City Cracking Down on Those Who Use Suburban Addresses But Live in the City

**detroitpride313** · May-18-17, 11:23 AM

"Detroit residents who use a suburban address to avoid paying income tax and high insurance costs are under fire, according to a Detroit Free Press article that ran this morning.

The city of Detroit is targeting 33 residential buildings in an aggressive effort to collect millions of dollars in unpaid income tax. The buildings include the Penobscot Building, Cadillac Square Apartments, and Broderick Tower, according to the story and at least 7,000 possible tax evaders have been identified."

http://www.metrotimes.com/news-hits/...burban-address

**clubboss** · May-18-17, 11:53 AM

Originally Posted by detroitpride313

http://www.metrotimes.com/news-hits/...burban-address

From the article:
"Through the records they were able to obtain, they discovered that less than 15 percent of residents at all 33 properties filed income taxes in 2014. At four of the properties none of the residents filed income tax returns the same year.
Some residents owe as little as $350, others are responsible for $400,000 in back taxes".

Pitiful

**dtowncitylover** · May-18-17, 11:59 AM

Good! You want to live here, pay your taxes and help support the city! Well, the high insurance sucks so I understand that...

**Richard** · May-18-17, 12:20 PM

This link from the free press provided at the bottom of the times gives a lot more explanation.

http://www.freep.com/story/news/loca...ers/328026001/

I understand the metrics behind the whole work in the city live in the burbs but pay taxes for working in the city but is it really the way to go about it?

There are some cities that operate without that requirement and seem successful enough,but should not the focus be on makeing the city the most economical place to work and live. Like addressing the whole tax thing and insurance,it seems like a more of a reactionary impulse to answer the problems.

I also understand that being under the states thumb kinda puts things in a holding pattern of sorts for the next three years.

**EGrant** · May-18-17, 12:34 PM

I don't sympathize with people who aren't paying taxes, but this is clearly a result of the real issue, the high cost of auto insurance in Detroit. This will continue to stunt any growth the city sees. I know a ton of people evading taxes because of this.

Of course, if you can afford that sweet pad in the Broderick but you can't afford auto insurance, move to Berkley and Google some advice on spending habits.

**ABetterDetroit** · May-18-17, 12:44 PM

This mentality is so hypocritical.

"They should do that! They should do this! Why don't we have this like other cities?"

Then they cheat on their taxes or skip out on them altogether in this case.

**Hermod** · May-18-17, 12:59 PM

Originally Posted by ABetterDetroit

This mentality is so hypocritical.

"They should do that! They should do this! Why don't we have this like other cities?"

Then they cheat on their taxes or skip out on them altogether in this case.

But, but, but these are the hipsters that are rejuvenating the city and are obviously the way of the future.

**Richard** · May-18-17, 01:05 PM

Originally Posted by EGrant

I don't sympathize with people who aren't paying taxes, but this is clearly a result of the real issue, the high cost of auto insurance in Detroit. This will continue to stunt any growth the city sees. I know a ton of people evading taxes because of this.

Of course, if you can afford that sweet pad in the Broderick but you can't afford auto insurance, move to Berkley and Google some advice on spending habits.

Wow this shows Detroit as the highest in the nation at 165% over.

They also say that it is because personal injury has no cap.

My basic insurance has a $10,000 pip or personal injury protection cap,I was hit while as a passenger and my insurance covered the 10k cap and the person who hit us insurance covered 10k for a total of 20k and recovery damage is limited to the persons policy coverage.

Bascialy if you get hit it is better to get hit by somebody that has a high policy value,like a semi truck.

So my basic insurance rate with no tickets or caused accidents on a 1997 Jaguar is $130 a month it went up $200 a year after the guy hit us.

So the insurance is capped but so is the ability to claim,it is a trade off,I guess the question is would people be willing to have that trade off in Detroit?

https://www.usatoday.com/story/money...roit/15622121/

**detroitpride313** · May-18-17, 01:49 PM

Originally Posted by dtowncitylover

Good! You want to live here, pay your taxes and help support the city! Well, the high insurance sucks so I understand that...

Agreed. Obviously the city income tax sucks as does the high insurance, but those are the costs of living here and it's not fair to those of us who are paying as we should.Hopefully reform will come soon to alleviate the auto insurance burden but I'm not banking on it...

