Detroit Property Tax Highest In The Nation......

**softailrider** · May-29-15, 05:14 PM

Originally Posted by ndavies

The problem is Detroit is not competing against your town. It is competing against it's suburbs. We are trying to get Detroit to grow once again. The only way to do that is to make it competitive with it's own suburbs. It charges twice as much tax as it's surrounding neighbors and can't offer anything close to equivalent services.

Most middle class families are not going to move into Detroit with it's high taxes, crappy schools, crappy fire/police, terrible housing stock and lack of jobs. They'll buy a place in the suburbs that offers better versions of all of those things.

Key word in that last paragraph is families. I wonder how long the hipsters that are moving into certain areas will stay after they have children.

**Ray1936** · May-29-15, 05:17 PM

Don't matter. Bankruptcy II is coming, and it's gonna be a killer. Bye bye, DIA.

**ndavies** · May-29-15, 09:49 PM

Why is the city leasing the surplus residential lots and not selling them?

Why not give the lots away with the filing for a building permit?

They could post the list of available lots online. A prospective resident could choose a lot. The resident would file a building permit application. The transfer of the property to the owner would happen at the projects closing. The transfer would be complete when all the permits are signed off and the new Home received it's certificate of occupancy.

They'd have control over what gets built. Not much extra workload would be added to the city. Already The building department has to review and approve every house. Any extra work and employees needed here could be paid for with the appropriate permit filing fees. With added volume and modern technology you could streamline the permitting process while adding workers.

You need to have lots in a variety of neighborhoods. You'd want historic and non historic districts. Narrow city lots and larger inner ring style suburban type lots.

I'm sure you'd be able to pool a group of those new downtown workers to build a block together.
And if anyone from the city wants to implement this I'll be the first on the list. I even have plans for a house I was going to build several years ago.

**softailrider** · May-29-15, 11:07 PM

Talked to a guy today who lives on Muirland North of 7 Mile. As you all are aware that is an absolutely beautiful area. He said new buyers in that neighborhood have property taxes around 20000.00 a year. That's a lot of money when you consider the school system [[and other services) suck.

**Cincinnati_Kid** · May-30-15, 02:44 PM

Originally Posted by softailrider

Talked to a guy today who lives on Muirland North of 7 Mile. As you all are aware that is an absolutely beautiful area. He said new buyers in that neighborhood have property taxes around 20000.00 a year. That's a lot of money when you consider the school system [[and other services) suck.

Yeah, buying a house in certain areas of Detroit is relatively cheap, but it's the other things that increase [[car insurance, car theft, home owners insurance, taxes, crime and potential home invasions etc..) which pretty much balances everything out, to the point it's not such a deal after all.

**mwilbert** · May-30-15, 04:10 PM

Originally Posted by softailrider

Talked to a guy today who lives on Muirland North of 7 Mile. As you all are aware that is an absolutely beautiful area. He said new buyers in that neighborhood have property taxes around 20000.00 a year. That's a lot of money when you consider the school system [[and other services) suck.

I don't know what everybody pays in taxes in the University District, but if they are paying that much they should be appealing. I haven't seen any sales over $200K in the past 8-9 years, although there are some higher asks. Even if you aren't homesteaded, which normally you would be, you still shouldn't be paying more than 10K/year.

**softailrider** · May-30-15, 04:45 PM

Originally Posted by mwilbert

I don't know what everybody pays in taxes in the University District, but if they are paying that much they should be appealing. I haven't seen any sales over $200K in the past 8-9 years, although there are some higher asks. Even if you aren't homesteaded, which normally you would be, you still shouldn't be paying more than 10K/year.

Just repeating what that guy [[ who lives right there ) told me. He ought to know, And he had no reason to tell me something that wasn't true.

**Vic01** · May-30-15, 11:46 PM

Originally Posted by softailrider

Talked to a guy today who lives on Muirland North of 7 Mile. As you all are aware that is an absolutely beautiful area. He said new buyers in that neighborhood have property taxes around 20000.00 a year. That's a lot of money when you consider the school system [[and other services) suck.

It could be that the guy you talked to is just a bit off... on the Realtor.com map now and Muirland stops at 7 Mile, there is no "North of 7 Mile".

