Detroit’s rebirth as ‘America’s Great Comeback City’ hits roadblock.....

[Canadian Visitor]

Detroit’s rebirth as ‘America’s Great Comeback City’ hits roadblock as taxes kill homeowners’ dreams

http://business.financialpost.com/2015/03/11/detroits-rebirth-as-americas-great-comeback-city-hits-roadblock-as-taxes-kill-homeowners-dreams/

This story appeared in Canada's National Post today, but originated with Bloomberg

[DetroiterOnTheWestCoast]

Reposting the link from above.

http://business.financialpost.com/2015/03/11/detroits-rebirth-as-americas-great-comeback-city-hits-roadblock-as-taxes-kill-homeowners-dreams/

I really do hope that the powers that be can figure out a way to keep more of these homes out of foreclosure.

It is interesting to see that 10,000 of the original 62,000 homes involved have paid their taxes in full. I'm surprised its that many.

While I feel sorry for the homeowner profiled in the story .... she "is having her fourth child in May." Seriously????

[Shai_Hulud]

Reposting the link from above.

http://business.financialpost.com/2015/03/11/detroits-rebirth-as-americas-great-comeback-city-hits-roadblock-as-taxes-kill-homeowners-dreams/

I really do hope that the powers that be can figure out a way to keep more of these homes out of foreclosure.

It is interesting to see that 10,000 of the original 62,000 homes involved have paid their taxes in full. I'm surprised its that many.

While I feel sorry for the homeowner profiled in the story .... she "is having her fourth child in May." Seriously????

Yep, reproducing into poverty. Both tenuous employment and a child with health problems for approaching ten years. I would think another mouth to feed would be at the bottom of the priorities list.

[ABetterDetroit]

Finally a article that points out the fact that the property tax rates in Detroit are the highest of any big city in the country. Lower the tax rate and all economic levels will benefit and more property taxes would be collected if they where not so outrageous. Stop the cycle of taxation into total ruin.

[EastsideAl]

What a ridiculous story. First of all, for the prime example of the problem the author starts off with someone who probably shouldn't be a homeowner at all [[and wouldn't be if not for the incredibly low sales prices in many Detroit neighborhoods), and who also sounds like she did basically everything wrong.

Only then does the author go on to discuss the measures the Duggan administration is undertaking to address the the problem. These measures are, in fact, unprecedentedly aggressive and pro-active, and designed to keep people in their homes while at the same time collecting the money the city needs to operate. Only you'd never really know that from this article. He just mentions several times how high the property taxes are [[and they sure are), with no consideration at all of how and why that happened, or what could be done about it.

Of course, as with all of these types of articles, the author gives no ideas about how the hell you're supposed to run a city with an aging infrastructure built for more than a million mostly middle class homeowners and thriving industrial and commercial sectors on a tax base of less than half a million mostly poor homeowners and lots of declining or abandoned industries and stores. All with declining valuations [[as the article points out), and with very little help from the state or anyone outside [[as it doesn't point out).

No matter what sort of anti-tax agenda some journalist may have, the fact remains that even with the huge service cuts, and cuts via bankruptcy in what the city owes, someone still has to pay something to keep some basic services running around here.

[Cincinnati_Kid]

Good article, but what makes people think it will be any different with the GOP running the show?
Republicans are going to tax us into infinity, can't wait to see what kind of new tax we will have to pay to fix these piss poor roads.

[Canadian Visitor]

By way of comparison; to a City obviously in a different place financially and growth wise..........below is the property tax payable for a $500,000Cdn home in Toronto [[City's calculator)
	Total Taxes: $3,615.04*	Of which: $1,015.00 goes to Education $2,587.33 goes to the City $12.72 goes to the Transit Expansion
	* Please note that this amount is the total tax amount on your home. A portion of this goes to fund the Province’s Education system. This is why your total taxes are made up of a City rate and an Education rate. Your 2014 City tax rate is 0.5174652%. Your 2014 Education tax rate is 0.203000%. Your 2014 Transit Expansion tax rate is 0.0025433%. Your 2014 Total tax rate is 0.7230085%.

[Canadian Visitor]

I should add to the above by noting the following:

Water and Garbage and cost-recovery services for which you pay separately. [[though recycling and composting are free).

