Detroit Residential Property Values Rise 12 Percent in 2018
Residential property values in Detroit rose an average of 12 percent in 2018. Commercial property values increased by an average 35 percent.
Image courtesy of the city of Detroit
Residential property values last year rose across more than 90 percent of Detroit’s nearly 200 neighborhoods, says Detroit Mayor Mike Duggan. It is the second year in a row that values have increased — with a 12-percent average rise in value citywide last year.
Several neighborhoods saw increases of more than 20 percent. The numbers come from the City Assessor’s Office as part of its annual proposed property assessment changes and are based on two years of market data, which included nearly 11,000 valid arms-length transactions, a 16 percent increase in activity from the last year’s assessment.
“These new numbers represent a historic shift for our neighborhoods, which for nearly two decades had seen only a decline in home values,” says Duggan. “This shows that the work we are doing to remove blight, improve parks, and revitalize commercial districts in our neighborhoods is paying off.”
According to the assessor’s data, in 2018 the city’s class of residential properties gained more than $400 million in value compared to the year before. Last year, the city announced a citywide increase of five percent for 2017. Before that, residential property values in the city had dropped annually for 17 years, including a nearly $1-billion drop from 2013-2014.
Meanwhile, property taxes will not see sharp increases. Under state law, the annual increase in property taxes is capped at 1.02 percent (when Prop A was passed in 1993 and took affect in 1994, annual residential property taxes were limited to five percent or the rate of inflation, whichever is less). The cap is only lifted with property transfers, at which time the taxable amount will adjust to the State Equalized Value the year following the transfer.
Of 194 neighborhoods:
- 52 (27 percent) had an increase in value in the range of 1-10 percent.
- 100 (52 percent) had an increase in value in the range of 10-20 percent.
- 24 (12 percent) had an increase in value in the range of 20-40 percent.
- Two (1 percent) had an increase in value above 40 percent. The Midtown and Brush Park areas had large increases due to transitions in use and new construction.
- 16 (8 percent) had a decrease in value of 1-15 percent.
On the commercial side, a recently completed citywide reappraisal showed a 35 percent increase in value, bringing the assessed value for all commercial properties up from nearly $3.0 billion to more than $4.5 billion. Most of the growth occurred in the city’s core.
The reappraisal was the first on commercial properties in decades.
“This sends a clear message that Detroit is a good investment,” says Duggan. “There is a great deal of activity taking place in our neighborhood commercial districts, and we expect these values to continue to rise.”
While there are more residential properties in the city, the commercial and industrial classes of property contribute the largest share of the city’s property tax revenue each year, says Dave Massaron, Detroit’s interim CFO.
Notices are being mailed this week to the city’s 270,000 residential and industrial property owners advising them of their proposed assessments for 2019. Bills will be mailed in July, and payments will be due Aug. 15. Commercial property owners will receive their notices later due to the completion of the commercial reappraisal.
All property owners have the right under state law to appeal their proposed statement, and the city of Detroit offers an informal opportunity to appeal property values. The Assessors Review appeal process will take place Feb. 1-15 in Room 804 of the Coleman A. Young Municipal Center, located at 2 Woodward Ave. The March Board of Review, the second step in the review process, is from March 6-23 in Room 1208 of the Coleman A. Young Municipal Center. Anyone with questions or wishing to challenge their assessments can email the assessor’s office at email@example.com.
Residential property owners must begin the appeals process at the Assessors Review. Commercial, industrial, and personal property owners may choose to proceed directly to the Michigan Tax Tribunal. The deadline to appeal directly to the Michigan Tax Tribunal is May 31.
The Assessor’s Office will mail applications for the Homeowners Property Tax Assistance Program to all Detroiters who are delinquent on their 2018 property taxes to determine whether they qualify for tax relief. Homeowners can find more information or receive an application by calling the Office of the Assessor at (313) 224-3035 or the Detroit Board of Review at (313) 628-0723.