Here's 18994 Muirland [[4 or 5 houses d [[4 or 5 houses South of 7 Mile) 2014 yearly taxes $4544. assessment $49,099

A couple of the closest "North of 7 Mile" across from Muirland
19210 Kingston [[sold Jan. 2015 for $190k, sounds like a "new buyer") total 2014 yearly taxes $4964. assessment $67,988.
I'll agree that if his $4964. jumps up to $20,000 yearly taxes somethings seriously wrong.

19444 Stratford [[currently listed for sale $225,000) total 2014 yearly taxes $4360. assessment $59301. Yes on the "Homestead".

**softailrider** · May-31-15, 08:18 AM

Originally Posted by Vic01

It could be that the guy you talked to is just a bit off... on the Realtor.com map now and Muirland stops at 7 Mile, there is no "North of 7 Mile".

Here's 18994 Muirland [[4 or 5 houses d [[4 or 5 houses South of 7 Mile) 2014 yearly taxes $4544. assessment $49,099

A couple of the closest "North of 7 Mile" across from Muirland
19210 Kingston [[sold Jan. 2015 for $190k, sounds like a "new buyer") total 2014 yearly taxes $4964. assessment $67,988.
I'll agree that if his $4964. jumps up to $20,000 yearly taxes somethings seriously wrong.

19444 Stratford [[currently listed for sale $225,000) total 2014 yearly taxes $4360. assessment $59301. Yes on the "Homestead".

You're absolutely right, this guy said he lived near Margareta which I thought was North of Seven but its actually at 18500 which is very much South of Seven Mile Rd. North of Seven would start around the 19000 block.

**Scottathew** · May-31-15, 08:32 AM

Originally Posted by softailrider

North of Seven would start around the 19000 block.

[[Address - 5000) / 2000 = Mile Road

[[Mile road * 2000) + 5000 = Address

Source: Former DHL deliveryman

**ABetterDetroit** · June-01-15, 11:54 AM

The high property tax rate has successfuly killed any new high rise condos from getting built in this boom. Their adding apartments buy the scores but new condos like someone else pointed out without the NEZ ...none. It a shame because there is nothing but a lot of empty places to put some right now. Upscale condos bring in a lot of disposable income and tax revenue if you haven't taxed them right out of the market like Detroit has.

**Bham1982** · June-01-15, 12:18 PM

Originally Posted by ABetterDetroit

The high property tax rate has successfuly killed any new high rise condos from getting built in this boom.

Given that previously built high rise condos were all tax abated, I don't see how property taxes play any role in the [[non) development of multifamily for-sale real estate. The sucker taxpayers are paying the goods.

Originally Posted by ABetterDetroit

Their adding apartments buy the scores but new condos like someone else pointed out without the NEZ ...none.

Yeah, they're building like it's Dubai or something. Per the Census a whole 20 units of housing have been permitted in Detroit in 2015.

http://censtats.census.gov/cgi-bin/bldgprmt/bldgdisp.pl

**ABetterDetroit** · June-01-15, 01:23 PM

Originally Posted by Bham1982

Given that previously built high rise condos were all tax abated, I don't see how property taxes play any role in the [[non) development of multifamily for-sale real estate. The sucker taxpayers are paying the goods.

Yeah, they're building like it's Dubai or something. Per the Census a whole 20 units of housing have been permitted in Detroit in 2015.

http://censtats.census.gov/cgi-bin/bldgprmt/bldgdisp.pl

That's the point, without the tax breaks the property tax rates are to damn high.

A 400k residential new construction in Detroit the property tax would be $13,688 WITH the homestead rate. A developer and a buyer see that as a huge problem.

https://treas-secure.state.mi.us/pte...TEstimator.asp

We all know your a hater Bham and obviously you do that from afar because midtown and downtown are under remodel construction right now at a unprecedented rate that hasn't happened in many decades in this city. Denying it at this point just proves what you are.

**Bham1982** · June-01-15, 03:12 PM

Originally Posted by ABetterDetroit

That's the point, without the tax breaks the property tax rates are to damn high.

New construction doesn't pay full taxes. So your supposition that high rise towers aren't popping up everywhere because potential homeowners don't want to pay high property taxes is nonsensical. Downtown condo owners pay low property taxes. You'll pay less in property taxes on a Harbortown condo then on a suburban home.