And Toronto also charges a Land Transfer Tax when you buy/sell a home, which generates around 400M per year, I believe [[out of a 10 Billion dollar budget)

[ABetterDetroit]

By way of comparison; to a City obviously in a different place financially and growth wise..........below is the property tax payable for a $500,000Cdn home in Toronto [[City's calculator)
	Total Taxes: $3,615.04*	Of which: $1,015.00 goes to Education $2,587.33 goes to the City $12.72 goes to the Transit Expansion
	* Please note that this amount is the total tax amount on your home. A portion of this goes to fund the Province’s Education system. This is why your total taxes are made up of a City rate and an Education rate. Your 2014 City tax rate is 0.5174652%. Your 2014 Education tax rate is 0.203000%. Your 2014 Transit Expansion tax rate is 0.0025433%. Your 2014 Total tax rate is 0.7230085%.

Thank you

Thats how you grow your tax base, [[Detroits only hope of truly being a funtional city) improve your neighborhoods, schools etc. It's the elephant in the room that nobody wants to talk about. A high rent tax is the fastest way to destroy a neighborhood period. Anybody who can seek relief by moving out will, and it guarantees that the smallest amount of people with means will move in. The end result is people with no business owning a home like this woman [[who cleaned another house to raise the money to buy her own) get totally screwed because they think 6k is all you need to own a home. Then the cycle repeats, until it is abandoned of course.

[EastsideAl]

improve your neighborhoods, schools etc.

Except how do you do that, and maintain basic city services and infrastructure, with out some $$$? It's gotta come from somewhere, and it sure isn't coming in amounts anywhere near large enough from Lansing or Washington, or from the city's already much-maligned and threatened income tax.

[Canadian Visitor]

Except how do you do that, and maintain basic city services and infrastructure, with out some $$$? It's gotta come from somewhere, and it sure isn't coming in amounts anywhere near large enough from Lansing or Washington, or from the city's already much-maligned and threatened income tax.

I'm not fully familiar w/Detroit's tax system; but based on what I've scoped out; you have a serious problem.

So, I'm a Canadian, somewhat familiar w/Detroit, looking for ways to invest capital, and considering what is surely under-valued real estate on its face, in Detroit.

I consider, a home at $10,000, the comp in Toronto of which would cost $1,000,000.......... I think hey, opportunity............I'm happy to buy to renovate/restore and either flip or rent out........

At 10k, buying for cash is no prob.

But before we get into complexities of foreign ownership; or in my case living a 1/2 days' drive from the area in question.........

We run into basic economics..........if I fix the place; at min cost of $20k
can I recover that through flipping if the area remains the same?

Probably not right away...............

But I could rent it? .......if I'm facing any arrears in taxes, plus a bill that could be over $3,000 per year...........before insurance and utilities.........

Could I rent at a profit?

Very tough.

There is a question of making the re-investment in an area desirable........

I appreciate Detroit's conundrum.

Downsizing services is complicated and expensive in its own right and may adversely affect re-development; but carrying those costs and waving past debts may be fiscally dubious at best.......

It certainly seems to require state-level intervention.

[FlyOnTheWall]

improve your neighborhoods, schools etc.

Except how do you do that, and maintain basic city services and infrastructure, with out some $$$? It's gotta come from somewhere, and it sure isn't coming in amounts anywhere near large enough from Lansing or Washington, or from the city's already much-maligned and threatened income tax.

Their you go again, Al.... Wanting the Federal government and/or the state to fix what the citizens of Detroit screwed up. The citizens of Detroit voted all those corrupt officials to lead them. Well. the citizens of Detroit got what they voted for.

Now allow me to help you with the poor schools.

Schools will NOT improve no matter how much money is thrown at them. Schools will only improve when the voters start holding the school boards accountable. Getting the voters together and flooding school board meetings with voters will do more good than throwing any amount of money at the people that say it is "for the children". Cost of this solution? A couple of bucks for each voter to get to the school board meeting. No Federal or state money needed. Just caring parents and voters. You do have caring parents and voters, don't you?

If you get honest caring school board members, they will hire a quality superintendent which will further choose quality principals who will oversee the teachers and other school personnel. See how that works? It takes the caring parents and voters of the city to stand up and demand the quality starting at the top. You might have to buy a little gas for your car or pay bus fare to the school board meetings. It would hardly require Federal or state money to do that, just caring parents and voters that won't give up.

[MSUguy]

Their you go again, Al.... Wanting the Federal government and/or the state to fix what the citizens of Detroit screwed up. The citizens of Detroit voted all those corrupt officials to lead them. Well. the citizens of Detroit got what they voted for.

Now allow me to help you with the poor schools.

