Large tax bills coming for downtown residents. Will they stay?

Interesting article in Bridge Magazine.

http://bridgemi.com/2016/06/city-dwe...breaks-expire/

I was not aware that the tax breaks were that significant in some of the hot areas. Obviously, incentives were/are necessary but it strikes me as unfair that newer, wealthier residents are paying next to nothing and receiving much of the service while the rest of city struggles.

That being said, I think they should gradually phase the NEZ breaks out. Who wants to swallow a 3000% tax increase even if they understood that was part of the deal? That could be very damaging to the nascent recovery.

Of course, the real issue is that city property taxes need a complete overhaul but...

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Originally Posted by Shai_Hulud

Interesting article in Bridge Magazine.

http://bridgemi.com/2016/06/city-dwe...breaks-expire/

I was not aware that the tax breaks were that significant in some of the hot areas. Obviously, incentives were/are necessary but it strikes me as unfair that newer, wealthier residents are paying next to nothing and receiving much of the service while the rest of city struggles.

That being said, I think they should gradually phase the NEZ breaks out. Who wants to swallow a 3000% tax increase even if they understood that was part of the deal? That could be very damaging to the nascent recovery.

Of course, the real issue is that city property taxes need a complete overhaul but...

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Well who wants to keep paying Detroit taxes living in a regular neighborhood, while some clown living in a $300K condo whines about paying taxes on all the money he's making in Detroit. $500 a year? What a joke.

I suppose some "adjustment" will be made. My question is: How long before the folks in the regular neighborhoods grab their pitchforks and torches?

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Originally Posted by Bobl

I suppose some "adjustment" will be made. My question is: How long before the folks in the regular neighborhoods grab their pitchforks and torches?

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Took me all about 10 seconds....

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Originally Posted by Honky Tonk

Well who wants to keep paying Detroit taxes living in a regular neighborhood, while some clown living in a $300K condo whines about paying taxes on all the money he's making in Detroit. $500 a year? What a joke.

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I don't disagree.

But a big tax jump in the green zone probably means increasing rents and falling home values there. Which means the growth of the green zone slows and with it whatever spillover effect there is.

NEZ was never anything but a band-aid for a property tax system completely fucked up by the Engler administration but what the hell, the toney towns are still nice and exclusive and they built some new subdivisions in some farm fields for a few years plus we could enjoy the worst performing housing market for decades. It's not like Michigan needed a vibrant housing economy to provide jobs or anything, we could send all those folks out of state to work because after all we build cars!

And lets not forget that if you're already a resident of Detroit you don't qualify for the overwhelming majority of the incentives these newer residents are receiving. Does anyone know any long term residents who are receiving "move here" money? Because Id sure like to know how I can get my rent subsidized until I can get my hands on some of that forgivable loan money that's being handed out to locally employed buyers like candy on Halloween. Especially since the objective of these programs is to drive up the cost of rent for people like me.

If new Detroit is forced to pay higher taxes in exchange for living in the choicest part of town, or just choose to move elsewhere, I know I won't lose any sleep over it. And I don't expect these folks to give a shit where the rest of us end up either.

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Originally Posted by detroitsgwenivere

And lets not forget that if you're already a resident of Detroit you don't qualify for the overwhelming majority of the incentives these newer residents are receiving. Does anyone know any long term residents who are receiving "move here" money? Because Id sure like to know how I can get my rent subsidized until I can get my hands on some of that forgivable loan money that's being handed out to locally employed buyers like candy on Halloween. Especially since the objective of these programs is to drive up the cost of rent for people like me.

If new Detroit is forced to pay higher taxes in exchange for living in the choicest part of town, or just choose to move elsewhere, I know I won't lose any sleep over it. And I don't expect these folks to give a shit where the rest of us end up either.

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Yeah I wasn't a fan of those incentives either since the rest of us spent our money without the help. Are "Live Downtown" and "Live Midtown" incentives still offered to company employees today? Looks like they are sadly. Time to spend that money where needed:- better safety and services.

Mine went from $3k to $13k [[est) this year. Yeh it's painful but I expected it. Similar condos with little NEZ left are listed for 30% above what I paid a year ago sooooo, either the seller is dreaming or they don't expect the tax hike to have that much of an impact on price.

PS. HOA at BC are > $8000/year right?

I am not a fan of NEZ incentives and they have "helped" us. We bought an NEZ property back in 2008 after selling a Lafayette Park Townhouse. We were excited when the projected property taxes for our new historic home were lower. We later found property taxes in LP were also very low compared to the City average [[perhaps because it was a Cooperative). The next year, our NEZ property was split into three parcels, one for land with no tax benefit, one for the historic building with its taxes "frozen" and one for a new add-on with a NEZ reduced rate.

