Milwaukee Landlords Engage in Scheme to Collect Rent and Pay No Taxes
By David Epstein, ProPublica
In response to the nation’s devastating financial crisis, Milwaukee put in place policies to help people stay in their homes; for example, giving residents three years to pay property taxes before foreclosing. But in “Landlord Games,” reporters from the Milwaukee Journal Sentinel detailed how, eight years later, unscrupulous Milwaukee landlords are exploiting those policies. What some landlords have figured out is that they can buy a property and collect rent — but not pay taxes — while letting it fall into disrepair. Then three years later, they let the city repossess the property, which erases the tax bill. And then they do it again. And there appears to be scant penalty for shirking upkeep along the way.
As their properties deteriorated, the Journal Sentinel found, the landlords accumulated tens of thousands of dollars in fines for a wide variety of violations. But they were able to pay as little as $100 every few months and get extensions for the fine payments indefinitely. ProPublica reporter David Epstein spoke with Journal Sentinel reporters Cary Spivak and Kevin Crowe about their remarkable investigation.
Some highlights from the conversation:
No Need to Pay At All
Spivak: “We looked at a group of landlords and saw who had ran up a considerable amount of money and fines from the municipal court. We're talking tens of thousands or hundreds of thousands of dollars in fines. They either had ridiculously easy payment plans, such as on a $10,000 fine paying 100 bucks every 60 to 90 days, or some didn't pay it at all because there was very little fear of any action by the authorities.”
One of the Landlords Has a Second Job: Playing in the NBA
Spivak: “We asked around and I was told by a source that, ‘Hey, you know who this is, don't you?’… He said it was the basketball player, the guy from the Bucks. I was like, ‘Okay.’ I had not heard that at all before, and I was like, ‘Which guy again? I can't remember.’ Then he pulled the file and said … It was [Dallas Mavericks guard] Devin Harris.”
Property Sans Taxes
Crowe: “Milwaukee has had it very tough economically. Times are rough for a lot of people here. The mortgage foreclosure crisis was one gut punch and tax foreclosures are another one. There are a lot of people who've been in their homes a long time on fixed incomes who are having trouble paying. The city kind of took this approach to ‘Well, we're going to give you three years. Work with people. Put them on payment plans, those kinds of things.’ That was just another area that these guys could take advantage of and just say, ‘Hey, we get to hold on to our properties for another three years without paying the taxes.’”
To Learn More:
How Milwaukee Landlords Figured Out How to Collect Rent and Not Pay Taxes (by David Epstein, ProPublica)
“Landlords from Hell” Will be Relocating to State Prison (by Ken Broder, AllGov California)
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