Schools will NOT improve no matter how much money is thrown at them. Schools will only improve when the voters start holding the school boards accountable. Getting the voters together and flooding school board meetings with voters will do more good than throwing any amount of money at the people that say it is "for the children". Cost of this solution? A couple of bucks for each voter to get to the school board meeting. No Federal or state money needed. Just caring parents and voters. You do have caring parents and voters, don't you?

If you get honest caring school board members, they will hire a quality superintendent which will further choose quality principals who will oversee the teachers and other school personnel. See how that works? It takes the caring parents and voters of the city to stand up and demand the quality starting at the top. You might have to buy a little gas for your car or pay bus fare to the school board meetings. It would hardly require Federal or state money to do that, just caring parents and voters that won't give up.

Did they play role of course. But no intelligent person believe that they are of solely responsible for the condition of city. They had no control over the decline of auto industry and aren't solely responsible for the regions inability to cooperate on basic things mass transit.

The school board has had no power other than brief span in the mid-2000's for the last 15 years. It's kind of hard to take someones opinion on this matter seriously when they have no clue as to how DPS has been managed since 2000. So your blathering about how Detroiters needs to elect a good school board, to hire a superintendent is pointless when they haven't had that power in a very long time.

http://www.metrotimes.com/detroit/af...nt?oid=2302010

[ABetterDetroit]

Except how do you do that, and maintain basic city services and infrastructure, with out some $$$? It's gotta come from somewhere, and it sure isn't coming in amounts anywhere near large enough from Lansing or Washington, or from the city's already much-maligned and threatened income tax.

The way to do it is through a tax reform. A tax reform that doesn't cut the size of the government's income but redistributes how it is collected. Teabaggers will be no help, their goal is to obstruct government, look what they are doing to their own party in Washington if you want proof.

Its reasonable to understand that the system that has been running for years has gotten out of whack and is not working around here anymore. What is unreasonable is doing nothing to change it. The city income tax is a fine idea and it is growing revenue. The problem is that Lansing is not withholding it so it is easily cheated and the city doesn't see all the funds come their way. City income taxes implemented properly do a fine job for raising revenue in almost all cities in the country. There is nothing wrong with that. It is an effective form of giving residents services with the revenue that grows.

There are several changes that need to be done to achieve the goal of giving the city proper funding, and the state for that matter, because they are intertwined and obviously messed up equally.

[FlyOnTheWall]

Did they play role of course. But no intelligent person believe that they are of solely responsible for the condition of city. They had no control over the decline of auto industry and aren't solely responsible for the regions inability to cooperate on basic things mass transit.

The school board has had no power other than brief span in the mid-2000's for the last 15 years. It's kind of hard to take someones opinion on this matter seriously when they have no clue as to how DPS has been managed since 2000. So your blathering about how Detroiters needs to elect a good school board, to hire a superintendent is pointless when they haven't had that power in a very long time.

http://www.metrotimes.com/detroit/af...nt?oid=2302010

I was talking about improving the schools, not about the auto industry nor about the condition of the city. If you want good schools, it starts at the school board level. The condition of the city is all about the people that are elected just as it is with the school boards. You get what you vote for. If you vote for crooks, you get a system that supports crooks! Detroit has proven that! If you support honest caring people you get honest caring people. That seems very scarce in Detroit. The schools needs honest caring people, they aren't getting that. They are getting crooks!

THINK HOW YOU VOTE!

[softailrider]

By way of comparison; to a City obviously in a different place financially and growth wise..........below is the property tax payable for a $500,000Cdn home in Toronto [[City's calculator)
	Total Taxes: $3,615.04*	Of which: $1,015.00 goes to Education $2,587.33 goes to the City $12.72 goes to the Transit Expansion
	* Please note that this amount is the total tax amount on your home. A portion of this goes to fund the Province’s Education system. This is why your total taxes are made up of a City rate and an Education rate. Your 2014 City tax rate is 0.5174652%. Your 2014 Education tax rate is 0.203000%. Your 2014 Transit Expansion tax rate is 0.0025433%. Your 2014 Total tax rate is 0.7230085%.

Those property taxes sound reasonable. The other taxes Canadians pay aren't.

[sumas]

When we first inherited our home, the taxes went to 9.8k which was ridululous. Took two years but did get it down to a reasonable rate. Some "kind" forumer blathered we hadn't paid property tax. Can't imagine why my small life garners such interest. Taxes adjusted, paid, in fact over paid.
We have invested massively to property improvement. Not fun things though. Redid electricals, plumbing, rebuilt a garage, even had the fireplace cleaned. Home ownership is a big responsibility. Fire extinguishers, smoke detectors on all four floors, checked routinely. Maintain home owners insurance etc. I love my home, doubt our kids will want it, old homes are money suckers but they will sell for an excellent price for a well maintained home in a nice area.

