  Sparty06 Member Username: Sparty06 Post Number: 123 Registered: 03-2007 |
San Francisco and Boston turned things around by reducing governments burden. Detroit can too. It is already widely acknowledged that lower property taxes spur investment and growth, witness the rise of NEZs in Detroit. We should consider making the entire city of Detroit a NEZ. http://online.wsj.com/article/ SB122852270789884347.html | ||
Glowblue Member Username: Glowblue Post Number: 41 Registered: 09-2008 |
Yase, Detroit's problems with its underfunded police department and school district will surely be solved with less funding! | ||
Sparty06 Member Username: Sparty06 Post Number: 124 Registered: 03-2007 |
The idea would be to create self-sustaining economic growth that ultimately pays for itself in the long run when the city stops losing residents every year and starts gaining them. | ||
Danindc Member Username: Danindc Post Number: 5296 Registered: 10-2003 |
So how does this mechanism work? Do you just lower property taxes, and development magically happens? Perhaps if property taxes were the only factor hindering development, I could believe this. It's not exactly as if the existing Enterprise Zones in Detroit have been wildly successful. San Francisco and Boston have a particular problem that Detroit most decidedly does not: extremely high property values. When Detroit has an average home price exceeding $400,000, then we might consider the same paradigm to apply. | ||
Detroitplanner Member Username: Detroitplanner Post Number: 2044 Registered: 04-2006 |
I would agree that the City's tax structure, as well as pitting neighborhoods against each other based on questionable criteria is hindering stabilization and development. Would it not be better to get rid of all NEZ's and concentrate on how to do two things: Lower the costs of providing services, and the taxes paid to provide those services? I think it is utterly bizarre that I live in an 800 square foot house next to a burned out shell and pay triple the taxes of someone who has a 2,500 square foot riverfront condo. The tax revenue from the casino was supposed to relieve the tax burden of the citizenry. Obvioulsy this never happened. Should we not question the why? If the City is serious about things, I would propose one thing first: either eliminating or sharply decreasing the income taxes first because those that itemize get a biggerbang for the buck from property taxes than from income taxes. It would also put Detroit on a more level playing field with many of the suburban areas that don't have a tax. This would also quicky stabilize the areas near places like Hamtramck because people will see advantages of living in the Detroit because Hamtramck has an income tax. The income tax is part of the reason why most middle income people move out and why our upper income population is so low. Maybe that is the way the politicos like it because only the poor and undereducated are left. It is often these groups that are most easily manipulated during election campaigns. Personally, I think the schools problem lies more in being very poorly managed than in being underfunded. When I was in highschool the City had many fewer high schools than it does now, but it had 400,000 to 500,000 more people living in it. Does that make sense? When a decsion is made to close a High School such as Redford, it is met with killings at Henry Ford because the school board did not allow current Redford students to simply matriculate out before closing the school. About 12 years ago we floated a huge bond to build new schools, yet we allowed the old empty ones to rot. Some of the schools that recieved some of that bond to either expand or improve were closed and now stand in shambles. In-fighting among the school board is accepted as commonplace and it goes through CEO's faster than I flush my toilet. | ||
Sparty06 Member Username: Sparty06 Post Number: 126 Registered: 03-2007 |
That's true Dan, but I guess the point the article makes is that those cities also went through periods where they suffered significant population loss like Detroit and lowering property taxes reversed that trend... ultimately leading to higher home values. | ||
Ocean2026 Member Username: Ocean2026 Post Number: 53 Registered: 11-2008 |
The abandoned and forfeited buildings should be taxes at what they sell for even if its $1 - or no one will buy them. LIke Buffalo any improvements should not be taxed for 10 years. Information on the taxes for each property should be listed on a website for free. | ||
N7hn Member Username: N7hn Post Number: 110 Registered: 02-2008 |
