Downriver Today

The City of Detroit recently announced that residential property assessments increased by an average of 31% per neighborhood in 2021, according to projections based on a sales study and analysis of property values.

According to a Jan. 26 release, Mayor Mike Duggan made the announcement as the city mails out its proposed assessment changes for this year. This is the fifth-straight year of growth in the city, based on the past two years of market sales.

“This steady rise in property value is a reflection of ongoing improvements in neighborhoods such as blight removal, park improvements, commercial corridor upgrades, and other key city services,” Duggan said. “Home values in nearly every neighborhood are rising and helping to build new wealth, without significant tax increases. These numbers show that while there is still a lot of work to do, the city’s revitalization has reached nearly every corner of our city.”

The announcement said that while property values have increased at a steady rate, homeowners are protected against large property tax increases. According to state law, the annual increase in property taxes has a cap at the consumer price index or 5%, whichever is lower. This is until a home is sold and then the cap is lifted so the taxable amount is adjusted to the State Equalized Value.

The city examined from April 1, 2019, to March 31, 2021, for actual market sales. This included 60,704 transfers including market sales, quick claim deeds and land contracts. Of this amount, 14,200 met the definition of market value, which were used to calculate the tentative assessments for this year. 

Assessments from 2019 show that the residential properties gained $400 million in value compared to the previous year. Proposed 2020 assessments show the residential property class grew by more than $600 million. This puts the residential value of more than $1 billion over two years, which was a 35% increase in residential property value. There has also been an increase of $500 million in residential property value from 2021 to 2022, which is up 11.3%

According to the data of 208 neighborhoods in the City of Detroit, 21 had an increase of more than 50%, 91 had an increase of 49-30%, 85 neighborhoods increased in value from 29-10%; six neighborhoods increased 9-1% and five lost value but none greater than 6%.

Proposed assessment notices have been sent, and appeals must be done before Feb. 22.