Discuss Detroit Archives - Beginning January 2006 NEZ: Is it a double-edged sword ? Previous Next
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Darwinism
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Username: Darwinism

Post Number: 459
Registered: 06-2005
Posted From: 69.209.164.121
Posted on Sunday, April 09, 2006 - 12:52 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

http://www.detnews.com/apps/pb cs.dll/article?AID=/20060409/M ETRO/604090310

I have seen Anthony Curis on TV many times, he's almost a celebrity of some sort. Whenever there is a program on HGTV and Fine Living channels on Detroit, his loft will be a feature story.
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Swingline
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Username: Swingline

Post Number: 442
Registered: 11-2003
Posted From: 4.229.60.251
Posted on Sunday, April 09, 2006 - 2:56 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

The benefits of the NEZ is a very complicated issue that has more elements than addressed in the David Josar article. The gross tax "cost" of the NEZ program does not provide the whole picture.

While difficult to measure precisely, there are some assumptions that can be made if the NEZ abatements were not available. For example, many of the Detroiters who relocated to NEZ properties likely would have left Detroit altogether. What would be the tax cost of that result? Also, gross property tax revenues would have declined anyway over the past ten years. The average household income of the NEZ abatement recipients is far higher than than the city average, so, but for the NEZ, income tax collections would be lower as well. I am sure that there are other more obscure factors as well. I am not suggesting that Josar should have embarked on some sort of PhD thesis research, but the article is flawed when it highlights only the costs of the program and none of the benefits.
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Brandon48202
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Username: Brandon48202

Post Number: 85
Registered: 12-2004
Posted From: 69.220.60.51
Posted on Sunday, April 09, 2006 - 3:03 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Long term (more that 12 years) the impact of the NEZ will be HIGHER tax collections- assuming that the abatements are not extended. In order to make this city truly competative, we need lower taxes for ALL property owners.
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Ron
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Username: Ron

Post Number: 17
Registered: 03-2006
Posted From: 66.174.79.227
Posted on Sunday, April 09, 2006 - 3:05 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

I cannot agree that the NEZ is a double-eged sword. As noted in the story, many of these parcels were once vacant or city owned, and therefore did not reap ANY revenue for the city.

Additionally, if we are turning renters into homeowners by eliminating barriers to homeownership in Detroit, that is a wonderful thing. 90% of NEZ residents are homeowners, compared to less than 50% city-wide and approximately 70-80% nationwide; that is a tremendous success.

Furthermore, we must attract middle and upper-class residents to share in the costs of maintaining city services. 1/3 of Detroit residents live below the poverty level. As I noted in earlier posts in different threads, we are a city built to sustain 1.5 million residents, and we currently have less than 900,000 residents sustaining the city.

While the Detroit News story was certainly insightful, I cannot agree that it is a detriment to the city. We are suffering from a top-heavy bureacracy in all city services, from the police department to the school system. Without becoming more efficient in the provision of city services, those bureaucrats have no room to complain.
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Superduperman
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Username: Superduperman

Post Number: 78
Registered: 01-2005
Posted From: 69.242.221.36
Posted on Sunday, April 09, 2006 - 3:07 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

I think I saw his loft featured in this local magazine,isn't it like 2 lofts combined?
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Darwinism
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Username: Darwinism

Post Number: 460
Registered: 06-2005
Posted From: 69.209.164.121
Posted on Sunday, April 09, 2006 - 9:55 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Superduperman: Yes, I believe you are right ..... in fact, it might even be 2 separate floor units combined. Definitely quite a showcase of luxury loft.
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Itsjeff
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Username: Itsjeff

Post Number: 5759
Registered: 10-2003
Posted From: 69.242.213.167
Posted on Sunday, April 09, 2006 - 10:32 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

The guy is 25, has a three-story loft with over 3,000 square feet. His decor was featured in the Free Press last month, noting that his custom-made fish tank cost $20,000. He pays less in property taxes than I do, but lives in a nicer home, in a more desirable area. I agree that his un-abated tax bill of $11,000 is too high, but the $1000 he pays now is unconscionable.
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Motorcitymayor2026
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Username: Motorcitymayor2026

Post Number: 680
Registered: 10-2005
Posted From: 24.231.189.137
Posted on Sunday, April 09, 2006 - 10:52 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

i agree itsjeff... seems like there needs to be some middle ground.. However, if it entices a major corporation like a, Rock financial, for instance..i think that is okay, becuase of the impact it will have on detroit... thousands of jobs, potential new residents, a rsignature building on a vacant lot, etc..
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Thecarl
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Username: Thecarl

Post Number: 682
Registered: 04-2005
Posted From: 69.14.30.175
Posted on Sunday, April 09, 2006 - 10:58 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

certainly it's a risk to cut taxes, but if detroit wants to regrow its population, this is the type of risk it needs to take. i applaud this aggressive move to get people moving into the city, and hope that the grocery stores, hardware stores, dry cleaners, delis, and other small businesses are not far behind.

i guess a small percent of something is better than a small percent of nothing.
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Noggin
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Username: Noggin

Post Number: 60
Registered: 09-2004
Posted From: 69.241.253.36
Posted on Sunday, April 09, 2006 - 11:13 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Hey folks if they continue to live in the city an income tax is collected if they move out it is not. The city cannot attract people if the taxes are too high but will if they are competitive with the adjoining cities. It is simple economics.
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Itsjeff
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Username: Itsjeff

Post Number: 5760
Registered: 10-2003
Posted From: 69.242.213.167
Posted on Sunday, April 09, 2006 - 11:43 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

$1049 a year for a $335,000, 3-story loft overlooking Jefferson Avenue and the river isn't "competitive with adjoining cities." It's beyon unconscionable. I pay $1700 a year for a house with half the value, on-street parking and a less spectacular view.
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Jerome81
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Username: Jerome81

Post Number: 961
Registered: 11-2003
Posted From: 64.142.86.133
Posted on Monday, April 10, 2006 - 2:37 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

I think they're great. I would say all taxes should be lowered, and maybe NEZ slightly raised. Meet in the middle.

The fact is Detroit has to lure people to live there, especially people with the money to live elsewhere. It must be done.
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Darwinism
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Username: Darwinism

Post Number: 461
Registered: 06-2005
Posted From: 69.209.164.121
Posted on Monday, April 10, 2006 - 3:40 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Itsjeff: If Anthony Curis and his $1024 tax bill is beyond unconscionable, how about Pamela Rodgers and her 4,300 sq. ft. Grayhaven mansion valued at 1.3 Million but only gets a tax bill of $2,738 ? Wow !!


quote:

In one case, Pamela Rodgers, the owner of one of America's most successful Chevrolet dealerships, bought a $1.3 million house along the Detroit River in 2002. Because of several exemptions, she pays $2,738 a year in property taxes, a break that saves the businesswoman $41,999 a year. When the breaks expire in 2011, Rodgers will have saved $371,345 in property taxes. She receives the biggest residential tax break in Michigan.


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Swingline
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Username: Swingline

Post Number: 445
Registered: 11-2003
Posted From: 172.139.81.113
Posted on Monday, April 10, 2006 - 12:01 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

I was somewhat disappointed to learn from the article that the city has not restored the Victoria Park homes to full taxation upon the expiration of the NEZ abatement. It seems to me that this reneges on the "agreement" made with the rest of the city taxpayers in the early '90s. At most I could see a 1 or 2 year phase in of the "actual" tax. A multi-year phase in somehow doesn't seem fair after more than a decade of practically zero taxes.

As an aside, I have observed that in the course of the local Realtors' continuing deceptive practice of including the existing capped taxes in their mortgage and tax "cost" calculation in their SE Michigan listings, brokers listing Victoria Park homes continue to state that taxes will be $80-$100 per month.
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Eastsidedog
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Username: Eastsidedog

Post Number: 174
Registered: 03-2006
Posted From: 12.47.224.8
Posted on Monday, April 10, 2006 - 1:51 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Itsjeff, I agree 100%. The city needs middle-class and upper class residents but anyone who thinks that guy in the 3,300 sq. ft. loft is doing anything for the city is kidding themselves, he's just robbing the rest of us with the city's approval. NEZ = Tax cuts for the rich. period.

Detroit needs to eliminate the NEZ and gradually scale back taxes for everyone if it ever wants to have real healthy neighborhoods and and not gated tax-abated communities for the ultra-rich. Looks like Victoria Park is still robbing the regular tax payers.
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Itsjeff
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Username: Itsjeff

Post Number: 5763
Registered: 10-2003
Posted From: 208.27.111.125
Posted on Monday, April 10, 2006 - 1:57 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

I will offer one saving grace for Mr. Curis' tax deal. While he's only paying $1050 a year in property taxes, he gets nothing in return for them. The condo funds its own trash removal, 3 of the 4 roads surrounding River Place are in bad shape and, being gated, they don't need much police presence.

I'm paying more, but at least I get my trash picked up and my street is patrolled regularly.
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Eastsidedog
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Username: Eastsidedog

Post Number: 175
Registered: 03-2006
Posted From: 12.47.224.8
Posted on Monday, April 10, 2006 - 2:14 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Itsjeff, very good point. But if he calls 911 or his place burns he'll be relying on city services to save his ass. With the exception of fancy dinners at the rattlesnake he's adding almost nothing to the city but another face in a car flying down Jefferson Avenue.

Why can't the city just scale back the property and income taxes a little every year? As the overall tax rate decreases more would decide to give the city a chance. More people paying less taxes is the ideal situation. What we have now is a few Detroit residents paying almost all the taxes because of low homeownership and high unemployment/poverty. Actually, I don't have the numbers handy but I'd bet the majority of Detroit's tax base comes from non-Detroit resident income taxes. So, instead the city gives tax breaks to those who can most afford to pay them. Not to mention that a large number of residents moving into these NEZ developments are from the regular neighborhoods where they propably paid a lot more taxes.
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Ron
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Username: Ron

Post Number: 26
Registered: 03-2006
Posted From: 66.174.79.231
Posted on Monday, April 10, 2006 - 2:27 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Eastsidedog,

I agree that an across the board tax cut is in order. However, I would qualify that to be applicable only for people who purchase the homes to actually live in. I would not want people to purchase the homes to be used for rental properties and enjoy a tax break for it, as rental properties tend to lower property values.