PArt of the trouble now is that the (few) people left have to carry the burden of paying all the city's expenses. Every vacant home in detroi not only does not add revenue, it creates expenses and promotes crime and blight. I agree that part of the problem is the high tax per home value. Thats a main reason I have NOT returned to detroit. Its crazy to have a monthly tax payment that matches your mortgage payment. It makes it even hard for people to invest in rentals due to the low rent/high tax ratio. Why take on the expense and trouble to own a rental if you arent going to be able to charge enuff rent to even cover your taxes and be able to cover possible/probable time the property is going to be vacant as well. I know the solve isnt a bunch of rentals, but thats just my example for sake of argument. Im preparing to move back to metro detroit area But am at this point more attracted to the suburbs for the low taxes although Id really rather be in the city but cant justify the high tax for the low services currently provided. Also I would see more value in a city home if the taxes were less. I would pay more for one as Im looking at the monthly bottom line . Just my 2 cents ..... (Message edited by n7hn on December 07, 2008) | ||
Novine Member Username: Novine Post Number: 902 Registered: 07-2007 |
Sorry but most of the claims in that article are dubious. For example, the claim that "Higher property tax rates, for example, inevitably send home values downward." There's plenty of examples that contradict that. Birmingham has one of the highest property tax rates in Oakland County but it hasn't kept property values in the city from going up. It took a bad economy to do that. There's plenty of places around the country that have very low property tax rates compared to places like San Francisco and the property values in those places are equally low. It's what I would expect from the WSJ but their attempt to create a connection between the changes in property tax systems and the changes in SF and Boston are speculative at best and ignores a lot of reality to make their claims. Want to know what drove growth in SF? How about the growth of the Silicon Valley? Or Route 128 in Massachusetts? | ||
Sparty06 Member Username: Sparty06 Post Number: 129 Registered: 03-2007 |
Novine, Great post. I would generally agree with you but add that Detroit in general is a pretty tough place to try and start a business or purchase a home because of byzantine regulations and higher taxes. I'm currently considering where I want to live in the metro-Detroit area and I know that if I choose to live in the city I will pay more for less. In Detroit, my tax difference between the suburbs would not only be a lot higher but I would also worry more about safety, have less access to groceries and really a host of other things that affect quality of life. As much as I want to live in the city, I have to take these financial factors into account, especially considering what I'm getting. This doesn't rule Detroit out because it still has a lot to offer but it does act as a barrier at a time when the city can least afford to put up barriers for people considering moving into the city. If I had tons of cash to burn, I wouldn't hesitate to do it. But like so many others, I have a limited budget and have to spend carefully. (Message edited by sparty06 on December 08, 2008) | ||
Novine Member Username: Novine Post Number: 905 Registered: 07-2007 |
You're getting closer to the key points which are: 1) Detroit residents and businesses don't get enough value for the taxes they pay 2) The regulation and regulators in Detroit don't provide a logical and business-friendly environment for those looking to start a new business. Detroit will never have a low tax rate and there will always be communities with much lower tax rates than the city. Cutting taxes as a solution to encourage growth will never be a significant component of a growth strategy (if you can afford to reduce taxes by eliminating waste, inefficiency, etc. that's great). The problem is that most people don't feel like the taxes they pay are providing a good level of service or quality services. Until people start feeling that or believing that, the taxes will always be too high, no matter what the actual number is on the tax bill. Provide quality services consistently and people will feel they are getting their money's worth and will be willing to pay more for all of the other reasons that people want to live in a city. | ||
Retroit Member Username: Retroit Post Number: 565 Registered: 04-2008 |
Right on, Sparty06! Detroit property taxes are ridiculously high in comparison to the surrounding suburbs. Doubters, see for yourself: https://treas-secure.state.mi. us/ptestimator/ptestimator.asp | ||
Novine Member Username: Novine Post Number: 907 Registered: 07-2007 |
"Detroit property taxes are ridiculously high in comparison to the surrounding suburbs." What does that tell you? If all you care about is paying low taxes, there's plenty of places you can live where you can pay next to nothing in taxes, get next to nothing in services and live miles from anything. Detroit is always going to have higher taxes than the suburbs. As I said before, the problem isn't the tax rate. It's the belief that people have that they aren't getting enough for what they pay. This is also true in some suburban communities where tax rates are a lot lower but where people there don't feel like they get what they should for the taxes they pay. | ||
N7hn Member Username: N7hn Post Number: 118 Registered: 02-2008 |
