  Sandyrabbit Member Username: Sandyrabbit Post Number: 8 Registered: 02-2008 |
my bosses property tax went up from 4 grand a year to 22,000 in one year. now i know that 4 grand is low but a jump of 18 thousand dollars seems a bit ridiculous. does anyone know of any class action suits that may have already started against the city for this? i know of one property owner who took it to court, it got him nowhere, but i think if a large group tried it may make a difference. the problem on our end is, we have always been able to keep rents reasonable . this makes a rent hike burden on the backs of tenants. i forgot to mention the poor service we get from the city even though we had the hike. what is it they are using all this money for? it sure as hell isn't to keep us safe, pothole free or garbage free. anyways. just a rant. i am sticking it out here, but i don't own property. why are they chasing away the handful of decent property owners in this city? | ||
Gazhekwe Member Username: Gazhekwe Post Number: 1625 Registered: 08-2007 |
Did he refinance? If so, he might have gone to the current tax base instead of the Headlee base, was it 1996? (Message edited by gazhekwe on March 01, 2008) | ||
Sandyrabbit Member Username: Sandyrabbit Post Number: 9 Registered: 02-2008 |
no refinancing. its happened to other property owners as well here in the corridor. no it was at the most 2 to 3 years ago. thanks for the response.  | ||
Lefty2 Member Username: Lefty2 Post Number: 1325 Registered: 07-2007 |
I think what this state needs is a Prop 13 style proposition on the next ballot. It is called legal thievery and Detroit politicians could care less what your taxes are or chasing people away. | ||
Sandyrabbit Member Username: Sandyrabbit Post Number: 10 Registered: 02-2008 |
no doubt, i don't want to sound to much like a moron, but what does prop 13 state? | ||
Gazhekwe Member Username: Gazhekwe Post Number: 1626 Registered: 08-2007 |
Then it sounds as if the assessments have been raised considerably in anticipation of increasing property values. If that is the case, the owner(s) need to appeal excessive assessments. Be prepared to show that property values do not match assessed values. Appeal procedure is given on the assessment notice. Raising property taxes happens with "gentrification." | ||
Lefty2 Member Username: Lefty2 Post Number: 1326 Registered: 07-2007 |
"People's Initiative to Limit Property Taxation," AKA "Jarvis-Gann Amendment," in California http://en.wikipedia.org/wiki/C alifornia_Proposition_13_(1978) | ||
Viziondetroit Member Username: Viziondetroit Post Number: 1463 Registered: 11-2003 |
I'm not all that well versed on property taxes etc but did he buy a 2nd house and it be listed as his primary residence? I know if he bought a 2nd house and its listed as his primary residence then his current house property taxes will raise as it would be considered an investment property and he loses the great tax rate he was grand fathered into. What area is your bosses house located? | ||
Sandyrabbit Member Username: Sandyrabbit Post Number: 12 Registered: 02-2008 |
well goodness! thank you soooo very much for taking the time to do that for me. if this bandwagon already exists do you know where i can get on? or should i start my own? once again lefty i really appreciate the information, i will be sure to pass it on... | ||
3rdworldcity Member Username: 3rdworldcity Post Number: 1043 Registered: 01-2005 |
Going from $4,000 to $22,000 absent a change in ownership and the resultant lifting of the cap is not possible. The cap was put on in '94 and limits yearly increases to, as I recall, the lower of 5% or the cost-of-living increase. Refinancing has no impact on taxation as long as there is no ownership change. The owner must have substantially improved the property by expanding its size , for example, and the value of the upgrades would be justification for the value of the upgrades to be taxed. I just got my '08 assessment and it went down by $7,500. | ||
Monahan568 Member Username: Monahan568 Post Number: 280 Registered: 04-2004 |
sandy, look and see if you are paying for other services in your taxes i own a building to and the city is now charging for trash collection basic collection not bulk. if that is the case you can opt out of the city trash pick up and get a private company like waste management and your taxes should go back down to what they were | ||
Sandyrabbit Member Username: Sandyrabbit Post Number: 13 Registered: 02-2008 |