Less than half of Detroit's population own the homes they live in. We must do something to advance the vested interest a person has in their community when they own their homes. As I have stated before, our policy must reflect our values; if we value a city full of rental properties, so be it. But if we value homeownership, our public policy should reflect that.

Read more about my plan at www.liscombe4staterep.blogspot .com

Ron
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Eastsidedog
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Username: Eastsidedog

Post Number: 177
Registered: 03-2006
Posted From: 12.47.224.8
Posted on Monday, April 10, 2006 - 2:41 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Ron, Detroit needs occupied homes more than anything, be them rental or owned. If it can be rented instead of being abandoned then please bring it on. The abandoned houses in Detroit just need warm bodies, whether they're paing $200 a month or $800. Longterm mortgage debt isn't for everybody. Please no more incentives that only go to people who qualify. IMO only gradual across the the board lowering of property/income taxes will have a real lasting effect on the entire city. People who don't "qualify" (i.e. aren't in new construction, aren't in a stable historic district, aren't in a loft) deserve breaks as much as anyone else. This playing favorites has got to stop and I believe is starting to create a rift between old Detroiters and new Detroiters. We need a unified city not another "us vs. them" mentality.
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Ron
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Username: Ron

Post Number: 27
Registered: 03-2006
Posted From: 66.174.79.228
Posted on Monday, April 10, 2006 - 3:09 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Eastsidedog,

I tend to agree with you about the us v. them mentality. I also agree that across the board cuts are necessary. I further agree with you that I would rather have a home rented out than abandoned. However, I am of the opinion that we are currently at a tipping point, with the population decreasing by 27 residents per day.

There is no dispute that rental properties lower property values. We have a plethora of rental properties in Detroit. My proposal would also be available to people who are currently Detroit renters who choose to purchase.

While I agree that long-term mortgage debt is not for everybody, it is appropriate for many who would like to own a home to live in Detroit, but are not willing to because of the high costs associated with that decision. I do not advocate displacing any renters; I do advocate crafting policy that reflects our value of homeownership.

As an example, a friend of mine, who currently lives with a relative in Detroit, is looking to purchase a home in Detroit. She has found many homes that she would like to purchase, to actually live in, but she has not actually purchased yet because her property taxes would tack an additional $200-300 a month on to her mortgage. These are the types of residents that we need to purchase homes in the city. (Young and middle-class).

By encouraging young, middle-class residents to move into the city, we will be able to provide relief to older residents, to residents who are struggling financially, by sharing the costs of public services with others.

An analogy: have you ever hung out with a friend who has a great job that pays way more than you? I have, and those friends of mine usually pick up the tab when we do hang out, just as I usually pick up the tab when I hang out with friends who don't make as much as I do.

That is how I see this issue. We need people to move into the city who can afford to help out those of us who struggle to pay taxes, etc. We need people to move in who aren't below the poverty level, as 1/3 of our residents are already there.

The only problem I have with lowering property taxes across the board is that we cannot afford the city services provided now with the revenue we are realizing.

As someone posted earlier in this thread, I would rather see a smaller percentage of something, rather than a larger percentage of nothing.

And so, long story short, I agree that people who don't "qualify" need a break just as bad, if not more so, as anyone else. We just differ on what we feel is the best way to provide it to them.
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Swingline
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Username: Swingline

Post Number: 446
Registered: 11-2003
Posted From: 172.152.248.98
Posted on Monday, April 10, 2006 - 5:02 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

The intent behind the NEZ is sound. Whether Michigan's program provides an optimal balance between the size of the abatements needed to attract middle and upper middle class homeowners and the revenue needs of the municipalities is a very hard question to answer. I admit that the +- 90% tax break created by the Michigan programs is very generous without question.

I would also note that the "NEZ lite" program recently passed by the Legislature for certain existing "better off" neighborhoods in the city is not nearly generous as the original NEZ program. My understanding of this new program is that it provides about a 40% abatement for the first few years and that the abatement is then phased out over about 4 years.
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Eastsidedog
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Username: Eastsidedog

Post Number: 179
Registered: 03-2006
Posted From: 12.47.224.8
Posted on Monday, April 10, 2006 - 6:18 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)


quote:

By encouraging young, middle-class residents to move into the city, we will be able to provide relief to older residents, to residents who are struggling financially, by sharing the costs of public services with others.




The article made it clear that these folks are actually paying less and the city is losing money because of NEZ thus the poor are getting LESS services now. Plus, there's no guarantee they'll stay once the NEZ runs out, hence the Victoria Park issue. On top of that, I'd say that most of the new construction is beyond the means of even the middle class (335,000?). It is almost exclusively geared towards the upper-class (keyword everywhere: "luxury"), AND the upper class has the most mobility of anyone in society, once the 12 years are up they can bail in a heartbeat. Thus with Victoria Park it seems they're getting a perpetual tax break now.


quote:

The only problem I have with lowering property taxes across the board is that we cannot afford the city services provided now with the revenue we are realizing.




Take out the extreme inefficiency in city government. Assess properties properly. Actually collect all the taxes. Cut the income tax and lower property taxes to be competitive with the suburbs. If these measures were phased in gradually Detroit would see a real rebound in middle class popularity.

Itsjeff is right, the upper class gated community dwellers don't really need as much in the way of city services. The poor need them the most and don't pay for them but they get them anyways. The middle class however needs them as well and now can barely afford the price that Detroit charges. THAT'S THE REAL PROBLEM. Really the people who can afford it the most, the upper class should be picking the tab up for the poor, but that largely isn't happening in Detroit due to NEZ and with the new NEZ being extended to the nice existing neighborhoods, the upper class will be picking up almost NONE OF THE TAB. Bye, bye middle class...

NOTE: My wife and I bought a home in an old city neighborhood. We are young, middle class and we love the city but it sure as hell isn't because of city government. I just hope there's a place for regular middle class homeowners in the "Next Detroit."

Sorry everyone for the rant. I just feel very strongly about this subject. Favoritism cuts me to the bone and that's all NEZ is. Tax cuts for the rich. Any other explanation is pure marketing.
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Eric
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Username: Eric

Post Number: 416
Registered: 11-2004
Posted From: 35.11.210.161
Posted on Monday, April 10, 2006 - 7:10 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Let's not forgot the spin off development the NEZ have created with all the new residents. Business that would otherwise not opened in Detroit. However there's need for adjusting the amount 90% is just far too generous IMO I think Brush Park's abatement is 56% a far more reasonable number. You want it to be an incentive not a giveaway

(Message edited by eric on April 10, 2006)
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Ron
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Username: Ron

Post Number: 28
Registered: 03-2006
Posted From: 66.174.79.226
Posted on Monday, April 10, 2006 - 7:13 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Eastsidedog,

I don't believe that the rich should be offered any sort of breaks. That is why my plan calls for a tax cut for anyone who purchases a house to live in, anywhere in the city.

I think there is some confusion out there, I am distinguishing my proposal from the NEZ, which is only applicable in certain neighborhoods, developments, etc. My proposal would be available anywhere in the city, and for any housing someone purchases. I just believe that it is insane to let all of these beautiful homes go to waste because people cannot afford to live in them.

Again, Detroit is realizing a net LOSS of 10,000 residents per year. I do not necessarily believe that the city is losing money as a result of the NEZs.....a smaller percentage of something is still better than a larger percentage of nothing. And, as I have noted in other posts, whether there is one house a block, or 32, the garbage trucks still needs to go down that street; so the services are still being provided, there are just fewer people paying for them.

With respect to affordable housing, Detroit has one of the largest stocks of affordable, middle-class housing of any city in the nation. If a property tax break were offered for someone to purchase one of those homes, which are likely vacant now, to live in, why would you be opposed to it?

Furthermore, just because residents of the NEZs are paying less in property taxes, does not lead to the conclusion that the poor are receiving fewer services.

I also agree that the middle-class are reaching the point of not being able to afford the costs of city services, hence the impetus for my proposal. There does need to be more accountability with respect to a more efficient government. These are problems endemic to aging cities that must be dealt with sooner rather than later.
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Jsmyers
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Username: Jsmyers

Post Number: 1553
Registered: 12-2003
Posted From: 209.131.7.68
Posted on Monday, April 10, 2006 - 7:14 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Eastsidedog,

I might agree with you on some of your principles, but you really don't understand the NEZ program.

For example, a large number of NEZs are for income limited housing projects done by CDCs all over the city.

I believe NEZs are a necessary and valuable tool for Detroit to use for redevelopement. I also think that there are a number of cases where they have been applied in ways that are not appropriate. However, there have also been a large number of cases where they have been applied perfectly.

I know that the CPC and P&DD have been working on a housing strategy that will hopefully bring some rational planning to the granting of NEZs. Maybe these articles, as misleading and short on facts as they are, may help encourage this improvement.
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Ron
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Username: Ron

Post Number: 29
Registered: 03-2006
Posted From: 66.174.79.226
Posted on Monday, April 10, 2006 - 7:20 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Sorry, one more thing. It is the nature of media to add controversy to these types of debates. (That is what sells papers) That is why they pick the most egregious example to highlight in a story of this nature (hence Mr. Curis' property being highlighted).

I just think that anything done to attract new residents to the city is good thing. Public policy is all about shades of gray; I don't know of any issues where there is an absolute correct answer. Again, policy is a zero-sum game, everyone cannot always win. It is a matter of values.
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Jsmyers
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Username: Jsmyers

Post Number: 1554
Registered: 12-2003
Posted From: 209.131.7.68
Posted on Monday, April 10, 2006 - 7:24 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Thank you Ron for your insights. (shades of gray).

