It’s a dynamic affecting a significant portion of Detroit’s small, poor population. This fall, the Wayne County treasurer is handing out tax foreclosure notices to 62,000 Detroit properties at least three years behind on paying their property taxes. All told, that’s over $709m in overdue taxes and penalties — a heavy burden for a city in which 38% of residents living below the poverty line.

Of those properties, 37,000 are classified as occupied. With an average of 2.74 people per household, this means around 100,000 Detroiters are at risk of losing the current roof over their head. That is 1 in 7 Detroit residents, this coming season alone.

The end is predictable – and swift. If owners fail to work out payment plans or pay their entire tax burden within five months, their homes end up at auctions. The first one comes in September where properties are sold at a starting bid of the total amount of taxes and liens owed. The houses no one buys end up in the second round at a starting bid of $500.

After over a decade of this system, Detroit has completed 125,000 tax foreclosures, according to the city’s own report.

It’s a different kind of housing crisis. Jerry Goldberg, an attorney with Moratorium NOW!, credits Detroit losing one quarter of its population between 2000 and 2010 as a direct result of both tax and mortgage foreclosures.

Marilyn Mullane, the executive director of Michigan Legal Services, which has been working with Detroiters undergoing foreclosure, says the tax and subprime-foreclosure crises in the city are intimately linked.

One of the things linking them: lack of information. Low-income homeowners are eligible for tax exemptions. While many residents would meet the requirements, they must file requests before their taxes are due, neither of which are readily known pieces of information, Mullane says. Owners can buy their homes back with debts cleared at auction for $500 as a solution of last resort.

The payment plans are unrealistic for many Detroiters already desperately behind on their bills.

“It is very disturbing because most homeowners want to keep their homes. If only the treasurer were willing to take whatever they could pay,” Mullane says.

The changing face of Detroit

The flow of information is unequal – asymmetric, in Wall Street terms — between the often wealthy buyers and the low-income residents who suffer foreclosures. Detroit’s real estate challenges are remaking the city and favoring outsiders.

Last month, 32-year-old Trevor Epps, the chief of staff to a Michigan state representative, opened the door of her home in northwest Detroit to find a tax foreclosure notice.

It was a “frustrating” development, said Epps. Ever since the University of Michigan graduate took over home finances from her 82-year-old grandmother a few years ago, she has been playing catch-up.

When Epps’ grandmother, Leila Timmons, first arrived in Detroit in the 1960s, her family was the only black one on the block. As the city changed over the decades, its population decreasing by a million, its demographics shifting from majority white to majority black, Timmons stayed put. She helped found a block club, participating in weekly meetings to help build a sense of community. She took care of her family, nursing her own parents, her disabled son and raising her two grandchildren after her daughter died.

By the time Epps came to help, there were renovations to be done, expenses to be cut and debts to be paid. Epps says she started making payments towards the owed property taxes, but fell short.

Epps says she is looking into payment plans to address her household debt and avoid foreclosure, but she is also considering throwing the towel in, putting her grandmother in a home and getting herself an apartment – outside of the city.

Epps’ story is also a window into Detroit’s shifting demographics.

The block used to be “vibrant”, Timmons says. Now it is quiet — two thirds of it is empty. Those houses that are still occupied are owned by families like hers, who have been around for decades, with younger and older generations overlapping. Grandfather homes, they are sometimes called in Detroit.

The people buying those homes, however, are not the distinguished Detroit grandfathers. Anecdotally, they are well-funded and relatively young.

Darin McLeskey, a 24-year-old civil and environmental engineer, has been buying properties in Detroit through the tax auction since he was 19. At the time, he thought it might be quite cool to own a city block and wanted a stake in the city’s future. Today he owns five structures, one of which he lives in, and almost forty lots. Some of the lots have had trees planted on them already, he says.

Over the years, he has found that the best properties to buy are those that are still occupied. Two of the structures he owns have been purchased from Detroit residents two years behind on taxes, one year short of tumbling into tax foreclosure.

In the case of one such couple in their sixties who owed $3,000 in taxes and $1,000 in utilities, an offer of $8,000 on their house meant they could pay off their debts and walk away with $4,000, McLeskey says.

These are residents who were planning on moving from the city anyway, McLeskey says.

At the same time, McLeskey says in the last few years, six of his contemporaries who were housemates of his at one point in one of his Detroit properties have now gone on to buy houses of their own around the city.

Land contracts and the ‘punch in the stomach’

So far, the city and the Wayne county treasurer’s office have been largely unsympathetic to the plight of homeowners struggling to pay their taxes.

David Szymanski, Wayne County’s assistant treasurer, says the hardest part of his job is having to foreclose on people who have not paid their bills. Those who cannot afford property taxes should consider renting, he says.

But residents who are not full homeowners are not shielded from the tax foreclosure crisis in the city either. Land contracts – or renting to own – are popular compromises in Detroit, where banks were almost entirely absent for decades.

With land contracts, property owners replace banks and become the effective lender towards whom monthly increments are paid. At the end of a land contract, a property is, in theory, passed from one owner and former landlord to a new owner and former tenant.

Cornelius Washington, a 46-year-old lifelong Detroiter, a single father of four and carpet-layer of 27 years, found out three months ago that the house he had been living in under a land contract had been foreclosed on unbeknownst to him and was about to go up for auction.

Washington suffers from arthritis in both knees and has carpal-tunnel syndrome in his hands as a result of a long career in physical labor. He can only manage to work three days a week, but does not qualify for disability benefits. He keeps three dogs at his house for safety – “the best protection I can get without having to shoot someone.”

Washington signed a land contract two years ago. He agreed to put $2,000 down and pay $400 a month for four years, at the end of which he would become the outright owner of the house. Half way in, Washington had already contributed $12,000 towards the contract, with an additional $10,000 he put towards renovating the house, which was completely gutted – “just a shell” – when he first moved in.

Washington tried to bid and buy his current home in the tax auction last month after all its taxes and liens were cleared in the second round – something few Detroiters are aware they can do – but he was outbid. His budget was $1,400 and his house’s final price tag was $3,000.

When I visit Cornelius Washington in his home, a few days after first speaking to him on the phone, he has received news his house may have been bought by the same man with whom he signed his land contract.

“I feel like I have been punched in the stomach,” Washington says.

The carpet layer says all he has left is prayer and hope. Specifically, he is hoping he can put the $1,400 he had used to bid in the auction to fully buy his house back from its current new owner.

“What else can I do? I know who did this but I am not going to do anything bad. I am not going to go to prison for this. I am not a criminal. The only thing I can do is move forward.”