Of course some entity [[the City blames the State and the State blames the City) set our land assessment very high [[perhaps to maximize taxes collected), set our new add-on, a garage, at a true cash value of more than $300k [[seriously) and assessed value of a nice historic building very low but still somehow unfroze the value from what the previous owner recognized [[what exactly does frozen mean anyway). The total sum of assessments was about double market. Our property taxes went up over 1000% in the first year we owned the versus the prior owner. Only after six years of battling the State and the City did we finally get to a place where our taxes are "reasonable". Overall we are still better off than most in the City.

Nonetheless we'll be paying well into five figure taxes when the NEZ expires. We struggled about selling and sticking the high taxes to someone else but as we poured ourselves into the place and were emotionally tied, we decided instead to further invest in the property to be able to rent it out a part of it. Now our big fear is they'll jack up our taxes excessively and eat up all the rental income.

NEZ is overly complex, and moreover unfair. The City and State need to reform the property tax system completely. A hybrid property tax system that considers factors of lot size and building size would be a far better approach. The present system is unequivocally broken and NEZs should be abolished.

I'd like to get more detailed information on the millages for the city. How are they repealed[[I assume some city council and mayor vote.)? Are there any that expire like the DIA millage? I'm completely clueless on that.

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Originally Posted by detroitsgwenivere

And lets not forget that if you're already a resident of Detroit you don't qualify for the overwhelming majority of the incentives these newer residents are receiving. Does anyone know any long term residents who are receiving "move here" money? Because Id sure like to know how I can get my rent subsidized until I can get my hands on some of that forgivable loan money that's being handed out to locally employed buyers like candy on Halloween. Especially since the objective of these programs is to drive up the cost of rent for people like me.

If new Detroit is forced to pay higher taxes in exchange for living in the choicest part of town, or just choose to move elsewhere, I know I won't lose any sleep over it. And I don't expect these folks to give a shit where the rest of us end up either.

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Amen......

I seem to be missing the problem.

If the market dictates rent increases and occupancy can remain at north of 80% levels by charging 300% more than before, we have new people living there with more disposable income who expend more on purchasing power and employ more Detroiters than the prior residents.

We should be cheering them on to victory.

PS - And if having rent incentives is important to you - your tailor your skill set to go work for one of those companies. Entirely within your control. Why would you choose not to do so if you place so much value on said incentive? One gets nothing by wishful thinking. Only by hard work.

As a member of "Old Detroit", I don't care if other "Old Detroiters" are upset about changes happening in the city. It's not my job to support artificially depressed conditions in the city just so they can live cheaply [[especially in the choicest parts of town) and partake in anti-social and illegal activity. In fact, I hope they will pick up move elsewhere.

And yes, half of long-term Detroiters benefit from free money too. It's called not paying property taxes, not paying utility bills, not paying court fees, not having car insurance, and welfare.

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Originally Posted by belleislerunner

I seem to be missing the problem.

If the market dictates rent increases and occupancy can remain at north of 80% levels by charging 300% more than before, we have new people living there with more disposable income who expend more on purchasing power and employ more Detroiters than the prior residents.

We should be cheering them on to victory.

PS - And if having rent incentives is important to you - your tailor your skill set to go work for one of those companies. Entirely within your control. Why would you choose not to do so if you place so much value on said incentive? One gets nothing by wishful thinking. Only by hard work.

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You're voting for Trump, aren't you?

The tax balance between new residents [[who certainly should feel like they are residents, too) and old residents is worth discussion, but the real problem underneath is that Detroit taxes are just plain too high. Why? Because the city spends way too much money on stupid stuff.

Until the problem of ever-expanding goals for government are addressed, the fights will continue -- and the renaissance all want will move farther away.

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Originally Posted by belleislerunner

I seem to be missing the problem.

If the market dictates rent increases and occupancy can remain at north of 80% levels by charging 300% more than before, we have new people living there with more disposable income who expend more on purchasing power and employ more Detroiters than the prior residents.

We should be cheering them on to victory.

PS - And if having rent incentives is important to you - your tailor your skill set to go work for one of those companies. Entirely within your control. Why would you choose not to do so if you place so much value on said incentive? One gets nothing by wishful thinking. Only by hard work.

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Condescending much? Again, it doesn't matter if you work for one of the companies that offers these incentives [[which I do), if you were already a resident before the program started, you don't qualify for most if not all of these programs.

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Originally Posted by detroitsgwenivere

Condescending much? Again, it doesn't matter if you work for one of the companies that offers these incentives [[which I do), if you were already a resident before the program started, you don't qualify for most if not all of these programs.

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I investigated Live Downtown fairly thoroughly and was never told that being an existing resident disqualified you. If you move from outside the boundary to in, you can get the incentive. Whether you move from the westside or from Novi is immaterial.