Unfortunately to many in this country, seeing things in black or white is seen as a sign of strength.
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Redetroit
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Username: Redetroit

Post Number: 1
Registered: 04-2005
Posted From: 152.163.100.8
Posted on Monday, April 10, 2006 - 7:33 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

First of all, I'd like to say I think this is a really great site. I have been following it for over a year, and I am looking forward to finally voicing my opinions on it. My name is Anthony Curis, I'm the guy in the article that a few of you are blasting for "costing" this city money. I'd like to get a few things straight about both the article and that mentality.

First of all, the writer of the article is under some serious fire right now from almost every party inolved in the article. NEZ's are a very opinionated topic, and that is why I was hesitant of being interviewed. But Mr. Josar assured me and the developers involved that the article was just about NEZ's, how they've enabled residents to move into the city, and the long-term benefits of the short-term tax loss. I understand some people are against them, and I can see their side of the argument. A lot of these residents have been here for years, many longer than I've been alive. Yet they are forced to pay much higher taxes than some of these newer developments.

This is why I was hesitant about being involved. I was outraged when I opened the news that day. Mr. Josar had the audacity to come to my home and talk about how great it is to have young people like me moving into the city, then publicly humiliate me as well as others by stating that we are costing the city money, police force, or other services. For anyone wondering, my taxes are not $1,024 a year. I wish they were that low. They are not even close to that, and I have no idea where he even came up with that number. The price of my condo that he printed was also false. Most importantly to me, Mr. Josar quoting me saying "I wouldn't have moved to the city if it weren't for the NEZ" is complete garbage. I never said that, and it is far from true.

Articles like this are very disappointing for me, as well as they are for most of you. I have been able to get almost every one of my friends to move to Detroit because I constantly talk up the people, the potential, and the great things going on. I love this city, I spend every dollar I have in this city, and I plan on being here for a very long time. So for anyone that says I cost this city money, I would challenge you any day as to how much I really "cost" this city.

I understand this is a difficuly topic and that many of you do not believe in tax breaks like these. I see your arguments and I do agree with many of them. But as a young professional moving into the city, the NEZ is a huge tool that is definitely working. Just come to the Lofts and you'll see. These people aren't costing the city anything, they're investing in it. They are the same people that aid in keeping many local businesses alive by spending their incomes in Detroit. You can't blame these people for buying a condo that happens to have an NEZ. Come on, that's almost laughable. I looked at several properties in Detroit, some of which did not have the tax incentive. But I fell in love with where I live, and on the plus side, it happened to have the NEZ.

I'm not trying to cause an argument my first day here. Ha, I've seen some of the arguments that go on here and I don't want to be the start of one already. I just can't sit back and read comments about me "costing" this city money without voicing my opinion. Well, I hope you understand what I'm trying to say. Again, I'm glad to finally be a part of this site.

Anthony Curis
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Jsmyers
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Username: Jsmyers

Post Number: 1555
Registered: 12-2003
Posted From: 209.131.7.68
Posted on Monday, April 10, 2006 - 7:43 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Thank you for coming out Anthony. Welcome to the forum.

Have you written to the news so that they may print a correct/appology/retraction?

Sometimes I think our newspapers (especially the News it seems) would rather destroy their city (and future chances of selling papers) in order to make a buck today. Unfortunately (for us) if everybody leaves Michigan the newspaper company will still make a buck, since they own papers all over the world.

This is the primary reason I believe locally owned news and media are important.
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Redetroit
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Username: Redetroit

Post Number: 2
Registered: 04-2005
Posted From: 152.163.100.8
Posted on Monday, April 10, 2006 - 7:47 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Yes, I've already made several phone calls as well as written e-mails and letters. The whole article was just very unprofessional. I left Mr. Josar messages stating my digust for such a negative article about the city, especially from a Detroit resident like himself.
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Jsmyers
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Username: Jsmyers

Post Number: 1556
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Posted From: 209.131.7.68
Posted on Monday, April 10, 2006 - 7:54 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

To expand on my previous post about the NEZ program:

I believe that the city should be generally slightly less liberal in passing out NEZs. These projects should get priority:

Projects that expand home ownership for the low to moderate income families and individuals that are qualified to own a home (but need a bit of help). Habitat for Humanity is one example of this group.

Projects that bring properties on the tax rolls that were previously low value and likely publicly owned. Brush park is a good example of this.

Projects that are in areas that with a litte push can become viable in the market to continue with little or no subsidy.

Projects that will have the effect of helping an area that is currently doing quite well. For example, the formerly vacant land near West Village and Indian Village was a great use of an NEZ, because developing those properties makes the existing WV and IV neighborhoods more attractive and valuable.

Both of these mean that targeting the incentives is important, and my primary complaint with the way NEZs have been handled is that there is very little targeting.

I think that rental to condo conversion in generally are not a good use of NEZs. Nor are existing, functioning neighborhoods. (There are of course exceptions to every rule.) I do also think that anything that can be done to reduce all Detroit property taxes is a good thing, but a balance has to be struck between paying for services and having low taxes.

If used correctly, NEZs increase the tax base a small amount in the short term, and a large amount in the long term.
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Ron
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Username: Ron

Post Number: 30
Registered: 03-2006
Posted From: 66.174.79.230
Posted on Monday, April 10, 2006 - 8:05 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Jsmyers, I agree that too many feel that a "black or white" perspective on policy is a sign of strength. To me, it is a sign of arrogance. We must understand that there are very few truly "black and white" issues. (No pun intended)

Mr. Curis, welcome to the forum. As a fellow new member, I can assure you that controversy is a short trip away. Take it all in stride. I find it to be overwhelmingly constructive, and usually challenges me on what I believe to be true; which actually makes me a better person for it. Anytime we are challenged to substantiate our opinions, beliefs, etc. I believe that we grow.

The one thing I have found to be true is that everyone on the forum actually cares about the city, we just differ about what we believe to be the best way to move forward. This has got to be one of the biggest collections of knowledgeable people in the area. And, some of these folks are really funny, too! I am humbled to take part in this forum.

Welcome!
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Gistok
Member
Username: Gistok

Post Number: 1978
Registered: 08-2004
Posted From: 4.229.147.119
Posted on Monday, April 10, 2006 - 8:09 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Anthony Curis.... it is a pleasure to hear "the other side of the story"..... Great to hear also that you are encouraging others to move to Detroit! Hope to hear more from you in the "non-controversial" threads! :-)
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Darwinism
Member
Username: Darwinism

Post Number: 464
Registered: 06-2005
Posted From: 69.209.164.121
Posted on Monday, April 10, 2006 - 8:19 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Hi Anthony, Welcome to the forum and I must admit that I have seen your loft on TV and in magazines/newspapers many, many times. It is definitely a gorgeous home. I can't believe how badly the Detroit News had butchered the story, I would be very outraged if I were in your shoes. I hope the journalist apologizes to you and re-write another article that puts an accurate perspective regarding your actual amount of taxes.

Once again, congratulations on being showcased for a national audience in programs such as HGTV's "What You Get For the Money".
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Redetroit
Member
Username: Redetroit

Post Number: 4
Registered: 04-2005
Posted From: 152.163.100.8
Posted on Monday, April 10, 2006 - 8:26 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Thanks a lot, I appreciate the welcoming and the complements on my home. As for the HGTV show, the production manager sent me an e-mail last week saying that the piece they did on my loft has had more positive feedback than they've seen in a long time. She said she can't believe the amount of people that have called or written her asking questions about Detroit. So I'm glad it gave a little positive press to the city that most people in the U.S. don't see.
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Eastsidedog
Member
Username: Eastsidedog

Post Number: 182
Registered: 03-2006
Posted From: 68.79.122.158
Posted on Monday, April 10, 2006 - 11:21 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Redetroit, I apologize if I sterotyped you in my previous post. It was a rather emotional post. Anybody who moves to Detroit -- tax break or no tax break -- has to have a lot of heart for the city. With all the other problems in the city, having the property tax burden eased is only a small incentive.

Regardless, I still feel NEZ's have to stop if we are to avoid serious rifts in the Detroit community. I can not even begin to describe the anger that many long time Detroiters I have met feel towards the tax abated condos and other new construction/rehabs. We need new construction desperately, but slighting those who have stuck it out and sacrificed for so long is to many a slap in the face.

I didn't want to utter it but Hendrix made a point during his election bid, that if Kilpatrick wanted to cut the property taxes across the board he could do it. But instead he favors NEZ's for neighborhoods in addition to the new construction/rehabs. The favoritism has got to stop. We need tax cuts across the board, gradually phased in over time. It may not result the boom we are currently experiencing, but it would be far healthier to have gradual reconstruction, infill and revitalization in the city.
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Redetroit
Member
Username: Redetroit

Post Number: 5
Registered: 04-2005
Posted From: 205.188.116.137
Posted on Tuesday, April 11, 2006 - 10:27 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

I completely understand Eastsidedog, I can see your arguments. I guess the only way to look at it positively for both sides is that it will pay off in the long term. There are several NEZ's that will be running up shortly and that will only add to the city's tax revenues. Being realistic, and you may think I'm only saying this because my property has one, but I really don't feel a lot of these buyers would be buying in the city if it weren't for the NEZ. Many just couldn't afford it and that's the truth.
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Itsjeff
Member
Username: Itsjeff

Post Number: 5766
Registered: 10-2003
Posted From: 208.27.111.125
Posted on Tuesday, April 11, 2006 - 12:22 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Red, if the $1029 quoted is in error, would you mind telling us how much your taxes are? And could you also state the amount as a percentage of the value of your fish tank. :-) Thanks.
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Eastsidedog
Member
Username: Eastsidedog

Post Number: 183
Registered: 03-2006
Posted From: 68.20.140.8
Posted on Tuesday, April 11, 2006 - 1:15 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Yeah, there's a house by me with an asking price that's twice what that fish tank cost. Granted it needs some work but maybe we could seal it off, fill it with water (salt water of course and a big fancy filter) and add fish. But would it be subject to property taxes then? Maybe we'd have to tax the fish.
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Jsmyers
Member
Username: Jsmyers

Post Number: 1560
Registered: 12-2003
Posted From: 209.131.7.68
Posted on Tuesday, April 11, 2006 - 1:22 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

IMHO, an example of a project that probably doesn't deserve NEZ status:

http://www.modeldmedia.com/dev elopmentnews/stregis40.aspx

An example of a project that probably does:

http://www.modeldmedia.com/dev elopmentnews/crystal40.aspx

(Note that in the second case, there is no mention of a NEZ. It might get it later as other parts of the financing fall into place. It might also be that depending on how the brownfield stuff is set up that it can't get an NEZ.)