what people want for their tax money is to feel reasonably safe and not to have to look at abandoned buildings and large objects just dumped just anywhere. Just outside ann arbor tax on a $75000 home (yes they have them) $1200 near lakes , community centers, accessable caring police and all ann arbor has to offer. Tax on a $50,000 home in detroit over $3000..... If thats wrong them the city has given me that info incorrectly and has effectively made me BELIEVE the suburbs are better and has assisted in driving me off. Like i say the few left in detroit (as opposed to the many more it COULD be home to) carry the bill for all the citys expenses. Those expenses are also higher due to the vandalism, arson and theft that takes place in a largely abandon community. | ||
Bratt Member Username: Bratt Post Number: 781 Registered: 01-2004 |
For an example. I was fortunate enough to buy a foreclosed home. The people prior to me lost it for $137,000 and I paid around $26,000 for it. I received my annual property tax bill...$5500. The problem is, they have this property still valued at the $137,000. When the period comes where you can dispute your taxes, I will be the first one in line. This house is no longer worth what they are claiming....hence my taxes should not remain the same. | ||
N7hn Member Username: N7hn Post Number: 119 Registered: 02-2008 |
amen bratt..... I think you have the supporting evidence (experience)and have stated simply what the point of this thread is about and how it isnt helping lure people to detroit. | ||
Bosch Member Username: Bosch Post Number: 23 Registered: 11-2008 |
If I were the Czar of Michigan, I would immediately combine all adjacent municipalities, both cities and charter townships into one single entity. Most of Southeast Michigan would become part of New Detroit. This would reduce the overhead costs of so many government entities and allow for basic services at lower tax rates. | ||
Novine Member Username: Novine Post Number: 909 Registered: 07-2007 |
"what people want for their tax money is to feel reasonably safe and not to have to look at abandoned buildings and large objects just dumped just anywhere." Sounds great. How do you propose to provide that in Detroit on the tax rate of a rural township? | ||
N7hn Member Username: N7hn Post Number: 121 Registered: 02-2008 |
firstly find a way to get all the vacant homes occupied and get a positive cash flow going on EVERY house in city limits. Possible by giving away city owned property at no cost with a commitment of a set standard and timeline for improvements. The city wouldnt have to worry or be liable for the property any longer as well. I suppose the bill of putting out fires on abandoned homes then tearing them down is all cost free ? As people saw others return and new local businesses arose to serve the newly growing city and its residents others would follow. Id also sell property to businesses for development at a much lower rate than the city now demands , Like that library building they spent money on tearing down instead of taking the 2 million they had a bid for, them I could tax that location at a more reasonable rate too. When Im elected mayor and collect a (small)salary Ill work out just how. Im not saying its an easy task but the "wait and see" approach isnt working. I think its a waste of time tho to hear what i would do as detroit has stayed on its current downward path for decades. The people elected seem to care about only their own progress and not that of the city. | ||
N7hn Member Username: N7hn Post Number: 122 Registered: 02-2008 |
let me say it simpler. You have 5 acres for your cider mill but only 5 trees. Every year you have rent bees (expense, cuz with so few trees no bees readily visit ) and have to pay someone to pick the apples. Come fall and the people want cider you run out on the first day and there goes your revenue for the year and u still have to pay the bee keeper and the apple pickers. Not only that, no one even thinks of coming the next year at all. Say u plant the 100 or so trees per acre that land can handle , thats 500 trees. Well my friend then u have cider for all come fall and extra cash to invest in supplies for doughnuts, and maybe smoked cheese. I didnt forget that buying the 500 apple trees could be a problem in that case you could lease some of the land to a competitor to plant their trees on and work out a percentage of the harvest, all the while growing a few trees from seed yearly..... while gradually leasing less and less land. I hope this helps. If not I can draw it out. (Message edited by n7hn on December 08, 2008) | ||
Danindc Member Username: Danindc Post Number: 5308 Registered: 10-2003 |
Bratt, that's a national problem, not something specific to Detroit. | ||
N7hn Member Username: N7hn Post Number: 123 Registered: 02-2008 |
true Danindc, but not every city has seen the drastic fall of prices that detroit has. Im LA here they have fallen 25% not 75% In LA they wont lower the price of a foreclosed home as they will in detroit either. They would rather sit on the property as in LA a rebound is definite, In detroit its improbable |
