For the first time in 17 years, residential property values in the city of Detroit have experienced a net increase, according to a report by the city. The 2018 assessment of city residential properties is up to $3 billion from 2017’s assessment of $2.8 billion and while this is certainly an indication of the Motor City’s progress and development in recent years, there’s still a long way to go to get back to 2008’s assessment of $8.8 billion. Of the city’s 263,000 residential properties, 31% saw an increase of 0.1-5%, 28% saw an increase of 5.1-9.9%, 15% saw an increase of 10-14.9%, and 4% saw an increase of 15-21.4%.
Detroit’s commercial and industrial properties also enjoyed an increase in 2018. Assessments of commercial properties came in at almost $3 billion and industrial properties climbed from $314 million to $513 million from last year to this year. Mayor Mike Duggan was optimistic as he voiced his opinions on the matter: “This is another sign of progress. We still have a long way to go to in rebuilding our property values, but the fact that we have halted such a long, steep decline is a significant milestone…This also corresponds with the significant increase in home sale prices we have seen in neighborhoods across the city.”
Detroit’s property value net increase also means an increase in property taxes levied by the city. Property taxes are set to increase by 1.02% at the most for 2018 meaning “an owner of a home with an assessed value at $100,000, on average, might expect to see an increase in their taxes this year of about $67.” Chief Financial Officer John Hill is optimistic in his hopes for increased property tax collection following an average of 69% in 2012-2014, 79% in 2015, and 80% in 2016. The rate of collection for 2017 is predicted to be 82% which, along with the property tax increase, will mean more funds for a city expected to shed state financial oversight this spring.
By Jared Hoffman
Research Associate, JMJ Phillip Group