I say probably because there are always factors that I'm unaware of.
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Lowell
Board Administrator
Username: Lowell

Post Number: 2451
Registered: 10-2003
Posted From: 66.167.210.27
Posted on Tuesday, April 11, 2006 - 1:32 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Great first post Redetroit and welcome to the forum. Regarding the fairness of the NEZ discounts, why are the people gaining advantage from it being criticized? If one dislikes it the criticism should solely be directed toward the politicians who enabled it. Those who are benefitting from it can do nothing about it.

Suppose you walked into a store for the first time to buy a computer and a get a huge discount. Your friend who has been shopping at that store for years and bought one a few months earlier at full cost learns about this. Are you the blame?

Attempts to divert that discussion and the responsibility that falls on the politicians who created it is shameful.

Similarly huge handouts are given to businesses all the time, but little is heard of it. It seems that when it can be personalized by an increasingly poor journalistic newspaper, the public can get their knickers in a twist, but when it is a big corporation they just shrug and say that's the way things are.
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Eastsidedog
Member
Username: Eastsidedog

Post Number: 186
Registered: 03-2006
Posted From: 68.20.140.8
Posted on Tuesday, April 11, 2006 - 1:48 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Lowell, all I am saying is that a lot of long time Detroiters resent those who are receiving the NEZs. I never said it was right. They feel that they've stuck it out in the city for years and in return the city is turning around and giving tax breaks to perceived "newcomers" (even though some are moving from within the city). Jealousy, Class and even Race (imagine that) are definitely playing in to how people feel. That anger should be directed towards the politicians, but I believe there is also a fear that the development will dry up which would be even worse. What we need is tax cuts for everyone, not playing favorites based on statements like: "we need to attact middle/upper class residents" or "they won't move here if we don't give them an abatement."

I'll tell you right now that most everyone I know who is middle class isn't buying in Detroit, they are looking to either the old suburbs or BFE.
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Redetroit
Member
Username: Redetroit

Post Number: 6
Registered: 04-2005
Posted From: 68.42.253.39
Posted on Tuesday, April 11, 2006 - 1:49 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Thanks Lowell, I'm glad you see it to. I guess the best thing to do is chase new buyers out of the city, because HOW DARE YOU ACCEPT A TAX BREAK. I guess this city doesn't need any new people, it's stable isn't it. Come on, if they offered a new tax break that gave any new buyers a complete exemption in taxes for a few years, but in turn thousands of people flocked to the city, I wouldn't say a word. Because I understand that in the end this new influx of people will balance out the city's financial struggles. Itsjeff, not that it's anyones business, but my taxes are almost four times what was printed in the paper. This is why I was so upset about the article.
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Sknutson
Member
Username: Sknutson

Post Number: 518
Registered: 03-2004
Posted From: 67.114.23.202
Posted on Tuesday, April 11, 2006 - 1:52 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

js meyers mentioned construction near West Village; fyi, here are pics of two new houses on Townsend.
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Eastsidedog
Member
Username: Eastsidedog

Post Number: 187
Registered: 03-2006
Posted From: 68.20.140.8
Posted on Tuesday, April 11, 2006 - 2:02 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Sknutson, yeah I've seen those. Are those affordable housing? They almost look like it. The English Village townhouses look much better. It's no doubt that the NEZ was a part of making those happen (but so far there's only those 2).

Maybe, people are misunderstanding me but I'm well aware that the NEZ's are driving development in the city which is very, very good. I'd just like to see a phased out drop in the overall millage rate and the income tax rate similar to what Engler agreed to with Archer (but also include scaling back property taxes not just the income tax).

Now here's some more flame for the fire. :-)

Does anyone thing the NEZ designations have hurt the market for existing homes in the city? I think absolutely.
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Itsjeff
Member
Username: Itsjeff

Post Number: 5769
Registered: 10-2003
Posted From: 208.27.111.125
Posted on Tuesday, April 11, 2006 - 2:05 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Itsjeff, not that it's anyones business, but my taxes are almost four times what was printed in the paper.

Whew!
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Eastsidedog
Member
Username: Eastsidedog

Post Number: 188
Registered: 03-2006
Posted From: 68.20.140.8
Posted on Tuesday, April 11, 2006 - 2:10 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

But honestly ReDetroit, what do you plan to do when they move up to the non-NEZ tax rate?
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Jsmyers
Member
Username: Jsmyers

Post Number: 1562
Registered: 12-2003
Posted From: 209.131.7.68
Posted on Tuesday, April 11, 2006 - 2:18 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)


quote:

Does anyone thing the NEZ designations have hurt the market for existing homes in the city? I think absolutely.




Almost certainly not except for a few small exceptions!

The NEZs have help create spin-off development that is not in an NEZ. (A really good NEZ is designed to do this almost above all else.) They have also helped improve the business climate.

Take a look at the growth in Detroit property values over the last 15 years, and compare it to the rise of the NEZ program. Projects facilitated by NEZs have increased confidence in the city.
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Belleislerunner
Member
Username: Belleislerunner

Post Number: 249
Registered: 12-2003
Posted From: 198.204.133.208
Posted on Tuesday, April 11, 2006 - 2:18 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Still he invested nearly $500,000 in his Detroit condo that could have gone elsewhere.
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Itsjeff
Member
Username: Itsjeff

Post Number: 5770
Registered: 10-2003
Posted From: 208.27.111.125
Posted on Tuesday, April 11, 2006 - 2:25 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

No one is begrudging Red his tax break and he can stop portraying himself as a victim any time now.

What had me (and others) cheesed was the seemingly dramatic amount of the break: $1000 a year on an almost half-million dollar home. Red has since explained that the figure was wrong and - not that it's anyone's business - he actually told the reporter that his taxes are closer to $4,000.00. That's in line with what a similarly priced home in the suburbs would be, so I'm fine with it.
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Eric
Member
Username: Eric

Post Number: 420
Registered: 11-2004
Posted From: 35.11.210.161
Posted on Tuesday, April 11, 2006 - 2:46 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Does anyone thing the NEZ designations have hurt the market for existing homes in the city? I think absolutely.


How? NEZ's are in areas where there practically was no housing market and where a unique product was offered. If these people weren't living in the downtown area they'd likely be lving in a suburban downtown
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Eastsidedog
Member
Username: Eastsidedog

Post Number: 190
Registered: 03-2006
Posted From: 68.20.140.8
Posted on Tuesday, April 11, 2006 - 2:50 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)


quote:

Take a look at the growth in Detroit property values over the last 15 years, and compare it to the rise of the NEZ program. Projects facilitated by NEZs have increased confidence in the city.




Jsmeyers, good points. Confidence in the city most certainly has increased but just because property values have gone up and NEZs started at the same doesn't prove the two are related.

It seems to me that many buyers who would like to buy an exsiting older home choose a new construction/rehab with an NEZ for the tax break. The old historic homes are great but they now have to compete with tax-abated properties. I think this is killing the pool of buyers for existing homes. I know a real estate agent who is getting out of the business because there's almost no buyers right now (He specializes in historic homes in Indian Village, West Village, Joseph-Barry and Boston Edison) but on the other hand the NEZ-designated developments seem to be filling up nicely. I could be wrong. Does anyone know if there is a shortage of buyers for the new developments?
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Redetroit
Member
Username: Redetroit

Post Number: 7
Registered: 04-2005
Posted From: 152.163.100.8
Posted on Tuesday, April 11, 2006 - 3:01 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Itsjeff, I'm not trying to portray myself as a victim here, I don't really care. The article was garbage and I made that point already. It's over and done with. I just wanted to make it clear that the information he reported was not even close to the truth, and to voice my opinion on the topic. Good attitude though, it'll really have people rushing back to the city.
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Jsmyers
Member
Username: Jsmyers

Post Number: 1564
Registered: 12-2003
Posted From: 209.131.7.68
Posted on Tuesday, April 11, 2006 - 3:07 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Could it be that those neighborhoods are competing with other large lot (with the exception of West Village) suburban neighborhoods. Those markets have gone down everywhere.

Maybe it is energy prices. Maybe it is a desire to either live way out or right in the middle of it.

Think about it this way: Good NEZs help the city in general, imagewise, long-term finance wise, and WRT business recruitment. That helps these homes, and likely mitigates any direct effects from competition. Considering there are a lot of other reasons to see sales of that type of housing slow, I don't think you can place much (if any) of the blame at NEZ's feet.

It seems logical to me that when the local economy slows that mansion sales will too.

