Mayor Mike Duggan last week announced that the city’s three-year effort to assess properties based on their market values was, at long last, complete. Standing with the mayor, Detroit’s assessor, Alvin Horhn, said that “for the very first time since I have been here the assessment notices that go out there this week are based on market value.”
Although it seems that this news should be cause for celebration, it is instead highly troublesome.
By law, all taxable properties in the city of Detroit must be assessed on an annual basis by the city’s assessment division. The Michigan Constitution clearly states that a property’s assessed value cannot exceed 50 percent of its “true cash value,” which legislation and decades of case law confirm is synonymous to the property’s market value. My recent study shows that between 2009 and 2015 the majority of homes were assessed at rates that violated the constitution because the city has not been assessing properties based on market value.
In 2009, 65.5 percent of the assessments for properties sold in the prior year violated the state constitution. In subsequent years, the numbers were equally shocking: 2010 (84.7 percent), 2011 (54.6 percent), 2012 (71.4 percent), 2013 (78.2 percent), 2014 (83.2 percent), 2015 (64.7 percent). Not only did assessments violate the constitutional limit, but they did so by a substantial sum.
From 2011-15, the Wayne County treasurer foreclosed upon approximately 1 in 4 Detroit properties for nonpayment of property taxes, and my study suggests that this unprecedented number of tax foreclosures is illegitimate because the majority of tax bills were predicated on unconstitutional assessments.
When the mayor was asked about these unconstitutional assessments during the press conference, he said that he would not consider reimbursements or reparations for tax foreclosures involving unconstitutional assessments because every homeowner had an opportunity to appeal the assessments.
But, studies show that affluent people are more likely to appeal assessments and also more likely to win than poor and minority populations. In fact, Duggan recounted a story of how he fought for multiple years to help his former girlfriend to contest her inflated property assessment. He said that the battle went on so long that by the time they won, he had moved on from that relationship and married his wife, who did not understand why he was still helping his ex-girlfriend.
If Duggan — who has first class legal training and was once a prosecutor — had an uphill battle contesting a property’s inflated assessment, why does he expect average Detroiters to go through the same travails with far less expertise and awareness of their rights? It is the city’s job to assess properties according to the law.
Since the city has now begun assessing properties according to their market values this year, the problem of unconstitutional assessments has hopefully been rectified. That’s the good news.
But Duggan needs to come up with a plan for how to repair the damage that widespread unconstitutional assessments has done prior to this point because Detroit’s tax foreclosure rate is one of the highest any American city has had since the Great Depression.
City administrators must begin a dialogue with Detroiters about how to press forward towards a brighter future while also making amends for the scores of people who have unjustly lost their homes or are about to because the city failed to follow the law and assess properties based on their market values.
Bernadette Atuahene is a law professor at Illinois Institute of Technology’s Chicago-Kent College of Law and a research professor at the American Bar Foundation.