we already changed to waste management garbage removal..nice guys. hmmm change in ownership. my boss bought the building about 8 years ago. i wonder if it took a moment. no new improvement, wait new windows 2 years ago, but nothing with size. neighboring property owners taxes increased dramatically as well. someone with a 6 unit is now paying like 10 grand per year. thanks for all the response. | ||
Viziondetroit Member Username: Viziondetroit Post Number: 1465 Registered: 11-2003 |
^^ u didn't mention before it was a multi-unit property unless I missed it. | ||
Sandyrabbit Member Username: Sandyrabbit Post Number: 15 Registered: 02-2008 |
yes, it's an old 50 unit in the corridor. rents range from 350 to 475. and we would like to keep it like that ya know? it's hard enough on people these days with the economy. i really don't want to lose our hard working folks and the retirees. they make it home. lack of community creates chaos. what is wrong with these people? | ||
Kevgoblu Member Username: Kevgoblu Post Number: 63 Registered: 02-2007 |
A better question might be how did a 50 unit building (non-homestead) have a tax assesment of only $4K? What's the building's value? I'd say your boss was getting by for quite a while and should just be happy it lasted as long as it did. If the average rent is $400, that could generate $20K / month. With a tax obligation of $333. I don't know anyone who likes high taxes, but I don't think he has anything to complain about. | ||
Sandyrabbit Member Username: Sandyrabbit Post Number: 20 Registered: 02-2008 |
i should have been more specific the complaint is.. how high it went in one 1 year. i had mentioned earlier that it should have been higher, but the amount of the increase was ridiculous, especially when you consider we are not getting anything we need done for those tax dollars. when our street lights go out it take months to repair. etc. streets plowed, clogged drains blah blah blah blah i could on and on. i wouldnt say the average for the building was that. those are the new rents. which cover about half the building we also have people grandfathered in at 300 per month or less. and these are the people i am concerned about it affecting. when you consider all the extra safety extras the property owner can expect to pay for to keep everyone safe, it just seems unfair. sure some people bought land here for lower taxes, why wouldnt they? it takes a big set of something to take on such an task. if it was that easy though everyone would be doing it. we must remember that just because someone may say a property is worth a certain amount that does not mean that that is what they make off of it. he's not one of these types that bought the place, kicked everyone out and made a bunch of overpriced lofts . i am happy to be a part of a community that people can actually afford to be a part of. perhaps i am being selfish. i don't want to lose my job. i don't want my neighbors to lose their homes. if another tax increase comes in march like its supposed to. and it it sky rockets again. well that may just happen. whatever his reasons are for being uncomfortable, everyone else must share the burden. thanks for the input though. i thought of that. skating by for so long. but not really, he has made the place very comfy for us. he's not a total letch. | ||
Kevgoblu Member Username: Kevgoblu Post Number: 64 Registered: 02-2007 |
Take a look at the Michigan Property Tax Estimator. https://treas-secure.state.mi. us/ptestimator/PTEstimator.asp If your boss was paying 4 grand a year, then based upon the tax rate for a business (83.96)the building had been assessed at a taxable value of about $48,000. Not bad for a 50 unit complex. Yeah, the big increase sucks, but in reality he was cheating the city for 'X' number of years | ||
Sandyrabbit Member Username: Sandyrabbit Post Number: 21 Registered: 02-2008 |
about 12 years ago you could have bought it for not much more than that. just like you could buy a rather large house for about 16,000-20,000. my complaint, although property assessments rise. the neighborhood gets no better. who is cheating who? if the city was run right it would have been a gradual increase the complaints would have been at a minimum. if he raised rents from 200 to 2000 bucks a month, we could not use the argument, well you have been getting away with paying this cheap of rent for x amount of years. so deal with it. you could but i tell ya i would think they would all beg to differ, and they would not feel they were cheating anyone. thats what they were used to paying. i said it on an earlier thread. i know it takes money to make money, and it should. but there is a way of going about things, and way of going about them. i don't own this property, it is not money, ends up being my headache all parties considered. i shouldnt care, but i do. sigh | ||