Also, ask your friend about where things are selling. I bet homes near NEZs (West village) aren't slowing much, because they are seeing their neighborhood improving because of them.
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Itsjeff
Member
Username: Itsjeff

Post Number: 5772
Registered: 10-2003
Posted From: 208.27.111.125
Posted on Tuesday, April 11, 2006 - 3:35 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Red, you're concerned that a little swipe at you will stop people from moving into Detroit? Could it be that our ego is a tad bit over the top?
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Redetroit
Member
Username: Redetroit

Post Number: 8
Registered: 04-2005
Posted From: 152.163.100.8
Posted on Tuesday, April 11, 2006 - 3:41 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

I was talking about your attitude.
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Itsjeff
Member
Username: Itsjeff

Post Number: 5773
Registered: 10-2003
Posted From: 208.27.111.125
Posted on Tuesday, April 11, 2006 - 3:47 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

It's how I show my love.
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Track75
Member
Username: Track75

Post Number: 2288
Registered: 10-2003
Posted From: 12.75.21.210
Posted on Tuesday, April 11, 2006 - 3:48 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

I like his attitude, he's SASSY!
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Redetroit
Member
Username: Redetroit

Post Number: 9
Registered: 04-2005
Posted From: 152.163.100.8
Posted on Tuesday, April 11, 2006 - 3:48 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Ha, ok, well since I'm new I guess I'll have to learn.
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Itsjeff
Member
Username: Itsjeff

Post Number: 5774
Registered: 10-2003
Posted From: 208.27.111.125
Posted on Tuesday, April 11, 2006 - 3:53 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Also, new guy at FSC buys all the drinks. See you Thursday.
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Merchantgander
Member
Username: Merchantgander

Post Number: 1725
Registered: 01-2005
Posted From: 68.42.172.120
Posted on Tuesday, April 11, 2006 - 3:53 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Don't worry Itsjeff will teach you.
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Dtwphoenix
Member
Username: Dtwphoenix

Post Number: 46
Registered: 12-2004
Posted From: 63.163.143.242
Posted on Tuesday, April 11, 2006 - 4:06 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

NEZ's provide new residents lower property tax rates for a fixed period of time.

Prop A provides long time residents property tax relief forever.

In a decade or so, I think the expiration of large numbers of NEZ's will allow the city to lower property tax rates across the board.
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Swingline
Member
Username: Swingline

Post Number: 448
Registered: 11-2003
Posted From: 172.151.166.68
Posted on Tuesday, April 11, 2006 - 4:23 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)


quote:

Does anyone think the NEZ designations have hurt the market for existing homes in the city? I think absolutely.


Recent NEZ projects probably have siphoned off some buyers who might otherwise have considered other Detroit neighborhoods with homes in the plus $250K range. But I think that the recent drastic downturn in sales in the high-end Detroit neighborhoods has been caused primarily by the poor overall market conditions.

Eastside, I think I know of the broker you are referring to and I know him to be knowledgeable and successful at selling homes. Has he said that he is leaving the business because there is no longer money to be made, or is it more because he is looking for a career change?
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Jsmyers
Member
Username: Jsmyers

Post Number: 1566
Registered: 12-2003
Posted From: 209.131.7.68
Posted on Tuesday, April 11, 2006 - 4:34 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

From today's News:

http://www.detnews.com/apps/pb cs.dll/article?AID=/20060411/O PINION01/604110304/1007
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Rustic
Member
Username: Rustic

Post Number: 2323
Registered: 10-2003
Posted From: 128.36.14.74
Posted on Tuesday, April 11, 2006 - 4:35 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

"Also, new guy at FSC buys all the drinks. See you Thursday."

In the spirit of the NEZ shouldn't new guys at the FSC drink at subsidized prices?
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Itsjeff
Member
Username: Itsjeff

Post Number: 5777
Registered: 10-2003
Posted From: 208.27.111.125
Posted on Tuesday, April 11, 2006 - 4:45 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Where we drink, there's no need for subsidies.
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Eastsidedog
Member
Username: Eastsidedog

Post Number: 191
Registered: 03-2006
Posted From: 68.20.140.8
Posted on Tuesday, April 11, 2006 - 5:31 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)


quote:

Eastside, I think I know of the broker you are referring to and I know him to be knowledgeable and successful at selling homes. Has he said that he is leaving the business because there is no longer money to be made, or is it more because he is looking for a career change?




Swingline, he says there are no buyers and there has been a lot of funny financing going on, wierd deals, etc. He was our real estate agent and my wife and I were saddedned to learn he was leaving the profession. He did say he might open a bar (with the economy and the NEZs expiring some people are gonna need to do some drinking :-)).

Jsmyers, nothing is moving in WV right now. There's not much for sale either and there wasn't much when we were looking (a good sign). Part of it may be that sellers are pricing their properties too high and are sitting on them waiting for things to get better rather than letting them go for a reasonable price. I think most folks are just sitting out the bad economy until 2007/2008.

It's important to note that contrary to what many think, WV has some very large homes mixed in with the modest homes, apartment buildings and flats. Many of these large homes sell in the $200-300 range which is still a bargain considering they are 3000+ sq. feet. Of course they aren't selling now since there's no buyers.
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Rustic
Member
Username: Rustic

Post Number: 2324
Registered: 10-2003
Posted From: 130.132.177.245
Posted on Tuesday, April 11, 2006 - 5:32 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

itsjeff, ha! ... but ... ya know ... the same could be said for pennies-on-the-dollar Detroit real estate ...

(Message edited by rustic on April 11, 2006)
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Eastsidedog
Member
Username: Eastsidedog

Post Number: 192
Registered: 03-2006
Posted From: 68.20.140.8
Posted on Tuesday, April 11, 2006 - 5:34 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Oh, and there are a lot of people rehabbing as well which is always good. There have been some incredible transformations in the last few years.
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Eastsidedog
Member
Username: Eastsidedog

Post Number: 193
Registered: 03-2006
Posted From: 68.20.140.8
Posted on Tuesday, April 11, 2006 - 5:35 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

I think those with NEZs should pay for half of non-NEZers drinks.
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Eastsidedog
Member
Username: Eastsidedog

Post Number: 195
Registered: 03-2006
Posted From: 68.20.140.8
Posted on Tuesday, April 11, 2006 - 5:39 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

A good follow up article from our favorite newspaper:

http://www.detnews.com/apps/pb cs.dll/article?AID=/20060411/O PINION01/604110304/1007
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Darwinism
Member
Username: Darwinism

Post Number: 468
Registered: 06-2005
Posted From: 69.209.164.121
Posted on Tuesday, April 11, 2006 - 6:45 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Eastsidedog: Is there a way to contact you through e-mail ? Got some questions about West Village.
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Eastsidedog
Member
Username: Eastsidedog

Post Number: 202
Registered: 03-2006
Posted From: 68.20.140.8
Posted on Tuesday, April 11, 2006 - 6:46 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

I'll page you on connections.
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Tomoh
Member
Username: Tomoh

Post Number: 141
Registered: 11-2004
Posted From: 68.40.176.163
Posted on Wednesday, April 12, 2006 - 1:23 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

I see this article as yet more proof of the Detroit News as a suburban newspaper willing to publish false information to make the city of Detroit look bad in order to sell papers to those who have also grown to love hating Detroit. Not that there's not any true statement or that NEZs are not without specific attributes which could be tweaked. It's just very slanted and Mr. Josar fails to do much math.
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Tomoh
Member
Username: Tomoh

Post Number: 142
Registered: 11-2004
Posted From: 68.40.176.163
Posted on Wednesday, April 12, 2006 - 1:46 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Scaling back taxes for everyone in Detroit slightly won't work yet because they're so high to begin with. That's why drastically reducing them to entice a select demographic is a better idea especially when it comes to new developments -- Detroit has too many detached homes and not enough dense multi-unit housing. It's not at all about who deserves a break but whose decisions can be most strongly influenced by a break. Things will have to continue to be 'unfair' in the short term. Making city government more efficient with what taxes it already collects is another issue.

All the people living in NEZs are paying income taxes, don't forget. They're also more likely to spend more of their dollars within city limits. But the NEZs should be set up to attract people moving in from out of the city or preempt them from moving out of the city. Anyways, NEZs are necessary to bring around the neighborhoods that will positively contribute to Detroit's image, like Brush Park.

The article did a good job dishonestly pointing out individual situations where taxes in NEZs could be higher while still achieving the goal of retaining people. It didn't take the necessary step in reporting the times where NEZs made perfect sense.

Redetroit, welcome to the forum. I think you contribute tremendously to the city of Detroit and have been a catalyst in causing others to do the same.
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Redetroit
Member
Username: Redetroit

Post Number: 10
Registered: 04-2005
Posted From: 152.163.100.8
Posted on Wednesday, April 12, 2006 - 11:30 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Thank you Tomoh, there's another thing that I did a little research on, which of course David Josar chooses to omit. He states that the Lofts at Rivertown only pays a total of $400,000 a year in city property taxes, and that the real number should be closer to $800,000 without the abatement. Well, of course Mr. Josar doesn't print that as an apartment building, the Lofts was only generating $98,000 in property taxes a year to the city. So, let's see, the city has gained nearly 172 new and/or retained residents (that may have left the city) from that building, increased home ownership in the city, and increased the taxes generated from that property by over $300,000. Why did you leave that out JOSAR?
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Eastsidedog
Member
Username: Eastsidedog

Post Number: 205
Registered: 03-2006
Posted From: 68.20.140.8
Posted on Wednesday, April 12, 2006 - 1:01 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)


quote:

They're also more likely to spend more of their dollars within city limits.




Pure hogwash. If anything they are more likely to spend it outside of city limits that the average Detroit resident because they are of higher income and likely have access to a car. I can't even begin to tell you how many middle/upper class city dwellers do their grocery shopping in the suburbs (as well as get their hair cut in the burbs, go to Home Depot in the burbs, etc, etc.). Many buy beer, gas and restaurant food in the city and that's it. Even Kilpatrick shops at Whole Foods in the burbs but at least he supplements it with the Farmer Jack on Jefferson. City council members can be seen shopping at Holiday Market in RO too.

