Free Press Building Back up for Sale -- for $16 million!

[ndavies]

City council does not, and should not, have the authority to ban certain investors from buying property in the city.

The biggest problem with this type of land speculation is due to a major flaw in the Headlee Amendment.

When a land speculator buys property at rock-bottom prices, their property taxes are forever based on that initial low value, and can only be increased by very small annual percentages. This results in land speculators buying in at very low prices, and then sitting on valuable property for years, even decades, while they pay almost nothing in property taxes, and fail to develop their property and reject reasonable market-rate purchase offers in lieu of holding out for an even bigger windfall.

Michigan needs to revise the Headlee Amendment to exclude speculative investment from normal property tax increases. The Headlee Amendment was created and passed to prevent homeowners from being taxed out of their property due to rising property values. The intent of the Headlee Amendment is valid, and it does protect Michigan homeowners from being taxed out of their homes when property values increase, but it also creates a huge tax loophole for land speculators.

It wasn't Headlee that did this. Headlee put a limit on total tax revenues that could be collected and restricted the amount of money that could be pulled away from local government entities by the state.

The Headlee amendment is irrelevant at the moment. We are almost $10 billion under the Headlee amendment limits. The state government would have to authorize over 10 Billion dolars more before they even came close to the Headlee amendment limits.

http://www.michigan.gov/budget/0,160...206--F,00.html

It was in 93-94 Prop A that limited the amount a properties appraisal could go up on an owner. This change was put in place to stop people from losing their homes to excessive property tax increases. Their was also the trade off of 18 mills of property taxes for a 2% increase in sales tax.

There was a huge problem in the late 80s with high tax inflation without a similar increase in peoples wages. We were at the time in the midst of another collapsing local auto industry.