Detroit residential assessments increase 8% in 2021 Property taxes go up only 2%; 4th straight year of rising property values across city
- 189 out of 194 residential neighborhoods saw value increase compared to 2020
- Property owners can appeal assessments until February 22
Residential property assessments in Detroit are projected to increase by an average of over 8% in 2021 tax, based on the most recent analysis of property values across the city, Mayor Mike Duggan said today. The numbers, which are based on two years of actual market sales, mark the fourth consecutive year of growth across the city.
However, while property values in the city have increased steadily, homeowners are protected against large property tax increases. Under state law, the annual increase in property taxes is capped this year at 2%, as long as ownership has not changed. When a home sells, the cap is lifted and the taxable amount adjusts to the State Equalized Value the year following the transfer.
“189 out of 194 neighborhoods in the city saw their property values rise,” said Mayor Duggan. “Our homeowners are building wealth without significant tax increases.”
Just yesterday, S&P Global Ratings announced that it had moved the City from a negative to a stable outlook based in part on the success of the city’s neighborhood revitalization strategy.
Huge shift from 2014-2020
According to Detroit Assessor Alvin Horhn, when Detroit was in bankruptcy in 2014, the city’s residential values were in a tailspin and had lost an estimated $3 billion in value in the great recession. “We cut residential assessments by 20% in early 2014 and cut them further in 2015,” Horhn said. “Now property values are rising much faster than taxable value because of the state’s inflation cap.”
In 2019 assessments, the city’s class of residential properties gained about $400 million in value compared to the year before. In the 2020 proposed assessments, the residential property class grew by over $775 million, bringing the city’s gain in residential value over those two years to more than $1 billion, a 39% increase in residential property value over two years. This year residential values are projected to grow an additional $368 million over the prior year.
“This strong property value growth provides greater stability not only in our neighborhoods but also for city’s economy and revenues,” said Acting Chief Financial Officer, Jay Rising.
Market sales determine assessed value
To determine this year’s assessment, the city examined two years of actual market sales. This year that included 62,355 transfers of all types, including market sales, quite claim deeds, and land contracts. The Office of the Assessor reviews aerial and street level imagery of properties to determine property characteristics as part of the valuation process.
Here is a breakdown of this year’s assessed residential value changes across the city’s 194 neighborhoods:
- 7 out of 194 neighborhoods (4%) had an increase in value over 15%
- 53 out of 194 neighborhoods (27%) had an increase in value ranging from 10% to 15%
- 111 out of 194 neighborhoods (57%) had an increase in value ranging from 5% to 10%
- 18 out of 194 neighborhoods (9%) had an increase in value ranging from 1 to 5%
- 5 out of 194 neighborhoods (3%) had a decrease in value in the range of (2.51%) to (6.89%)
Proposed Assessment Notices being mailed this next week
Notices will be mailed beginning next week, January 25, 2021 to the city’s 399,091 residential, commercial, industrial, and personal property owners, advising them of their proposed assessments for 2021. These are not tax bills. Actual bills will be mailed out at the end of June and November.
Deadline for assessment appeals extended
Under State law, property owners have the right to appeal the proposed changes. The proposed 2021 Assessments are tentative until the completion of the local review period in March and any possible changes from the Wayne County Equalization in April.
Residents will have three weeks to appeal all assessments, an extended deadline of the normal two-week timeframe. The Assessors Review appeal process will take place between February 1st and February 22nd in Room 804 of the Coleman A. Young Municipal Center, 2 Woodward Ave., Detroit, MI, during this timeframe the office will remain open on Saturdays. The March Board of Review, the second step in the review process, begins March 2rd and ends March 25th in Room 1208 of the Coleman A. Young Municipal Center. Anyone with questions or wishing to challenge their assessments can email the Assessor’s office at [email protected].
Residential Property Owners must begin the appeals process at the Assessors Review. Commercial, Industrial, and Personal Property owners may, if they chose, proceed directly to the Michigan Tax Tribunal. The deadline to appeal directly to the Michigan Tax Tribunal is May 31st.