I do 100% of my grocery shopping in the city. I wish I could motivate more middle/upper income city dwellers to do the same. And don't give that "no good grocery stores" crap, it's just untrue (I shop at Eastern Market, IV Market, Avalon, and R. Hirt).
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Jfried
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Username: Jfried

Post Number: 799
Registered: 11-2003
Posted From: 69.47.87.96
Posted on Wednesday, April 12, 2006 - 4:20 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

wow, you "do 100% of your shopping in the city." how does it feel to be so much better than the rest of us?! yeah.

eastside you make some huge generalizations. sure "you know of" many detroiters who shop in the suburbs, but do you have any numbers to back that up for the rest of the city?

to follow your argument that "all" people who live in NEZs are rich, elitests, wouldn't those people have more expendable income than the average city resident? you have this arguement that these people are all in these fortified gated communities but the truth is, that most of these young singles, and couples are the ones out spending money everynight. and while it might be convenient for people on the outskirts of town, or those who work out there to do their shopping in the burbs, most of the NEZ districts are clustered near midtown, or the riverfront, or near other areas that have very good access to great grocery stores, and I see my neighbors in these places all the time.

I think its great that people like eastside, or itsjeff purchased, rehabbed and maintain single family homes, but the smugness that this makes you more of a "real detroiter" is getting old. My neighbors and I are involved in the community, volunteer, sit on non-profit boards, are starting businesses in the city, and it is offensive that anyone would accuse us of "stealing" from the city. the people in the new condo's have NEZ, but don't forget that single family homes are protected by prop A, which limits your increase in value - values that are ALL hugely underestimated throughout the city.

the fact is that until the city's property tax structure is completely overhauled there is no way that any of this condo development would occur. the developers on these projects are not getting rich - the NEZ simply allows the properties to be sold at a price point that covers the developers cost + a modest profit. if the developers can't make money they will simply decide to abandon the city again.....

I could go on and on, but I guess I'll just ask eastside and itsjeff if they plan on passing up the opportunity to reduce their taxes when the Neighborhood NEZ is approved for West Village?????? I'm interested in seeing how your tones chance then.
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Jfried
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Username: Jfried

Post Number: 800
Registered: 11-2003
Posted From: 69.47.87.96
Posted on Wednesday, April 12, 2006 - 4:25 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

and......you guys have a lot of nerve. I don't know the kid, but to accuse Curis of "stealing" from the city is ridiculous. I'm pretty confident in saying that his family has taken huge risks and invested more money in commercial development in this city than anyone on this board.
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Redetroit
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Username: Redetroit

Post Number: 11
Registered: 04-2005
Posted From: 205.188.116.137
Posted on Wednesday, April 12, 2006 - 5:35 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

This is why I was hesitant to be involved in this article in the first place, because people do have their opinions on the topic....and they are entitled to them. I can understand how difficult it may be for residents who've been here their whole lives and have been basically passed up on. I've come to the conclusion that "personally" I do not feel as though the NEZ is a double edged sword. I think, and hope, that in the end the new influx of development and residents will stabalize our crumbling economy. I do, however, feel that having a conversation about NEZ's is a double-edged sword because it is such an opinionated topic and there are no answers set in stone. You can't blame residents without the abatement for being upset, just as you can't blame residents for capitalizing on the abatement. By the way, I was just notified that the News will be printing another spin on this story, but this time in a positive manner. I guess Mr. Josar is under some serious fire right now. Ask me if I feel bad...
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Redetroit
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Username: Redetroit

Post Number: 12
Registered: 04-2005
Posted From: 205.188.116.137
Posted on Wednesday, April 12, 2006 - 5:36 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

By the way, thanks Jfried.
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Eastsidedog
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Username: Eastsidedog

Post Number: 219
Registered: 03-2006
Posted From: 68.20.140.8
Posted on Wednesday, April 12, 2006 - 5:46 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Jfried, first of all I don't even live in West Village, technically I'm in Islandview, and it'll be a long long time before any tax break crap makes its way over here -- at least for existing homes. As far as prop A goes it should be eliminated too and just let the free market work. As far as shopping in the city I'm just speaking from experience. I've never seen a neighbor in IV, or Farmer Jack or Harbortown. I've run into a guy I new fromt he Cass Corridor at Avalon once. Most folks I know shop at Meijer, Kroger in Gross Point, or Trader Joes, they ain't doing there everyday shopping in the city for reasons which are their own.


quote:

I think its great that people like eastside, or itsjeff purchased, rehabbed and maintain single family homes, but the smugness that this makes you more of a "real detroiter" is getting old. My neighbors and I are involved in the community, volunteer, sit on non-profit boards, are starting businesses in the city, and it is offensive that anyone would accuse us of "stealing" from the city.




Call it what you want but a tax break is a hand out whether you've a corporate behemoth, or an NEZ homeowner. The point of this discussion is whether handouts are necessary to stimulate revitalization. As I stated in previous posts there is no doubt that the NEZs are playing a part in the new construction that the city badly needs (which in the end is good). But I think revitalization would be better achieved with improved collection of property taxes, improved assessment of properties (the city does a deplorable job with this right now), and a gradually reduced millage rate. NEZs IMO are just government meddling to get a quick infusion of new development -- a quick fix (they don't address the intrinsic problem of an incredibly high millage rate). It definitely worked to jumpstart downtown for SBXL. But now I feel the validity of them needs to be revisited. Maybe they could just be scaled back with a plan to gradually reduce the millage rate so that when they expire folk in NEZs won't flee to a new NEZ.


quote:

to follow your argument that "all" people who live in NEZs are rich, elitests, wouldn't those people have more expendable income than the average city resident? you have this arguement that these people are all in these fortified gated communities but the truth is, that most of these young singles, and couples are the ones out spending money everynight.




Compared to the average Detroiter residents like ReDetroit are rich beyond belief. People in Detroit are so damn poor that some folks don't have electricity or heat. A house up the street just got power on. I never noticed they had no electricity until all of a sudden it was lit up at night (but they'd been living there all along).


quote:

I'm pretty confident in saying that his family has taken huge risks and invested more money in commercial development in this city than anyone on this board.




Well I guess that makes him a "better" Detroiter than the rest of us pee-ons. I apologize that my family has no money to invest in the city. Sorry I had to work my way through school taking the crappy bus. No I don't have a lot of time to sit on boards and volunteer. But if you want me to talk about all the great things I do for the city, my wife and I watch my neighbors 4 year old, I'm hooking up my neighbor with free wireless internet, I plant trees, clean up trash, clean out the alleys. It may not be much compared to all your non-profit commitees and boards but it's what I can do.

We all have some amount to give to the city, some more that others and in different ways. In the end we're all Detroiters, we're all neighbors. If there were no complicated NEZs playing favorites, No Proposal A crap, and the city just gradually lowered the damn tax rate we wouldn't be having this conversation.

Sorry for the long ass post.

(Message edited by eastsidedog on April 12, 2006)
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Eastsidedog
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Username: Eastsidedog

Post Number: 220
Registered: 03-2006
Posted From: 68.20.140.8
Posted on Wednesday, April 12, 2006 - 5:53 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)


quote:

to follow your argument that "all" people who live in NEZs are rich, elitests, wouldn't those people have more expendable income than the average city resident? you have this arguement that these people are all in these fortified gated communities but the truth is, that most of these young singles, and couples are the ones out spending money everynight.



Sorry Jfried, I missed your point. It's a wild assumption to assume that because someone is rich they are out spending money all the time. You don't get rich by spending money. If anything the rich are tighter with their cash than the poor, with the exception of the Nouveau Rich.
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Swingline
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Username: Swingline

Post Number: 455
Registered: 11-2003
Posted From: 172.131.184.98
Posted on Wednesday, April 12, 2006 - 6:06 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

DTWPhoenix and Jfried make good points about the property tax "relief" provided to existing homeowners by Prop A over a decade ago. While Prop A has some good features, I've ranted before about how Detroit screwed itself when Prop A came into effect.

Without going through the whole thing and beating it to death, suffice to say that Detroit screwed itself for many years by chronically under-assessing all kinds of property in the city. By 1995, thousands and thousands of people living in $80K-$100K homes whose SEV's should have been $40K-$50K actually had SEV's in the $15K-$30K range. Prop A's cap on annual increases locked in artificially low taxes for all these homeowners. Prop A is causing problems in all older cities that were built out prior to 1995, but Detroit's problem is substantially worse because of incompetence in the assessor's office.

Now, as a result we have plenty of long-term Detroit homeowners living in $100K-$150K who have tax bills of $2000 or less. In other words, an amount comparable to or less than homes of similar value in the suburbs. These folks certainly have no grounds to complain about the NEZ's.

(Message edited by swingline on April 12, 2006)
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Itsjeff
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Username: Itsjeff

Post Number: 5782
Registered: 10-2003
Posted From: 69.242.213.167
Posted on Wednesday, April 12, 2006 - 6:37 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

More NEZ grants in Detroit:

http://www.livingcities.org/si tes_cities_detroit_success.htm

http://www.nefinc.org/HomePage /Highlights/downloadFile.asp?F ile=morningside.pdf

Or the North Corktown Infill project.....

Or many of the projects done by Core City


The NEZ creates homeownership across a broad spectrum of people. For Josar to have singled out Curis while ignoring dozens and dozens of families in Morningside was slanted journalism at its worst. If the article contributes to the closure of the NEZ he will have helped destroy lives and dreams for those that can least afford it.
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Eastsidedog
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Username: Eastsidedog

Post Number: 221
Registered: 03-2006
Posted From: 68.20.140.8
Posted on Wednesday, April 12, 2006 - 6:39 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)


quote:

Now, as a result we have plenty of long-term Detroit homeowners living in $100K-$150K who have tax bills of $2000 or less.




THANK YOU SWINGLINE. But actually many have more like $400 tax bills. The assessors office is so incompetent it's incredible. They almost exclusively assess the "nice" neighborhoods (i.e. IV, BE, PW, etc.) This is what REALLY needs to be fixed. If the damn government had never meddled with Prop A and the NEZs in the first place we wouldn't have this horribly fucked up tax problem. The NEZs aren't solving the underlying problem. They are just a quick fix.