**MikeyinBrooklyn** · May-18-17, 03:13 PM

Auto insurance rates are determined by risk factors. Geography is a major factor. When Detroit's number of car thefts, vandalism & accidents correspond to those elsewhere, so will rates.

City income tax hurts everyone. I hope one day we do away with it.

Those 2 points having been made, no one should commit insurance fraud or evade taxes. The city should crack down.

**Meddle** · May-18-17, 03:33 PM

Originally Posted by EGrant

I don't sympathize with people who aren't paying taxes, but this is clearly a result of the real issue, the high cost of auto insurance in Detroit. This will continue to stunt any growth the city sees. I know a ton of people evading taxes because of this.

Of course, if you can afford that sweet pad in the Broderick but you can't afford auto insurance, move to Berkley and Google some advice on spending habits.

If people are found to be doing that, wouldn't they be guilty of insurance fraud?

If you live in the city but use a suburban address to get lower rates, that seems to be something that would cost you much, much more if caught.

**Meddle** · May-18-17, 03:37 PM

Oddly enough, I got the benefits of this legally. I lived in the city on a border street. Because of the way the mail routes were set up, I had a suburban Zip Code. I submitted my street address and Zip Code and because rates were based largely on Zip Code, I got much lower rates. I paid city income and property taxes though.

**Bham1982** · May-18-17, 04:11 PM

I'm skeptical there are that many people doing this. For one, it's insurance fraud. For another, practically everything related to your credit record is tied to your residence.

I can't imagine someone would be super pro-Detroit, living right downtown, probably a nice career, a lot to lose in life, and then willing to commit insurance fraud and risk their credit record just for some extra monthly pizza/beer money.

Also, what is that article even talking about? The Penobscot Building doesn't have residents. Somewhere like Broderick Tower is full of corporate apartments, so obviously the tenants aren't really residents. Lots of apartments downtown are crash-pads for execs, temporary homes for consultants and the like. Probably not too many are for longtime neighborhood renters.

**Zacha341** · May-18-17, 04:42 PM

Oh I've heard of people using suburban addresses with impunity like 'ok, this is what you do...' without hesitation! Or worse get temporary insurance and don't ensure beyond that. This in part is why there are so many hit and runs. Or we see cars abandoned when an accident occurs.

Then there are the newer cars crushed up, yet drivable still being driven in that state were the insured person would have had to car repaired with a few weeks. I saw a Dodge Charger no less than 3 years old with a crushed-in rear bumper and boot damage driven regularly like that.

Originally Posted by Bham1982

I'm skeptical there are that many people doing this. For one, it's insurance fraud. For another, practically everything related to your credit record is tied to your residence.

**EGrant** · May-18-17, 05:10 PM

Originally Posted by Meddle

If people are found to be doing that, wouldn't they be guilty of insurance fraud?

If you live in the city but use a suburban address to get lower rates, that seems to be something that would cost you much, much more if caught.

Honestly, I think this is so common that people moving from the suburbs to Detroit don't even think twice about it.

**Honky Tonk** · May-18-17, 05:43 PM

Originally Posted by Zacha341

This in part is why there are so many hit and runs. Or we see cars abandoned when an accident occurs.

Or why insurance rates are so high in the City. Add in the endless car theft, parts theft, vandalism, wreckless driving, and you have your answer. But again, the thread has taken another detour and is no longer focused on the original point of thousands living in Detroit and not paying taxes.

**mwilbert** · May-18-17, 06:13 PM

Originally Posted by Bham1982

I'm skeptical there are that many people doing this. For one, it's insurance fraud. For another, practically everything related to your credit record is tied to your residence.

It's only insurance fraud if you make a claim. I imagine most of these people just want to cover the "insured" base and figure they won't have a claim. If they do, and the insurer figures it out, most likely all that will happen is that the insurance company won't pay.

And what is the problem with having your credit record referring to your fake address along with everything else?

In any case, I imagine the amount of money the city manages to reap from this more aggressive approach will give us some idea of how common this type of behavior is.

**Bham1982** · May-18-17, 07:24 PM

Originally Posted by mwilbert

It's only insurance fraud if you make a claim. I imagine most of these people just want to cover the "insured" base and figure they won't have a claim. If they do, and the insurer figures it out, most likely all that will happen is that the insurance company won't pay.