Lostlegumes Member Username: Lostlegumes Post Number: 22 Registered: 09-2007 |
I can't be alone when I say that my home value went down, but my property taxes went up! | ||
3rdworldcity Member Username: 3rdworldcity Post Number: 1044 Registered: 01-2005 |
Sandyrabbit: Try to understand this. The tax bill didn't go from $4000 TO $22,000 in one year unless there was a change in ownership or the owner made substantial improvements (not including repairs or replacement) to the property. Raising the rents has no impact on the property tax assessment or the amount of taxes paid. Can't happen. Didn't happen to anyone else in the neighborhood either. Increases are governed by statute and by the formula I mentioned above. You don't have all the facts, apparently. | ||
Eastsiderules Member Username: Eastsiderules Post Number: 33 Registered: 01-2008 |
Lostlegumes you are sooo right. | ||
Mikem Member Username: Mikem Post Number: 3596 Registered: 10-2003 |
Are you in an NEZ where the tax abatement expired? | ||
Douglas_johnson Member Username: Douglas_johnson Post Number: 71 Registered: 02-2008 |
Dear Concerned Detroiters: I am currently finalizing a lawsuit that will be filed in U.S. District Court this week which you may want to join. It will, but not be limited to, addressing the formula and procedure used by the City of Detroit when assessing residential properties. If you are interested in participating please feel free to contact me at djohnson@awscare.org or elect@douglasjohnsonforchange. com. The pleadings filed in that case will be available for your review at www.douglasjohnsonforchange.co m. Have a Blessed evening, Douglas Johnson | ||
Sandyrabbit Member Username: Sandyrabbit Post Number: 22 Registered: 02-2008 |
not what i am saying, rent is raised because taxes were raised, not the other way around. you may be right, i may not have all the facts, but i am tellin ya something feels wrong, you don't know me and i don't know you, but i assure you i am not an idiot. wether i have terminology right or not, i have been running this space for 6 years, and only having †ř evict one through court, because of how i relate to beings, not all the other jazz. this tax thread was created to gather those who somehow feel screwed by whats going on, i am yet a vessel, and if you notice i was asking a question, if anyone feels what we are feeling, now if they do, i can not be all that wrong. i am new here, and i don't blame you for wanting to kick me in my most hurtful areas, but i am just trying to find a forum where someone may know what we are going through, so for i have not found this, i have found people who assume i am not in the right because i work for a property owner. i love my job because i am almost comfortable in a situation where i can keep tenants happy as well as the boss. which would not be possible if my boss was horrid. i have been an advocate for the mentally ill for half of my life. this in no regard is a selfish bitch and moan thread. something weird is going on. am wondering though, if i am not allowed to speak what i feel here. we are all jaded i am sure, does not mean in the slightest that my curiosities are wrong. i don't waste my time with wrong. i do not expect any of you to know me or where i am coming from. but i think for the most part that people are constantly trying to play devils advocate here, and that is silly. a forum should be about new ideas. and not a struggle to stifle them. i am not an idiot, i may not know all the jargon, but i know what i feel and that means something to me. it's kept me alive. so forgive me if i tell you to read what i am actually saying and not what you think you should be reading. tell me to leave this site and i will. dont care regardless. especially if two people gave me answers and 5 gave me opinions. your opinion is worth what mine is. nothing. just give me answers. you know what i am asking, sorry if i don't know all the data. i asked if there was a class action suit, didnt ask if you thought my boss was a rapist of the soul. he pays for my college by they way, sorry to be horrid but jeeeez oh petes how hard is it to get a straight answer in this place without getting judged? if i wanted this drama i would have stayed up north. =still love yous by the way, but am not changing this thread. thank you last poster. once again ask me to leave and i will. this is new to me so i will be over it. | ||
Terridarlin Member Username: Terridarlin Post Number: 57 Registered: 02-2007 |
