Residential property values rise 12% in 2018; most Detroiters to see only 1% tax increase
- 90% of Detroit neighborhoods see increased values
- Increase in value across all classes of property up nearly 25%
- Proposed residential assessment changes to be mailed out this week
Residential property values in 2018 rose across more than 90% of Detroit’s nearly 200 neighborhoods, a sign that revitalization efforts are impacting more areas of the city, Mayor Mike Duggan announced today. Citywide, the average increase in residential value was 12%, with several neighborhoods seeing gains of more than 20%, according to data released today by the City Assessor’s Office as part of its annual proposed property assessment changes.
While property values have increases sharply, property taxes for most will not. Under state law, the annual increase in property taxes is capped at 1.02%. That cap is lifted only when a property transfers. At that time, the taxable amount will adjust to the State Equalized Value the year following the transfer.
The new values are based on two years of market data, which included nearly 11,000 valid arms-length transactions, a 16% increase in activity from the last year’s assessment.
“These new numbers represent a historic shift for our neighborhoods, which for nearly two decades had seen only a decline in home values,” said Mayor Duggan. “This shows that the work we are doing to remove blight, improve parks and revitalize commercial districts in our neighborhoods is paying off.”
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According to the Assessor’s data, in 2018 the city’s class of residential properties gained more than $400 million in value compared to the year before. This marks the second consecutive year the city’s residential property values have increased. Last year, the city announced a more modest increase of 5% citywide. Prior to that, residential property values in the city had dropped annually for 17 years, including a nearly $1 billion drop from 2013 to 2014.
Here is a breakdown of this year’s assessed residential value changes across the city’s 194 neighborhoods:
- 52 out of 194 neighborhoods (27%) had an increase in value in the range of 1% to 10%.
- 100 out of 194 neighborhoods (52%) had an increase in value in the range of 10% to 20%.
- 24 out of 194 neighborhoods (12%) had an increase in value in the range of 20% to 40%.
- 2 out of 194 neighborhoods (1%) had an increase in value above 40%. The Midtown and Brush park areas had large increases due to the transition in use and new construction.
- 16 out of 194 neighborhoods (8%) had a decrease in value in the range of -1% to -15%.
Commercial Property Values up 35%
Meanwhile, the city’s commercial properties saw a major upward readjustment based on a recently completed citywide reappraisal. The reappraisal – the first on commercial properties in decades – showed a 35% increase in value citywide, bringing the assessed value for all commercial properties up from $2.96 billion to more than $4.5 billion. While most of the value growth occurred in the city’s core, commercial properties across the city saw significant increases in their value.
“This sends a clear message that Detroit is a good investment,” said Mayor Duggan. “There is a great deal of activity taking place in our neighborhood commercial districts and we expect these values to continue to rise.”
Interim Chief Financial Officer Dave Massaron pointed out that while there are far more residential properties in the city, it is the commercial and industrial classes of property that contribute the largest share of the city’s property tax revenue annually.
Proposed Assessment Notices being mailed this week
Notices are being mailed out this week to the city’s 270,000 residential and industrial property owners, advising them of their proposed assessments for 2019. These are not tax bills. Actual bills will be mailed out in July and payments are due August 15th. Commercial Property Owners, due to the completion of the commercial reappraisal, will receive their notice later.
How to appeal your propose assessment
All property owners have the right under state law to appeal their proposed assessment. Additionally, the City of Detroit offers property owners an informal opportunity to appeal their property value. The Assessors Review appeal process will take place between February 1th and February 15th in Room 804 of the Coleman A. Young Municipal Center, 2 Woodward Ave., Detroit, MI. The March Board of Review, the second step in the review process, begins March 6th and ends March 23rd 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 31.
Help Available
The City of Detroit is taking a proactive approach to helping homeowners avoid the threat of tax foreclosure. The Assessor’s Office will be mailing applications for the Homeowners Property Tax Assistance Program to all Detroiters who are delinquent on their 2018 property taxes to determine whether they qualify for tax relief.
Detroit’s property tax exemption for low-income households can reduce or eliminate property taxes on homes, depending on the occupants’ income levels and the number of people living in the home.
Homeowners who have questions about the Homeowners Property Tax Assistance Program or wish to receive an application may call the Office of the Assessor at 313-224-3035 or the Detroit Board of Review at 313-628-0723. The application also is available on the City’s website.