Really don't recommend the auction flip thing. You want the home cheap, live in it, then flip or rent. Scrappers will get to it quickly if un occupied. That is reality.

[Canadian Visitor]

Those property taxes sound reasonable. The other taxes Canadians pay aren't.

I don't want to start a side-tangent on ON, Canada vs Michigan tax levels......but when I see things like this posted I always wonder how well informed they are.

So....

Federal Income Tax - Canada

• 15% on the first $44,701 of taxable income, +
• 22% on the next $44,700 of taxable income [[on the portion of taxable income over $44,701 up to $89,401), +
• 26% on the next $49,185 of taxable income [[on the portion of taxable income over $89,401 up to $138,586), +
• 29% of taxable income over $138,586.

And Ontario

5.05% on the first $40,922 of taxable income, +
9.15% on the next $40,925, +
11.16% on the next $68,153, +
12.16% on the next $70,000, +
13.16 % on the amount over $220,000

In plain English; if you earned $50,000, and claimed nothing other than the basic-tax-exemption [[the amount everyone is allowed to earn tax free [[just over $11,000)

Your effective tax rate is 20%.

Payroll taxes are lower here than in the U.S.

The Ontario health tax is a few hundred dollars per year. [[pay zero if you're low income) .

And we do have sales tax of 13%........but groceries and rent are exempt; and i your low-income, your sales tax is full rebated to you in your tax return.

Oh, and you get healthcare that, excepting prescriptions/dental/vision........though prescriptions are covered if you're a senior or low income and low income kids get dental and vision.

***

Not a better/worse argument vis a vis the US......but to inform, as I suspect you imagine tax is much higher here than it is. Which is only true for booze/gas for the most part.

[Canadian Visitor]

I should add that while we don't have mortgage interest deductability here; we do have large child benefits if you have kids [[thousands go back to you) and we do have deductions out the wazoo for a host of other things small and large from transit passes to kids sports.

Currently there are no municipal income or sales taxes

[EastsideAl]

I guess I forgot that Detroit isn't part of the State of Michigan or the U.S., and Detroiters are not citizens of them, so it would be crazy of us to ask for or expect any help from them.

[sumas]

I guess I forgot that Detroit isn't part of the State of Michigan or the U.S., and Detroiters are not citizens of them, so it would be crazy of us to ask for or expect any help from them.

I know you're being flip but can't help but appreciate the sentiments. Seems we are off the radar too often. Hear one more time, Detroiters get, who they vote for junk, I'll scream. Fix the voting booth scams and you'll see. I am surrounded by intelligent voters. Only query is how did Duggan get in. Maybe a clean election?

[313WX]

I guess I forgot that Detroit isn't part of the State of Michigan or the U.S., and Detroiters are not citizens of them, so it would be crazy of us to ask for or expect any help from them.

And the real kicker about the "blame Detroiters" crap is no one ever considers the fact that the 600,000 people left behind withvery little means have to maintain their share of the infrastructure as well as the share of the infrastructure for the 1.2 million people who just up and left for the suburbs.

[bailey]

And the real kicker about the "blame Detroiters" crap is no one ever considers the fact that the 600,000 people left behind withvery little means have to maintain their share of the infrastructure as well as the share of the infrastructure for the 1.2 million people who just up and left for the suburbs.

Much of the issue could be resolved if any one of the number of proposals to shrink that totally out sized infrastructure could be enacted without screams about white suburbanites looking to profit from the plantation...stealing jewels...etc. Huge swaths of the city need to be taken offline. Addressing that could go a long way to rightsizing the tax burden to the population.

[iheartthed]

Much of the issue could be resolved if any one of the number of proposals to shrink that totally out sized infrastructure could be enacted without screams about white suburbanites looking to profit from the plantation...stealing jewels...etc. Huge swaths of the city need to be taken offline. Addressing that could go a long way to rightsizing the tax burden to the population.

It will not since Detroit doesn't have control over the mechanism flooding the region with excess infrastructure.

[FlyOnTheWall]

I guess I forgot that Detroit isn't part of the State of Michigan or the U.S., and Detroiters are not citizens of them, so it would be crazy of us to ask for or expect any help from them.

Maybe you should also complain that Canada isn't giving enough money to Detroit as Detroit is part of North America.