Sandyrabbit, It's wonderful that you're so passionate about your job and the tenants. Assessments can be appealed in two areas: A mistake in the assessment of the property or an assessment at a higher rate than comparable properties. If your boss chooses to fight it, it will take a lot of preparation before presenting your appeal to the board. Sit in on someone else’s hearing before your appeal date. Here you'll see how the board operates, and you'll also find out what works well and what doesn't. Your boss could hire a property tax consultant or attorney. Many consultants charge on a contingency basis, they'll take a percentage of the savings if they succeed on lowering the assessment. Good Luck | ||
Mwilbert Member Username: Mwilbert Post Number: 113 Registered: 11-2007 |
Was a post deleted? I don't understand what Sandyrabbit is reacting to. My impression is that I think people are sympathetic, but don't understand how what happened to your building owner happened. If the facts are as you stated them, then the owner should take action to have the tax bill corrected. I think everyone on the board wants to see functioning buildings in the city, and not to see them taxed into oblivion. | ||
Magnasco Member Username: Magnasco Post Number: 242 Registered: 10-2003 |
3rdWorldCity has it right on this one. The property taxes could have only raised like that in one of two ways. Either the property was sold or refinanced (and then it usually takes a tax cycle of over a year to see the increase in value because it has to wait for the end of year appraisal) or the improvements were made and the city re-assessed because of it. There would have had to have been some pretty serious improvements to make up that kind of difference. So, either the property taxes didn't increase in the way you think they did for whatever reason, maybe the landlord is pulling your chain or mistaken or whatever, or they did go up and it is because of a sale or refinance within the last two years. Even if the property had lost its homestead exemption it would have only gone up by between 10 to 15 mils which wouldn't have accounted for this number. But as far as the tax issue goes, the uncapping of values due to the Proposal A in the 1990's is a problem that is hitting all areas, city and burbs alike. It needs to be repealed and it is likely going to see some work in the coming year or two now that it is negatively impacting the burbs. They were all for it when it was keeping them from having to pay higher taxes while their properties were increasing in value 10+% a year but in this market it is a different story. | ||
Ladyinabag Member Username: Ladyinabag Post Number: 417 Registered: 03-2007 |
It's Capitalism. You have to pay to live, as well as the people who are running it have to get paid. The money has to come from somewhere.....just like you had to pay that 8.2 mil. for Kwame. It was your money. Do Kwame supporters get this yet? I still don't think so. | ||
Pgn421 Member Username: Pgn421 Post Number: 464 Registered: 02-2005 |
with a lot of houses in foreclosure, the tax base will be down.The money has to come from somewhere. Lets raise everyones taxes, | ||
Fnemecek Member Username: Fnemecek Post Number: 2731 Registered: 12-2004 |
quote: $4 grand for a 50 unit property??? Sounds like you were getting one heck of a deal for years. The blue light just got turned off. | ||
Magnasco Member Username: Magnasco Post Number: 243 Registered: 10-2003 |
Actually as a few people noted here, the city went ahead and lowered the value of many properties on the current round of assessments. The problem was that they didn't lower them enough. But Pgn421 is right that the money has to come from somewhere, and again this is one of the proposal A issues. While new sales since Proposal A uncap a property for assessment purposes, the properties that have not turned over since then are capped at a minor statutory increase per year equaling just a few percent. The statistic in the city is that something between 70 and 80 % of the homes are valued at under $22,000 for tax purposes, at least that was the number a few years ago. Part of the reason is that most of those homes have not sold. And for tax revenue purposes they needed to sell when values were heading up. If a new or used home in Detroit sells for around $200,000 (which gives it a $100,000 taxable value), it is in the top 5% as far as home values in the city, meaning 95% of the homes are worth less than that. And the property taxes on that home, without any NEZ's in place are around $7500.00. Even with the Neighborhood NEZ, for a used home, the taxes are only decreased to around $6000.00. And that's assuming it's homesteaded. Yet, the person