Economic Condition Factor (ECF)

Michigan law requires using an economic condition factor (ECF) or neighborhood in the valuation process. An ECF takes the cost approach from the Assessor Manual and modifies those values to the local market. This ensures that every assessor in Michigan values property the same way. The ECF is used to distinguish the different markets in Michigan. Both building type and geographic location are used for residential properties. Similar properties in similar neighborhoods are compared to determine value. A bungalow would never be compared to a two-family flat, nor would a residential property on the west side be compared to a similar property on the east side. Commercial and Industrial properties also use an ECF based on the property type. However, the only geographic distinction Detroit uses for its commercial and industrial properties is between Downtown Detroit and the rest of the city.