But hey, no one asked me. I voted but my guy didn't win.
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J_stone
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Username: J_stone

Post Number: 286
Registered: 10-2003
Posted From: 65.215.68.210
Posted on Wednesday, April 12, 2006 - 6:48 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Guys - 5 years ago, I bought a condo in Woodbridge. I was a first time buyer, as were most of the people that bought there. It was a small community, only 14 units. People might call them lofts, but they were former apartments, turned condo. I didn't know a thing about NEZ's, SEV's, mortgages, and the like. All I know, was that I was told my taxes would be no more than $1200 a year.

I was at the maximum of what I could afford, as many new home owners are, but I was able to make ends meet. It was do-able.

A year and a half later, I found out that our place wasn't NEZ (at the time), and that my taxes would be $4500.00 a year. Do the math. That's $275 more a month in taxes. Also, the bank wanted the money back in the escrow shortage from the previous year, so my monthly payment actually went up by $500.00. I was f'd.

I have since moved from there, and some of the tax burden has been diverted through the developer and somehow through the city, but without that NEZ(or the lie of the NEZ), the project would have never happened.

I would have loved to buy an old house for the same amount of money, but the taxes are just way too high. Now maybe 10 years ago, it would have been okay to offset the higher taxes with the bargain price of said house, but now, the houses in Woodbridge are 2-3 times their former value. No thank you. Not when you add up all of the other challenges that come along with Detroit living.

I agree, we need to lower the millage as whole across the board. We need to whack the city income taxes. Until then, why not have NEZ's?

I know it sucks for people who have nice houses, and want to move. They're screwed because nobody wants to pay the taxes. I understand their beef.

They key is, buy a run down house on an NEZ parcell, and buy it cheap. Follow, the NEZ process, get your construction loans, and at the end, you have a beautifully restored house, and really cheap taxes. Take the money you save, and use that to offset higher insurnace and the income tax.
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Eastsidedog
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Username: Eastsidedog

Post Number: 222
Registered: 03-2006
Posted From: 68.20.140.8
Posted on Wednesday, April 12, 2006 - 6:53 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

A good perspective J_stone, but how did your taxes shoot up that high with Prop A? Am I missing something here?
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Northend
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Username: Northend

Post Number: 874
Registered: 10-2005
Posted From: 69.220.232.15
Posted on Wednesday, April 12, 2006 - 7:01 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Personnaly I would have not moved to Detroit if my property taxes were $10K/yr.
As much I like living in the CoD, nothing from city services to quality of schools, roads, etc justifies such a tax bill.
Actually, the NEZ allows me to save $$$ so that as soon as my NEZ expires, I'll take my savings and move to....say Livonia :-)
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Mbr
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Username: Mbr

Post Number: 58
Registered: 03-2005
Posted From: 152.160.42.163
Posted on Wednesday, April 12, 2006 - 7:06 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Northend - Why not just move to a new NEZ in Detroit when it expires?



(Message edited by mbr on April 12, 2006)
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Northend
Member
Username: Northend

Post Number: 877
Registered: 10-2005
Posted From: 69.220.232.15
Posted on Wednesday, April 12, 2006 - 7:14 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

mbr, actually, it's already in the works..
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Jsmyers
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Username: Jsmyers

Post Number: 1594
Registered: 12-2003
Posted From: 209.131.7.68
Posted on Wednesday, April 12, 2006 - 7:19 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)


quote:

Jfried, first of all I don't even live in West Village, technically I'm in Islandview, and it'll be a long long time before any tax break crap makes its way over here -- at least for existing homes.



Uhhhh, Eastside, they are already there:

I'm sure you recognize these:
http://www.royalhomes.com/cont act/communities/englishvillage /neighborhood/index.html
I'm 99.9% sure they are NEZ status. I had a NEZ map from the city last year. This site is more concerned with selling prefabs than homes already in the ground, so it is sparse with information.

Just on the other side of IV:
http://www.eastvillagehomesdet roit.com/
This non-profit has plans to build large number of homes just SE of IV. Last I knew, they were working on lowering their construction costs to meet an affordability goal, and continue the project.

These (and other) developments in your neighborhood are removing blight and vacancy and have greatly improved your property value...largely because of NEZ. This is one case where the NEZ has functioned perfectly.

BTW - NEZs can only be granted when the project is a certain percentage of new construction (by cost, including cost of major renovation). Only with the recent amendment to the law can NEZs even be considered for existing homes.


quote:

NEZs IMO are just government meddling to get a quick infusion of new development -- a quick fix (they don't address the intrinsic problem of an incredibly high millage rate). It definitely worked to jumpstart downtown for SBXL. But now I feel the validity of them needs to be revisited. Maybe they could just be scaled back with a plan to gradually reduce the millage rate so that when they expire folk in NEZs won't flee to a new NEZ.



I agree there is some tweeking needed in the application of NEZs. I also agree that many of the things you mention can help the city. But you are not understanding the purpose of NEZs.

The intrinsic problem NEZ address is a lack of a housing market in an abandoned area. The purpose is to jump start activity. (Which we have seen is not by any means downtown, actually VERY few are.) The activity is meant to increase confidence in a neighborhood, enticing owners of existing properties to invest money for improvements, greatly improving the area for all.

It is also to create a tax-paying home owner where previously only vacant land or buildings stood. The fact that the city doesn't get all of the tax revenue for a decade is virtually the only cost of the program. When the decade is up (remember how long homes can last) the city has more tax revenue and a healthy neighborhood to show for it.

I don't know anything about your specific block, but your area has benefited greatly from this program.


quote:

But if you want me to talk about all the great things I do for the city, my wife and I watch my neighbors 4 year old, I'm hooking up my neighbor with free wireless internet, I plant trees, clean up trash, clean out the alleys. It may not be much compared to all your non-profit commitees and boards but it's what I can do.



Thank you for doing what you can do. We all have different ways of contributing to community. It sounds like you have found some great ones.
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Jsmyers
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Username: Jsmyers

Post Number: 1595
Registered: 12-2003
Posted From: 209.131.7.68
Posted on Wednesday, April 12, 2006 - 7:27 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Remember that when a home is sold, the Prop A limit flies out the window and starts over at a new value. I suspect that is what happened to J_stone. The seller told them what they paid, not realizing that the new selling price would drastically affect the rate. It just took way to long for the change to register on the tax bill.

Think about what J_stone wrote:

quote:

Now maybe 10 years ago, it would have been okay to offset the higher taxes with the bargain price of said house, but now, the houses in Woodbridge are 2-3 times their former value.



The high taxes might keep J_stone away, but the homes wouldn't sell for nearly as much if people weren't willing to pay the taxes. Also, about 10 years ago, the first NEZ started. I don't think it is only a coincidence. (Of course there are a lot of other factors too.)
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Eastsidedog
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Username: Eastsidedog

Post Number: 223
Registered: 03-2006
Posted From: 68.79.118.106
Posted on Wednesday, April 12, 2006 - 8:25 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)


quote:

The intrinsic problem NEZ address is a lack of a housing market in an abandoned area. The purpose is to jump start activity. (Which we have seen is not by any means downtown, actually VERY few are.) The activity is meant to increase confidence in a neighborhood, enticing owners of existing properties to invest money for improvements, greatly improving the area for all.





quote:

IMHO, an example of a project that probably doesn't deserve NEZ status:

http://www.modeldmedia.com/dev elopmentnews/stregis40.aspx




Two very good points.

It seems that the real problem is that NEZs are being abused. Some NEZs are not fulfilling the original intention of NEZs and that is what's really angering people including myself. I am more than happy that English Village is nearby. It is way better than vacant land and has resulted in a much better neighborhood. And it's not gated, it's just regular townhouses. They fit pretty well into the neighborhood. Hopefully this summer the Lofts in St. Charles High School will really get started.

I think I'm coming to understand what the real original purpose of the NEZs were and how they are now being abused (converting rentals to condos). Maybe I'll turn a corner in my thinking by the end of this thread. :-)
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Jsmyers
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Username: Jsmyers

Post Number: 1601
Registered: 12-2003
Posted From: 209.131.7.68
Posted on Wednesday, April 12, 2006 - 8:29 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)


quote:

I think I'm coming to understand what the real original purpose of the NEZs were



Don't forget to subsidize owner occupied housing for the lower-middle class.

Also don't forget that the vast majority of NEZs are townhome or SF construction or rehabs of previously vacant property.

I'm also 99% sure that not all NEZs necessarily get the same tax reduction...but I could be wrong.
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Llyn
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Username: Llyn

Post Number: 1500
Registered: 06-2004
Posted From: 68.61.197.206
Posted on Wednesday, April 12, 2006 - 9:32 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

What the city needs to avoid is a polarized discussion on this point. I can only wish that city leaders and the media and the people recognize the two sides to this issue.

The use of the NEZ as a development tool is helping the city increase its tax base.

The abuse of the NEZ is that the poor - well, the middle class - in some instances are subsidizing the rich - well, the upper middle class - who are getting these ridiculous, or should I say rediculous, tax breaks.

Making taxes more palatable across the board would help. I pay half to two thirds more what I would pay in the suburbs. That is certainly not "competitive".

By the way, who's idiotic idea was it to make that story the lead...
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Tomoh
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Username: Tomoh

Post Number: 146
Registered: 11-2004
Posted From: 68.40.176.163
Posted on Wednesday, April 12, 2006 - 11:03 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Eastsidedog, you called my statement that NEZ dwellers were more likely than others to shop and dine in the city as "pure hogwash". The converse is to say that those who stay or move out to the suburbs rather than moving into an NEZ are more likely to shop and dine in Detroit, which is insupportable. Also, I wouldn't downplay the impact of simply drinking and eating in the city as that can easily be more than the monthly cost of groceries, yet has the added benefit of supporting those businesses, bars and restaurants, that will attract suburbanites to the city in the evening as well as to move. Not all of the NEZ folks are well-to-do but we can be grateful that NEZs spur developments that attract the well-heeled to live and spend their higher expendable income in the city rather than in the suburbs. The Detroit News article didn't touch on this at all.