It doesn't even make sense if their taxes were high. It isn't like high tax jurisdictions lack new housing construction as some general rule, and the mortgage costs would be the same either way, as the purchase price would adjust [[downward) according to the [[higher) tax burden.

And if there really were demand for such housing, yet some irrational fear of property taxes among potential residents, then why wouldn't rental buildings be popping up?

**ABetterDetroit** · June-01-15, 05:16 PM

Originally Posted by Bham1982

New construction doesn't pay full taxes. So your supposition that high rise towers aren't popping up everywhere because potential homeowners don't want to pay high property taxes is nonsensical. Downtown condo owners pay low property taxes. You'll pay less in property taxes on a Harbortown condo then on a suburban home.

It doesn't even make sense if their taxes were high. It isn't like high tax jurisdictions lack new housing construction as some general rule, and the mortgage costs would be the same either way, as the purchase price would adjust [[downward) according to the [[higher) tax burden.

And if there really were demand for such housing, yet some irrational fear of property taxes among potential residents, then why wouldn't rental buildings be popping up?

This is not normal free market real estate development.

http://www.michiganbusiness.org/cm/f...rprisezone.pdf

It is not even close. It's nothing but a jump start for a dead battery, it will never fix the battery. Developers, venture capitalist and banks are not intrested in climbing into bed with every bureaucrat they can possibly find to do a project, if someone thinks they do than they have never worked with them. Having a clock ticking towards sky high property taxes from the day the high end real estate closes is not a good position to market from no matter what the temporary break is. If you believe how well something like this works is a actual market indicator then you are a fool.

**corktownyuppie** · June-01-15, 07:26 PM

I do wonder if charging property tax as a percentage of value is really the smartest way to do this. On one hand, no matter what %age you are charging, if the property value is only $28,000...it's not going to be enough taxes. On the other hand, if you try to bump the percentage to something where the dollar amount is reasonable, then you prevent the home from ever getting to a normal level like 150-300k+.

The real estate market in Detroit is so bizarre that I think it might actually make more sense to charge taxes on a base dollar amount per square foot of space [[with some multiplier adjustment for being on the 7th or 20th floor...or adjusting for having 5 lots).

Anytime you're using a percentage in a market where real estate in the same jurisdiction goes from $8,000 to $1,000,000...it's not gonna make any sense.

**mwilbert** · June-01-15, 07:28 PM

Originally Posted by ABetterDetroit

This is not normal free market real estate development.

http://www.michiganbusiness.org/cm/f...rprisezone.pdf

"Free market" and "real estate development" are two terms that have rarely gone together anywhere in the US since WWII, and not that often previously. Building codes, height restrictions, lot size restrictions, occupancy restrictions, infrastructure requirements, government infrastructure provision, government mortgage guarantees, financing rules, taxation, and permitting all work together to make real estate development one of the least free-market areas I can think of, even without specific tax breaks for new construction/renovation.

**mwilbert** · June-01-15, 07:38 PM

Originally Posted by corktownyuppie

I do wonder if charging property tax as a percentage of value is really the smartest way to do this. On one hand, no matter what %age you are charging, if the property value is only $28,000...it's not going to be enough taxes. On the other hand, if you try to bump the percentage to something where the dollar amount is reasonable, then you prevent the home from ever getting to a normal level like 150-300k+.

The real estate market in Detroit is so bizarre that I think it might actually make more sense to charge taxes on a base dollar amount per square foot of space [[with some multiplier adjustment for being on the 7th or 20th floor...or adjusting for having 5 lots).

Anytime you're using a percentage in a market where real estate in the same jurisdiction goes from $8,000 to $1,000,000...it's not gonna make any sense.

One way you could do it [[and it has been tried elsewhere, not necessarily with success) is to move some of the stuff that is currently valuation-based to being fee-based. So one could argue that most city costs [[like garbage collection or police protection or EMS service) aren't very strongly related to the value of your house, so for some of those costs you assess a fixed fee per dwelling unit [[or any building for something like fire protection costs) , and then use an ad valorem tax for the rest of your costs. So you collect a reasonable amount from even the cheapest houses, and keep taxes on the highest end houses within some kind of sensible limits. One collateral benefit of this approach is that you can potentially collect fees from entities exempt from property tax.

Any such plan [[yours or this one) would require significant change to Michigan law, and possibly to the Michigan Constitution.