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Originally Posted by belleislerunner

I seem to be missing the problem.

If the market dictates rent increases and occupancy can remain at north of 80% levels by charging 300% more than before, we have new people living there with more disposable income who expend more on purchasing power and employ more Detroiters than the prior residents.

We should be cheering them on to victory.

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Clearly,

We aren't talking about market forces. We are talking about market manipulation by the city and to a lesser extent, private companies. The city's efforts being especially ham-fisted.

The pile of cash on the table for NEZ residents came from the rest of the Detroiters who were actually paying property taxes. Because the pile was so big, when it goes away there will likely be falling demand, coupled with rising rents and falling home value that could undue part of the progress made.

Some of the "pile of cash" might have come from casinos and the reduced
amount of state revenue sharing [[much of which is from sales tax, which
impacts all lower income state residents more, meaning small town Michigan
is subsidizing the NEZs to that certain degree). I personally am happy to
have the NEZ new neighbors in there though.

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Originally Posted by Shai_Hulud

I investigated Live Downtown fairly thoroughly and was never told that being an existing resident disqualified you. If you move from outside the boundary to in, you can get the incentive. Whether you move from the westside or from Novi is immaterial...

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What I'm trying to find out is, does anyone know anybody who has lived in the downtown area for a significant amount of time, like 7+ years, who when attempting to move within the district has been able to take advantage of any of these incentives, renting or buying? Or does anyone on DYES fit the bill as I described above? I was rejected per the guidelines set by my employer when I applied a few years ago after being forced to trade digs, been living down here for about a decade myself, and I don't know of a single long term neighbor that receives any incentives. I know what the guidebook says. It's the actual application I'm griping about.

http://www.detroitlivedowntown.org/w..._Guideline.pdf

I know that when most Detroiters go to make a purchase we wont qualify for any of those incentives, LiveDowntown, NEZ, or otherwise, as we probably wont be able to afford to live in the area anymore regardless. I also realize that as a renter I'm not entitled to live in the downtown area. To be able to afford to buy and live in Detroit I'll most likely end up in a half decent house in a borderline warzone and referred to as an "Urban Pioneer." It is what it is.

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Originally Posted by belleislerunner

I seem to be missing the problem.

If the market dictates rent increases and occupancy can remain at north of 80% levels by charging 300% more than before, we have new people living there with more disposable income who expend more on purchasing power and employ more Detroiters than the prior residents.

We should be cheering them on to victory.

PS - And if having rent incentives is important to you - your tailor your skill set to go work for one of those companies. Entirely within your control. Why would you choose not to do so if you place so much value on said incentive? One gets nothing by wishful thinking. Only by hard work.

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i agree, longtime Detroiter here, NEZ was initiated for a reason, and while at first its appeal was limited, it seems to have helped alot of influx. It was a desperate endeavor, [[cleveland and others have done the same ) and now that the areas are booming, some resentment seems to appear which I find odd as all people did was take advantage of encouragements to come on down, as few others were willing to at the time. Employee incentives were done for the same reason, to encourage living downtown and fill many empty spaces, it also worked. Without these programs, our scenario. would be different today in midtown and downtown. 2016 success didnt materialize without these programs success. I agree with you, if you wanted to benefit, last time I checked , its a free enterprise system ,try your best to qualify. The city needs to overhaul its assessment system, yes, but I hardly feel ill towards those who utilized these benefits. Im very glad they chose to move, invest and spend here rather than Royal Oak.

For me D-Gwenivere is sticking to her likely American Southern roots in
terms of her preferred activities, which do not include setting fires for
fun - there are absolutely a few severely disturbed individuals out there
in Detroit who together are setting up to 3000 fires every year [[based on
the Motor City Muckraker study) - this is like 8 to 10 fires per day, so at
least 8 to 10 individuals are involved, but unlikely as many as 3000, and
there are at least 600,000 individuals living in Detroit.

No Dumpling, not southern. My family left Europe before WW2. So I'm more like a Teutonic knight, they use swords not fires :)

Sales prices in historic neighborhoods in the city have seen big jumps in prices over the last few years and those areas don't have the benefit of incentives. It may stall or slow growth in sales prices as it equalizes with rest of the city. But I just don't see it causing in an exodus given what's happening in other high demand areas of without incentives.

^^
If you're considering Brush Park, then the incentives are still there but rolling over. I don't think the NEZ sunset is effecting them though. Another property just listed for $425k which is about $100k more than it likely would have listed only a year ago. Things are nuts there

detroitsgwenivere had a excellent link to some of the best raw data that can be downloaded comparing property tax rates in cities across the country that is no longer here but right on topic so I will repost for anyone who seeks to learn more on the subject.

The Lincoln Institute Of Land Policy


http://www.lincolninst.edu/subcenter...-property-tax/