Detroit — More than half of Detroit’s residential property owners will have lower property tax bills this year, but 41 percent can expect modest increases, city officials said Monday.
The Duggan administration unveiled the proposed 2017 property assessments on the heels of the first parcel-by-parcel reappraisal of the city’s nearly 255,000 residential properties in 60 years.
“It’s been a three-year process, and today we will be sending out the assessment notices and everybody will get an assessment based upon their individual houses,” Mayor Mike Duggan said during a news conference Monday at City Hall. “... Getting the assessment right is something that every homeowner should be entitled to just expect.”
Officials said approximately 140,000 homeowners will see reductions in their taxes of about $263 each. About 12,000 will see an average increase of about $80 each and the remaining 6 percent of property owners will see larger adjustments. Amounts will vary, officials said, since each property was individually assessed, unlike past years.
The massive reappraisal factored in high resolution aerial and street-level images of each home and broke them into 270 neighborhood groups with similar factors. About 94 percent of homeowners will see a change of less than 10 percent in their assessed value, Duggan noted.
In the last three consecutive years, residential assessments for most in Detroit have come down.
For 2016, property tax assessments in the city dipped 5 percent to 15 percent for most residents. Last winter, Duggan said about 95 percent of the city’s residential properties would see a reduction in their properties’ assessed values. The remaining 5 percent of property owners in the city’s downtown and Midtown were to see an increase of 5 percent to 15 percent.
The new assessments also are based on property sales data from Oct. 1, 2014, through Sept. 30, 2016.
The reductions have improved the city’s property tax collection rates, which Duggan said went from 68 percent in the 2014 fiscal year to 79 percent last year. They are projected to be about 82 percent this year, he said.
Property tax revenues, he added, are exceeding projections each year by $10 million-$15 million.
“We keep preparing for property tax revenues to decline, but they keep going up,” Duggan said. “It turns out that when people feel they are being assessed fairly, they pay their taxes.”
Residents should receive notice of the proposed assessments by the end of the month. Tax bills won’t be mailed out until June.
To challenge assessments, the annual Assessors Review appeal process begins Wednesday and continues through Feb. 18 on the eighth floor of the Coleman A. Young Municipal Center.
Doug Dillard, a 30-year resident of the city’s Miller Grove neighborhood in northwest Detroit, said taxes haven’t been going down quickly enough. He hasn’t received this year’s notice, but said he intends to challenge it.
“In Detroit, they’ve been making adjustments, but they are very small adjustments that aren’t even close to reality,” said Dillard, 71, a housing developer. “I want to pay my fair share of taxes because I know that we need the money. The community needs the money, but I don’t want to be overtaxed.”
Meanwhile, Marygrove resident Maggie Williams-Hinton, who attended Monday’s announcement, said she takes pride in the home she’s owned for 50 years and the cost of taxes is worth it.
“Nobody wants to see their property tax go up, but when you feel that the neighborhood is secure and stable, you don’t mind paying an extra $100 or whatever for taxes,” she said. “... They don’t mind doing it if they have a good neighborhood.”
Council President Pro Tem Geore Cushingberry Jr. stressed Monday there are tax exemptions available for residents who earn below the federal poverty line as well as veterans.
Detroit’s citywide reappraisal was initiated in 2014 to bring its assessment role into compliance with the General Property Tax Act to ensure all assessments are at one half of the market value and that the assessment of like properties are uniform.
The reductions in recent years came after homeowners long complained that assessments, which taxes are based on, didn’t match market value, significantly increasing taxes and leading to foreclosures.
Michael J. Steinberg, legal director of the American Civil Liberties Union of Michigan, said efforts to properly assess homes are helpful, but too late for some.
“Foreclosure is based on failure to pay taxes three years back, and while it’s great that the city is complying with state law and now basing taxes on the true cash value of the home, it doesn’t help people who are losing their homes this year for failure to pay taxes three years ago,” he said. He said the ACLU has legal claims pending against Wayne County and Detroit tied to past tax assessments.
Earlier this month, close to 35,000 properties in Wayne County were at risk of foreclosure. Those figures are down about 30 percent from last year, according to Wayne County Treasurer Eric Sabree.
A yearlong investigation by The Detroit News in 2013 found Detroit was over assessing homes by an average of 65 percent, according to a review of state tax appeals. The series prompted state regulators in 2014 to overhaul Detroit’s Assessment Division.
Detroit is still completing reappraisals of the city’s roughly 143,000 commercial and industrial parcels. That review should be done for the 2018 tax year.