**ABetterDetroit** · June-01-15, 09:16 PM

Originally Posted by mwilbert

One way you could do it [[and it has been tried elsewhere, not necessarily with success) is to move some of the stuff that is currently valuation-based to being fee-based. So one could argue that most city costs [[like garbage collection or police protection or EMS service) aren't very strongly related to the value of your house, so for some of those costs you assess a fixed fee per dwelling unit [[or any building for something like fire protection costs) , and then use an ad valorem tax for the rest of your costs. So you collect a reasonable amount from even the cheapest houses, and keep taxes on the highest end houses within some kind of sensible limits. One collateral benefit of this approach is that you can potentially collect fees from entities exempt from property tax.

Any such plan [[yours or this one) would require significant change to Michigan law, and possibly to the Michigan Constitution.

The Michigan Constitution is actually not a sacred document renowned around the world as some sort of intelligent human civilization guide set in stone. Its getting a little old hearing that shit. A professional addressing this problem under a contract that had the ability to start with a blank sheet of paper would be fascinating.

**gvidas** · June-01-15, 10:11 PM

Originally Posted by corktownyuppie

Anytime you're using a percentage in a market where real estate in the same jurisdiction goes from $8,000 to $1,000,000...it's not gonna make any sense.

Just sniping a point in here -- I generally agree with your post. But try a range more like $300 to $59,282,000.

$300 is the current state equalized value on a house that a friend of mine owns and lives in.

$59 million is the current SEV of Compuware.

The distance between the two properties is just under 3 miles.

**gvidas** · June-01-15, 11:07 PM

On second thought, perhaps Compuware is a bogus data point given the context of the thread. I'm having a hard time finding a SEV for a plausibly-single-family residence north of half a million. 1771 Balmoral Dr is 376k.

Still, 300 to 376k is a pretty wide range. And there are actually a surprisingly large amount of properties in the sub-1k-SEV range.

**mwilbert** · June-02-15, 08:48 AM

Originally Posted by ABetterDetroit

The Michigan Constitution is actually not a sacred document renowned around the world as some sort of intelligent human civilization guide set in stone. Its getting a little old hearing that shit. A professional addressing this problem under a contract that had the ability to start with a blank sheet of paper would be fascinating.

I don't regard it as sacred. Mentioning it was simply to highlight the potential procedural and political difficulty of moving to a different system. Detroit can [[and needs to) do a better job of administering its current property tax system, but it can't change it without substantial assistance from the Legislature and the people of Michigan.

**ABetterDetroit** · June-02-15, 10:35 AM

Originally Posted by mwilbert

I don't regard it as sacred. Mentioning it was simply to highlight the potential procedural and political difficulty of moving to a different system. Detroit can [[and needs to) do a better job of administering its current property tax system, but it can't change it without substantial assistance from the Legislature and the people of Michigan.

You are correct. Lansing has been a major contributer to this problem by making property taxes the only state approved method of local revenue production. Has there been enough houses falling into ruin yet or foreclosure on just the back taxes? How about more cities caught in the same trap of trying just to maintain their income so the property tax gets hiked repeatedly until new residential construction becomes non existent?

**softailrider** · June-03-15, 07:13 PM

Originally Posted by Vic01

It could be that the guy you talked to is just a bit off... on the Realtor.com map now and Muirland stops at 7 Mile, there is no "North of 7 Mile".

Here's 18994 Muirland [[4 or 5 houses d [[4 or 5 houses South of 7 Mile) 2014 yearly taxes $4544. assessment $49,099

A couple of the closest "North of 7 Mile" across from Muirland
19210 Kingston [[sold Jan. 2015 for $190k, sounds like a "new buyer") total 2014 yearly taxes $4964. assessment $67,988.
I'll agree that if his $4964. jumps up to $20,000 yearly taxes somethings seriously wrong.

19444 Stratford [[currently listed for sale $225,000) total 2014 yearly taxes $4360. assessment $59301. Yes on the "Homestead".

Talker to another guy today about his rental house on Cadieux across from the high school. I think it's around the 5000 block. I've been in this house, it's a nothing special brick 2 bedroom with a finished attic area. Couldn't be more then 900 sq. feet not including the basement. Thinking about this thread I asked what the property tax was on that property, he said it was around 2500.00 now down from a high of over 3000.00 at one point.