Fixing titles opens doors for Black homeowners

Key Takeaways

They paid for their houses. They maintained the homes for years. But decades later, the shaky financial foundations borne out of necessity started to betray dozens of families of color in Washtenaw County, Mich.

As the county treasurer’s office worked through delinquent tax properties, they saw families fighting financially with both hands tied behind their backs. They couldn’t claim a principal residence exemption. They were unable to apply for a homestead tax credit. They were ineligible for conventional financing because they couldn’t prove they owned the property.

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McClary and attorney Teresa Killeen are willing to do technical assistance with any county in the United States. McClary can be reached at taxes@washtenaw.org.

“When we dug a little deeper, we found the properties were in the name of an estate, or the name of grandma and grandpa,” said Treasurer Catherine McClary. “The property had oftentimes been purchased during segregation when Black families would have a white family ‘front’ for them and buy it informally.

The properties were passed along from generation to generation, informally without going through probate, because there was some distrust of government and the courts.” 

But those arrangements amounted to a house of cards for their descendants. 

“Just having access to home ownership programs can make a huge difference in the amount of financial assistance available to these families that most homeowners have taken for granted,” McClary said. “That’s in addition to the generational wealth that real estate allows families to pass down.”

McClary’s office started a pilot project in 2018 that she called Home for Generations, which partnered with the probate judge to determine ownership and execute a “quiet title” to establish legal ownership. That involved recruiting pro bono attorneys and a probate judge, who would waive fees, along with some funding from the Board of Commissioners to pay the fees the state could not waive.

The COVID-19 pandemic froze operations temporarily, but since the program’s inception, Washtenaw County has closed 23 cases, is in the process of handling 21 more cases and for a total of roughly $2,000, transferred $3.3 million of real estate to families.

“This was a legacy of slavery,” McClary said. “The racial wealth gap that really has resulted from laws in our country like when the Federal Housing Administration was created to guarantee bank loans, but only for whites, so these guarantees locked Black families out of access to home ownership unless they did it informally.”

A 2021 Pew Charitable Trusts study in Philadelphia found that 10,407 “tangled titles,” affected 2% of the city’s 509,258 residential properties. 

Informalities work well enough until the parties change over time. Two cases illustrate how complicated arrangements had gotten for Washtenaw County families.

When a woman died, her common law husband anticipated inheriting the house. The house was governed by two trusts held by her divorced parents. The attorney in that case went back to both of the trusts to parse out who the next legal owner was — a nephew who lived in the next town. Complicating it even more, Michigan does not recognize common law marriages. Through mediation, the nephew agreed to a “cash for keys” agreement, paying the husband for moving out of the house.

In another complicated case involved a woman whose mother died and whose stepfather moved out of state to another property owned jointly by the mother and stepfather. The attorney got the stepfather to agree to a release of the Washtenaw County property in exchange for a release from the daughter of all the other holdings in the other state, releasing her to become the sole owner. 

It's as easy as tossing a ball out a window, banking it off a moving truck into another car’s open window. So far, 30 Washtenaw County attorneys have worked pro bono on cases, and McClary said the relationship that counties maintain with attorneys is crucial to containing costs. The Pew study found that without subsidized legal counsel, fee waivers or other public assistance, the cost of remedying a tangled title can be significant: About $9,200 for a home valued at the median of $88,800.

Elsewhere in Michigan, Calhoun, Genesee and Wayne counties have moved to start their own Home for Generations programs. Genesee County has closed three properties and Calhoun County, with the aid of its land bank, has closed one property. McClary said other large counties in the state have expressed interest in their own programs.