Are we talking citywide or just this specific downtown population referenced in the article? Citywide, I could see this being an issue. There are a lot of desperate people living day-to-day. Downtown, I really would be surprised.

There is no logical reason for high income people to drive around in essentially uninsured vehicles. There's even less reason to have a fraudulent address connected to your credit rating; this would likely prevent one from getting a conventional mortgage.

How many urban professionals are willing to forego owning a home in exchange for cheaper car insurance? I just don't see it.

**Richard** · May-18-17, 10:13 PM

Originally Posted by Honky Tonk

Or why insurance rates are so high in the City. Add in the endless car theft, parts theft, vandalism, wreckless driving, and you have your answer. But again, the thread has taken another detour and is no longer focused on the original point of thousands living in Detroit and not paying taxes.

The thread title does not match the article which mentions those living and or working in the city,which is why they mentioned the Penobscot building.

**MikeyinBrooklyn** · May-18-17, 10:24 PM

mwilbert, it is insurance fraud even without making a claim. You sign a legally binding contract attesting to the statements of fact [[including residence) being true. You are knowingly engaging in a deceit of an insurance company as soon as you purchase insurance with incorrect or incomplete information. Also, since you are legally required to have auto insurance to drive on Michigan public roads, and your insurance is technically invalid [[if caught) due to your perjury, you are also driving without insurance. And keep in mind that, in the event of an accident, another driver's insurance company and law enforcement will contact your carrier, making it almost impossible to "not report" a claim.

**GMan** · May-19-17, 05:27 AM

It's insurance fraud. Tax Fraud and sometimes voter fraud.

**Cincinnati_Kid** · May-19-17, 10:08 AM

Lower the insurance requirements for No-Fault medical treatment, [[one of the reasons Mich has the highest car insurance in the nation) and some of those things, along with greedy lawyers, go away. It's why you see a multitude of hit and run accidents, where the perps take off after a collision, whether it's life threatening or not. 90% of the time, they either have a suspended license, or no insurance. Still doesn't mean everyone will purchase car insurance in Detroit, but make it somewhat affordable for most. No way a person driving a older vehicle or "beater" should be paying as much or more, as someone driving a newer car. Utterly ridiculous.

**Wesley Mouch** · May-19-17, 10:18 AM

Sure its fraud. But say you live on the east side of Five Points. Work in Northville. Do all your shopping at Twelve Oaks. Is it just to be charged Detroit insurance rates?

Conversely, why does someone living in Grosse Pointe and working downtown not pay Detroit rates?

Address is an imperfect proxy for risk.

To some degree, paying Detroit insurance can be support for racism. Don't tell me its not a microaggression to set different rates. Might even a macroaggression.

**Gistok** · May-19-17, 11:17 AM

Wesley.... look at it this way... when you call 911 in the Grosse Pointes because someone is breaking into or stealing your car... you can expect a less than 5 minute police response time... thus greatly increasing the chances that an insurance payout will be minimal.

In Detroit... I don't know what the response time is... although much improved... so I tend to think that your 911 call is being prioritize behind more serious crimes... and the likelihood is that with a longer wait... the auto insurance payout is going to be much much more than it would be in the Grosse Pointes.

**mwilbert** · May-19-17, 11:26 AM

Originally Posted by MikeyinBrooklyn

mwilbert, it is insurance fraud even without making a claim. You sign a legally binding contract attesting to the statements of fact [[including residence) being true. You are knowingly engaging in a deceit of an insurance company as soon as you purchase insurance with incorrect or incomplete information. Also, since you are legally required to have auto insurance to drive on Michigan public roads, and your insurance is technically invalid [[if caught) due to your perjury, you are also driving without insurance. And keep in mind that, in the event of an accident, another driver's insurance company and law enforcement will contact your carrier, making it almost impossible to "not report" a claim.

I am not a lawyer, but I have signed a lot of forms. As far as I can tell, signing a contract stipulating things that you know are not correct is perjury, not fraud. Maybe someone could correct me on that. I'm not saying that these people are doing anything that is OK. I'm saying they don't see it as being as serious as it is, and think that there is likely not to be a problem. Most people go years and years without a claim, no? They just think the odds are with them. If things go wrong, then, yes, there could be a number of quite bad consequences, but most likely, they just have to pay the damages. Which could be a lot, so this isn't a great idea in my book, but people do dumber things all the time.