living next to you, and who is paying $1200 in taxes, for example, for the same house, complains that they are getting screwed when the city implements a $300 garbage fee across the board rather than increasing the mils to cover the short fall. Of course, they would rather see the higher assessed properties disproportionately pick up this expense. Those lower tax payers would complain about a regressive tax that negatively impacted them, but they are all for one that adds more burden to the higher valued properties. I go through all of that because I am all for taking care of the needy and all of that, but this property tax thing isn't based on that. The line it creates is between those who have owned the property for a long time and those who have not. My neighbors may have the same job and the same income, but if they purchased before Proposal A then they may be paying 1/6th of the taxes I am paying to run the city. In some of the suburbs where the home values were already high in 1996 when the caps came in, this isn't a big problem. But for Detroit where values were extremely low at that point, it is devastating. This is one reason the City can't get rid of the income tax. It generates desperately needed dollars. If I'm not mistaken, its something like $300 million. That's a huge chunk. Well, I'm done for now. Off to bike in the "warm" weather. | ||
7051 Member Username: 7051 Post Number: 76 Registered: 02-2006 |
A city assessor that I spoke to last summer told me that 50% of all residential properties in the city are paying $1,000 or less in property taxes! This is exactly why some of us on this forum pay anywhere from 2 to 18 times this amount. Plus the fact that only 350,000 of 500,000 residential units (at the city's peak) remain. This assessor told me that the neighborhood NEZ's that were recently enacted would alleviate SOME of this burden. Non-residential (i.e. commercial) property tax rates were going to be the next problem in line for a solution (reduction) according to this same assessor. | ||
Sandyrabbit Member Username: Sandyrabbit Post Number: 23 Registered: 02-2008 |
first and foremost brothers and sisters, thank you for even taking note. i have re read this entire thread, and was, i believe, expecting to be attacked, so when a few did, i rode it all the way. i would like to say, and i know it is my choice to live here, that there is a huuuuge difference for what you get for your taxes paid, and what we do. our streets are filthy. can someone come up with a groundbreaking idea where people that are shunned are actually rewarded for helping keep their streets clean? do you know how many drive by nighters that i have seen throw their trash where ever they see fit cause it just don't matter? i have seen one limbed neighbors kneel and clean.they blame no one they just clean. i just get sooo freakin tired of people who are paying taxes in their own cities that don't have a gd to do with downtown but claim it does. if it did, i wouldn't get harassed by suburban police cause i don't drive a saab. and here's what pisses me off, the minute they find out i am from detroit, i get ridiculed. insulted, asked what i am doing in the burbs. i get searched for drugs, threatened to have dogs come search me and have to take my socks off in the middle of winter so that they can see if i have needles hidden between my toes. yikes, what crap, i will tell ya most of the drug users i have ever met, the ones that can afford them, are from the burbs, not from here...i tend to stay away from that circle. learned that like i learned not to disrespect anyone one walking by me. i want the best for this place. am running out of will power, cause i am always this close to be proven wrong. but as someone who has had most of the people she has ever known turn their backs (small up north town) this place embraced me, my pain, my everything. that means something. if you are paying taxes for detroit as someone who does not live here, then you should expect more. you don't just belt out hatred, you should actually do something. cause all these people you hate,are not getting anything from what you believe you are paying, if they did, would it really be this crappy? would you have anything to look down on? one of you stated stuff could be going on and i am in the dark, that is what i would agree with. i may be. probably am. but it doesnt matter, what matters is that i have to find a way to keep my old timers comfy till they depart. thats all i want. believe it or not, this may be the only chance i ever get to be in a position where i can feasibly help someone. wether they hate me cause i am