CDT
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MEMPHIS, Tenn. (WMC) - The Action News 5 Investigators are revealing a pandemic problem -- one that cost many Mid-Southerners their homes.

During the COVID-19 pandemic, the federal government stopped evictions and foreclosures allowing millions of Americans to stay in their homes despite falling behind on payments.

That was not the case, however, for property owners who fell behind on their taxes.

In Shelby County alone 1,700 owners saw their properties hit the auction block – because they were behind on their tax bills.

And as Jessica Jaglois reports, in a new partnership with the University of Memphis Institute for Public Service Reporting, those impacted most were some of our most vulnerable neighbors.

Denise Thomas and Jack Mitchell purchased their first home together more than fifteen years ago on Harris Avenue, a stone’s throw away from the historic Orange Mound neighborhood, which was one of the first subdivisions planned specifically for African Americans who, in part, saw home ownership as a platform to build wealth.

“What did home ownership mean to you?” asked The Investigators.

“It meant stability in old age,” said Thomas. “Being able to be somewhere where I can say ‘this is mine’. Where I wouldn’t have to stay with any of the children or stay with other family members or friends. This is mine.”

What was hers now belongs to someone else after health struggles and job losses caused the 60-year-old housekeeper and 71-year-old Vietnam veteran to fall behind on their property taxes.

“I just didn’t have the money. Point blank period. I did not have the money.”

Thomas lost her home in a tax sale in November 2020. It was auctioned off by the Shelby County government and sold to the highest bidder to recoup her unpaid property taxes.

“I’m not the only one. This is all over the nation, I believe.”

Thomas is right. Tax sales didn’t stop during the pandemic including in New Orleans, St. Louis and Shelby County to name a few.

Court documents and property records show nearly 1,700 properties were sold in Shelby County tax sales between August 2020 and February 2021 while the federal eviction and foreclosure moratoriums were in place.

“I think it’s unfair and unfortunate,” said Archie Robinson, who lost his house in a pandemic tax sale.

Robinson inherited his childhood home from his mother who was behind on the property taxes when he moved in. As a stroke survivor on disability, he says he paid what he could but it wasn’t enough.

Last year, while Robinson was sick and bedridden, his fiancé says a sheriff’s deputy came to their door with an eviction notice.

“The doorbell rung, I went to the door and she gave me the paperwork saying we had to leave because the house was sold,” said Donna Pruitt. “Archie wasn’t able to come because he was in the bed, he was already sick, and it was very surprising.”

Robinson asked family and friends for the nearly $9,000 he needed to redeem his property and buy it back.

“I was talking to him saying how many people actually lost they houses are out here on the streets?” Asked Pruitt. “And it happened during this time. Where they going to get their help at?”

That’s the problem with tax sales, according to Andrew Kahrl, a professor of History and African American studies at the University of Virginia. He said most homeowners who live in their homes and lose them in tax sales can’t afford the taxes and says tax sales disproportionately affect the elderly, low-income and African American homeowners.

“The way that local governments conduct tax sales is being done in a discriminatory manner that often targets certain homeowners and certain neighborhoods over others,” said Kahrl.

In an analysis done by Action News 5 and the Institute for Public Service Reporting, we created a map that shows the neighborhoods in Memphis with the largest concentrations of tax sale properties. These neighborhoods are majority African American and nearly 40% live below the federal poverty line.

A heat map shows the area with the highest pandemic tax sales
A heat map shows the area with the highest pandemic tax sales(Action News 5)

Kahrl believes Shelby County should have paused tax sales in 2020 like D.C., Detroit, Chicago and New York.

Shelby County Trustee Regina Newman, who is responsible for scheduling tax sales, moved from April 2020 to August. She said over the phone she didn’t want to add to peoples’ burdens at the time and there would be a “bad perception” of putting people out of their houses while they’re supposed to stay in them.

“Postponing a tax sale for a couple of months doesn’t really do anything to address the underlying problems,” said Kahrl.

Kahrl wants cities and counties to treat owner-occupied properties differently than vacant ones.

Washington and Baltimore have taken steps to protect owner-occupied homes from tax sales and did not include those properties when they resumed their tax sales in 2021 and 2022.

How did they do it? Baltimore identified owner-occupied homes by checking the index of Maryland’s Homestead Tax Credit, which offers tax breaks to people living in their principal residences. Similarly, officials in Washington consult a database for that city’s Homestead Deduction, which also offers tax breaks to owner-occupied households. The method doesn’t identify all owner-occupied homes, officials said, but it can help save many from tax foreclosure.

We wanted to speak with Trustee Newman about this option but she denied our requests for an on-camera interview. She did say over the phone that her office does not “go look at houses.”

Jack Turner, a former attorney from her office isn’t sure that the law would let the trustee differentiate between vacant and occupied homes.

“They have an obligation to sell property for which the taxes have not been paid and I think the reason why the law was written the way it is is because you didn’t want a tax assessor playing favorites,” he said. “Forgiving some debts or going easy on someone who was a political contributor or a crony or a friend.”

Owners like Thomas and Mitchell want to see Shelby County explore any type of solution that can better help people like them keep their homes. With the couple’s house sold, they now live in a rental that gobbles up nearly their entire monthly income.

“I’m worried about making sure that I have somewhere to live. A roof over my head. That’s what’s important - keeping a roof over my head. At 61 years old and not having to sleep out there in the park or in the shelter.”

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