too young for this or not. i learned a long time ago to let go of resentment instilled upon you due to circumstance. people can't help how they feel. how can they? none of us asked to be here. i am completely overwhelmed by the actual academic knowledge that i have found at this site, the knowledge that i don't have is why i reached out. i do not blame you for questioning why i have a right to say anything at all. my only argument is that i live it. and you can know know know all the knowledge you are taught. i want to see it in use. i do rather well in school, and would love to go head to head with you in a real conversation where we are not hidden by pseudonyms, and where i can point in your face and say, do you pay my rent? cause you don't. be happy that all of us are comfortable enough in our lives to have enough time to banter about crap that obviously does not affect our everyday live. can't say our, cause mine and many more are affected, but i hope you know what i am saying. be happy to be you and not one of my 84 year old tenants wearing a crap bag, and secretly wondering if they will see tomorrow, to me all the rest means nothing. p.s. i was actually frightened to come back, i thought someone was gonna totally rip into me after my last post. but i believe in everyone here. wether you are angry or thrilled. you want something better. and what is better than that? i adore the last posters, thank you for not making me feel like a turd. (classy all the way sunshine) | ||
Lefty2 Member Username: Lefty2 Post Number: 1335 Registered: 07-2007 |
Has anyone seen the stupid NEZ areas and tax benefits the city and state has. It is mind dizzying. DETROIT HAS THE HIGHEST REAL ESTATE TAX RATE IN THE U.S AT 4.2% of 100% value (with the trash tax) They can't just lower the tax to an acceptable rate. I guess they don't want people to move in. They have to dole out incentives so they can pretend like they are doing something valuable. I've seen tax break incentives in different cities and I have yet to see any overall benefit to them. Only to a few people who would have most likely built something there anyway. | ||
Rfban Member Username: Rfban Post Number: 265 Registered: 02-2004 |
Lefty, It seems as though you really know your taxes--correct? I have a couple of questions, fist, how can the CoD tax a home 100%. That is, how does the SEV and "taxable value" come into play? Second, Where did you get your "4.2%" figure? | ||
Magnasco Member Username: Magnasco Post Number: 244 Registered: 10-2003 |
Lefty I am going to treat your statement as if it is a question and answer it. The city is afraid to "just lower the tax to an acceptable rate" because that would be a decision to decrease revenues to the city. As we see in the discussions with the most recent CAFR (financial report) coming out, the budget already had a bunch of "if-comes" in it that didn't fully come true and added to the deficit. That's what the revenue would be considered that we would expect to be generated from the uncapping of a property after the sale created from the lowering of the taxes. This "if-come" is like when the Mayor wrote into the budget the proposed sale of parks and the golf course before they happened. It is not a hard reliable figure, and the City is going to keep with the predictable figures for now. And Why? Well, in my humble opinion the problem is that they are committed to a lot of expenses they have no control over, namely the union contracts. They are losing their shirts on these and the protected union employees are in large part the few people living comfortably in the city right now. Police and Fire take up some insane percentage of the total budget. I would have to go back and look but I seem to recall its like 30 to 40 percent. Not a popular position, but it is where the money goes. | ||
Bulletmagnet Member Username: Bulletmagnet Post Number: 1019 Registered: 01-2007 |
Short answer to the posed question: NO! | ||
Fnemecek Member Username: Fnemecek Post Number: 2739 Registered: 12-2004 |
quote: The police & fire departments account for 39.4% of the general fund budget. The reason it's that high, however, isn't because of union contracts. It's because everything else has been cut to the bare bone. Recreation, for example, is at $17.7 MM for FY 08, down from $46.7 MM in FY 05. http://www.ci.detroit.mi.us/bu dget/2007-08_Budget/Summary/EB S_Summary_General%20Funds_%20S ection%20C_07-08.pdf As for why police and fire haven't been cut, I simply remind everyone that they are called essential services for a reason. I would also like to remind everyone that in most major American cities there is approximately 1 police officer for every 250 residents. In Detroit, however, the ratio is 1 police officer for every 413 residents. | ||
Magnasco Member Username: Magnasco Post Number: 248 Registered: 10-2003 |
Those are great statistics, but that ratio deosn't equate to officers on the beat. What's the rate of absenteeism on any given day, isn't it also close to 40% too? I bring that up because your argument seems to be that we actually need more officers at a time when cuts are being made to all other departments. I think we just need the ones who are being paid to do the job to be on the job and working. And, if other departments are being cut then maybe they need to take their share, as the biggest part of the budget. And this is all on topic, because its the inability to keep these union related costs in line that forces the city to keep the tax rates so high. Of course the argument can be made, and probably fairly so, that the city just wastes the money in other areas, but that doesn't keep my statements from being true, it just means there is other work to do as well. To paraphrase Rasheed, The Numbers Don't Lie. | ||
Gistok Member Username: Gistok Post Number: 6440 Registered: 08-2004 |
As long as the SEV is higher than the Headlee value on your home, your taxes will continue to go up, even if the value of the home goes down. This is most noticeable for folks who have owned their homes for many years, and have a big gap between the 2 assessed values on their taxes. It's only when the SEV goes below the Headlee value, that your taxes will go down. I've refinanced before, and it has no affect on your taxes. Major home improvement is another matter. I was just reading that many folks who have lived for a long time in Romulus are upset about the possibility of Eminent Domain for Airport expansion. One reason they are upset is that having to move to another comparable value house elsewhere will guarantee a tax increase, since the tax savings they have by living for a long time at a residence (i.e. having a bigger difference between the SEV and Headlee home valuations) will disappear when they have to buy a new house and pay taxes at the higher SEV rate. This negative side effect of Eminent Domain of long time homeowners really needs to be addressed by the state legislature. | ||
Fnemecek Member Username: Fnemecek Post Number: 2740 Registered: 12-2004 |
quote: I don't have statistics readily available for DPD and DFD absenteeism. I just know that Detroit spends a little more than half on its police and fire services than most other major cities do on a per resident basis. Regarding property taxes in general, if you really want to know what's driving those costs up in Detroit, it's not union contracts. A little more than 2/3 of our property taxes are dedicated to nothing more than debt service. We borrowed an enormous amount of money in the 1980s and early 90s. We're now struggling to meet those payments. There is also the fact that there are several square miles of land in Detroit that we can't collect property taxes on because it isn't privately owned and no one will buy it because the land in question is environmentally contaminated. Last, but certainly not least, is the issue of our liability costs. In the past year, we've spent almost as much to settle various law suits against the City as we have on our fire department. Clearly this needs to brought under control. | ||
Swingline Member Username: Swingline Post Number: 1042 Registered: 11-2003 |
Some of the discussion in this thread has highlighted once again the structural property tax problem that has plagued Detroit for a long time. It's just one person's opinion (and I probably mention it too often in here), but contrary to what lots of others claim, the tax system created by Proposal A isn't the source of the problem. The problem is that Proposal A locked in chronic underassessments of properties inflicted on the city courtesy of two decades of the Coleman Young administration. Focusing just on residential transactions for the moment, one could ask any real estate professional involved in Detroit properties in the 1975-1995 era and they could confirm that SEV's were routinely only 15-25% of sales price during that period. Under the pre-Proposal A system, property taxes were calculated by applying a municipality's millage rate to a property's SEV. SEV's were supposed to be 50% of fair market value in any given tax year. Thus, given the assessment situation in Detroit, for tens of thousands of properties the city was only collecting half or less of what it should have collected. In order to pay for the ever increasing cost of city government during this era, the city maxed out its bonding capacity and simply increased millages to pay for it. Of course, millage increases had to be larger than necessary because the under-assessments generated fewer dollars per mil. By the mid-1990's, Detroit was a basket case of an underassessed "over-millaged" tax base. The under-assessments crippled the ability to generate enough tax revenue, and the excessive millages depressed property values. A vicious cycle to say the least. At that time, probably the healthiest thing for Detroit would have been a push to fix assessments combined with a slow weaning from the excessive millages as various bonding obligations expired. In other words, try to pay for government with a "truth in assessments" program. Proposal A superceded any of that and locked in the low assessments because as most know, assessments can now only be increased at the rate of inflation or 5%, whichever is lower. It's hard to find a solution to all of this. Ultimately, Detroit has to find a way to reduce its millage rate and get it more in line with its suburban neighbors. | ||
Urbanpioneer Member Username: Urbanpioneer Post Number: 37 Registered: 10-2007 |
That tax rate might actually be appropriate. Here is the rough math: Apartment building is sold for $600,000. SEV is about $300,000. $300k at 70 mils is about $21,000. Who knows what sort of odd land-ownership deals were being made. But let's turn it around this way: if this is a a 20 unit building and each unit pay $300 a month in rent that's $6k a month income or $74,000 a year. For each $100k of a mortgage is $600 a month in payment --- that's $3k a month mortgage payment, $2k a month in taxes _ and he's still making money. Maybe not as much as before, but he's making cash. But here's a really weird comparison: Looking at property in seattle. A $1.5 million water-front property had taxes of I think less than $5,000 a year --- same as a $200k house in Detroit. | ||
Troy Member Username: Troy Post Number: 219 Registered: 10-2003 |
Sandyrabbit you keep stating that it is unfair to have to pay that much in taxes due to the services received. You are getting crappy services due to the fact that so many people are underpaying like your building or not paying at all. For your reference there is no way you could have buought a 50 unit for anywhere close to that tax assessment 12 years ago. I feel that it is about time they caught up to you. I bought 11 years ago in the corridor for $100,000 on a single family. My assessment was for $42,000 and I was paying around $2600 in taxes by myself at that time. I have the same services you do but know that if everyone paid what they should our services would be better. I for one am glad they are catching up on you. | ||
Ffdfd Member Username: Ffdfd Post Number: 265 Registered: 09-2006 |
quote: If you would have clicked on Frank's link you would have seen that the police and fire departments have been cut substantially: 2004-05 budget: $470M (DPD), $205M (DFD) 2006-07 budget: $394M (DPD), $170M (DFD) Uniform positions (DPD/DFD): 2004-05: 6,006 2006-07: 4,694 quote: One of the biggest problems DPD has is it spends a lot of money to train officers for other departments. Recruits get on with Detroit, get a few years experience, then jump to the burbs or the boom towns because the pay is better in those places. | ||
7051 Member Username: 7051 Post Number: 80 Registered: 02-2006 |
Please take a look at suburban city budgets. Their budgets usually allocate 55-65% of their general fund on police and fire vs. Detroit's 35-40%. Even so, 90% of their police and fire are understaffed by national standards(2 on an engine/ladder truck, and 1 person police vehicles are their staffing levels-fortunately crime and fire loads are low). Many of their tax bases are based on residential which tends to be lower tax generating than commercial, industrial, etc. per square mile. Therefore, a smaller total budget will have spent a higher percentage of itself on any particular department. Detroit can and needs to spend a higher percentage on police, fire/ems, dpw and recreation. Give the lighting dept. away, cut 80% of the health dept and allow wayne county's •••. to do its job, drop DDOT and go regional(thus spending a smaller amount with the "new" RegionalDOT, cut mayor/city clowncil 65%, recycle, and cut other fat (20% form the TOP of all department's(cut's at the top have not take place EVER-admin costs are too high according to all outside studies)). We've just come up with 200-300 million extra for the city's 4-5 core services and to drop prop taxes 50% to ALL! |