But I wish you success in convincing more middle income Detroiters (as well as suburbanites) in doing more of their shopping, as well as dining, in the city.
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Eastsidedog
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Username: Eastsidedog

Post Number: 227
Registered: 03-2006
Posted From: 68.79.118.106
Posted on Thursday, April 13, 2006 - 12:09 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Tomoh, theorizing about how much city dwellers spend in the city is all hearsay. I'm just speaking from experience. Yes, some people are phat paid and eat all their meals out and party all the time running up huge tabs, but that's not the reality of most people. And it's probably not the reality of many well-heeled Detroiters whether they are in NEZs or not. You don't build wealth by spending, but rather by saving.

Folks will shop where they want to for their own reasons, be it convenience, customer service, prices, selection, what have you. It think it's pretty convenient to shop within a few miles of home, but many would rather drive way out to the suburbs for their own reasons. Studies have shown that when you spend in the neighborhood, that money cycles through the neighborhood.
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Jfried
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Username: Jfried

Post Number: 802
Registered: 11-2003
Posted From: 69.47.87.96
Posted on Thursday, April 13, 2006 - 12:50 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

eastside - I think you missed my point when I listed some of things that NEZ owners I personally know have done to improve the community. In no way was I saying you weren't adding to the community, it's just that there are many people who have benefited by tax incentives that are doing a huge amount for the city and you seem to give no credit there.

Again, I definitely agree that the whole concept of property taxes in the city must be overhauled, but until that happens, these new developments do not make economic sense to the developers, or potential residents.

Jsmeyers did a pretty good job pointing out that most of these NEZ's are used to redevelop vacant, or very blighted properties. Are the credits abused at times? I'm sure they are, but in the long run all these developments will help the city.

I'm also going to have to dispute the notion that using NEZs to aid the conversion of rentals to owner occupied. Most of these may be upscale (riverfront, cbd) but the amount of taxes that will be collected in the future far out weigh the benefits to the "rich." REdetrioit mentioned that thru his research he found that before condo conversion his building was generating approx. 98k per year in taxes for the city, compared to the 400k that will be paid by homeowners this year, which will more than triple within 12 years. how is this not good for the city in the long run?

And this whole notion that only the "rich" benefit. While there is a huge range of people who have moved into the new city developments, some rich, some way below average - retirees, city workers, married couples, college students, etc. I think you will find that most of the new residents are same young, interactive people you would expect to find in other big US cities. People who make decent livings out of college, but are by no means rich, and have increasingly less reasons to stay here. There are very few options in this region for these types who desire urban living, so we need to do our best to keep them here. NEZs are not the answer, but they are a good tool until we do find the answer.
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1honey
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Username: 1honey

Post Number: 133
Registered: 02-2005
Posted From: 64.12.116.204
Posted on Thursday, April 13, 2006 - 12:53 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Get rid of Prop A. Same thing happened to me Jstone, taxes were 1,200 when I purchased my home and shot up pass 4,500 in 4 years. But, you were blessed to be able to get out of your property, hell I can't move YET!!! Just trying to hold on another 3 or 4 years.

Good point "I agree, we need to lower the millage as whole across the board". We need to whack the city income taxes. Until then, why not have NEZ's? FOR EVERYONE!!!
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Jfried
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Username: Jfried

Post Number: 803
Registered: 11-2003
Posted From: 69.47.87.96
Posted on Thursday, April 13, 2006 - 12:55 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

to follow up on jsmeyers comment that the intent of the NEZ is to spur confidence in investing in these blighted neighborhoods. the NEZ statute was ammended so that a community's governing body can approve the length of the NEZ term from anywhere between 6-12 years (15 if historic tax credits are used) so a community can award the length of the incentive relative to the encouragement a specific neighborhood needs.

and this isn't a detroit specific argument. nezs are used in core communities throughout michigan, and their necessity is almost always challenged.
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Toolbox
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Username: Toolbox

Post Number: 888
Registered: 10-2003
Posted From: 66.184.29.148
Posted on Thursday, April 13, 2006 - 1:48 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

J_stone got fucked by a developer who did not file the NEZ paperwork correctly.

He has since moved into a place that kicks the ass of his previous condo and is a much better bang for the buck. His current place is something most would have ran from or bulldozed and started over. If not for the dedication of a Detroiter with vision and a clue on how the system works.
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J_stone
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Username: J_stone

Post Number: 287
Registered: 10-2003
Posted From: 65.215.68.210
Posted on Thursday, April 13, 2006 - 2:45 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Thank you TB - Actually though, I wouldn't say it was a paperwork snafu. The area we lived in, was never an NEZ zone. Council had never designated it as such, so saying it was a paperwork problem is a stretch.

The land did eventually become NEZ, but only after a years study with the planning department, and a vote by the CC. Too bad all of the work had long been done. That, in among itself, didn't change any of the taxes. The next step, was to have specific legislation passed in Lansing, to allow the development retro-NEZ status, but I have no idea where that stands now.
I do know that the taxes were considerably reduced, but I wouldn't claim to know "how" that happened.

There is a house around the corner that is maybe worth $20K (Very rough - but probably better shape than my current house was) If you could convince the owner to sell, after a lot of work, you could have a sweet house, and really low taxes.

If not for the courage of the fearless...uh "Detroiter"...the little house would be lost. The house would be lost.

I just took over, where he left off. If he still posted here, he could tell you guys all about the NEZ process, and how well it worked out. Knowing is half the battle. The kid is sorta smart.
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Eastsidedog
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Username: Eastsidedog

Post Number: 233
Registered: 03-2006
Posted From: 12.47.224.7
Posted on Thursday, April 13, 2006 - 6:05 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)


quote:

I'm also going to have to dispute the notion that using NEZs to aid the conversion of rentals to owner occupied. Most of these may be upscale (riverfront, cbd) but the amount of taxes that will be collected in the future far out weigh the benefits to the "rich." REdetrioit mentioned that thru his research he found that before condo conversion his building was generating approx. 98k per year in taxes for the city, compared to the 400k that will be paid by homeowners this year, which will more than triple within 12 years. how is this not good for the city in the long run?



So what you're saying is that what is good for the upper class is good for Detroit. Good. Good. Why don't you ask the few renters who are left in the Park Shelton how they feel about that. But hey, the city gets more taxes. It's like the law that recently passed in Congress that says cities have the right to use Eminent Domain powers to sieze property for private development to increase their tax base. This is so unjust it just leaves a bad taste in my mouth.

There's nothing wrong with the owner of a building turning it from rental to condo (the owner of the property has the right to do whatever they want with their property), but the city shouldn't be offering tax breaks to those who displace the poor and working class. All this boo-hooing of rentals is really elitist. Rentals serve a purpose. I used to rent. Was I evil or something? Like I said previously, not everyone wants longterm of mortgage debt.
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Tomoh
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Username: Tomoh

Post Number: 148
Registered: 11-2004
Posted From: 68.40.176.163
Posted on Thursday, April 13, 2006 - 6:41 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Eastsidedog, even you are willing to admit that the new Detroit residents will be buying gas, beer, and dinners in the city. I really think you're in the minority of followers of the theory that people who live in the city somehow on average spend less in the city than those who live in Novi. Are you also saying that the amount of dining out that residents do inside the city, whether it's once a week or 7 days a week, is insignificant in measuring the success of these NEZs?

There's certainly people in the city who will drive out to the suburbs to do some grocery shopping for whatever reason. But the percentage of suburbanites who drive into the city to do their grocery shopping is certainly drastically less. Increasing the number who live in the city will increase the number who grocery shop in the city.

You've stated a number of times that people get rich by saving, which is true up to the point where you're not rich if you've spent it all. But to assert that the wealthy spend less money than the poor is crazy.
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Eastsidedog
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Username: Eastsidedog

Post Number: 239
Registered: 03-2006
Posted From: 68.20.140.8
Posted on Thursday, April 13, 2006 - 7:18 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)


quote:

I really think you're in the minority of followers of the theory that people who live in the city somehow on average spend less in the city than those who live in Novi.



What are you talking about?

The 1/3 of city residents who don't have cars shop in the city for groceries every week, And most other low income folks also do, and even if they have a car, they probably do too. These are the folks supporting the basic everyday small businesses in the city. They dwarf the number of upper class residents who shop at Harbortown by 100 to 1.


quote:

You've stated a number of times that people get rich by saving, which is true up to the point where you're not rich if you've spent it all. But to assert that the wealthy spend less money than the poor is crazy.




What I'm getting at is that there is a big gap in the percentage of income spent by the poor vs. the rich on living expenses. Many poor folks spend like 30-50% on rent. The rich don't spend nearly that. If you're making $15k a year, you are probably not saving squat. If you are making $100k a year you are probably have the means to save a good chunk (at least I would hope so)! This is why the poor are not homeowners because they can't save for a down payment (of course their are ways around this now which is dubious at best). This is why homeless people live in hotels, because they can't get a deposit together for an apartment. On top of that the poor usually have poorer finances. I can't even tell you how many times I've been at the grocery store and seen someone buying 20 individual 20oz. bottles of faygo in all different flavors when they could by 12 packs for $5. Poor money management by the poor is really sad. Have you ever seen someone buy single 12oz. cans of beer or loose cigarettes in a party store in Detroit? It's so sad, the poor are getting ripped off every day while the rich go to Costco and by steaks in bulk.

Ultimately, any additional money being spent in the city is good. The upper income NEZs are definitely bringing more cash flow to city businesses. But to think that all these young upper income city dwellers moving into the city are going to spend like crazy and cause gourment groceries to pop up like dandelions is crazy talk. I'd guess that Harbortown, the only "gourmet" grocery store in the city, barely gets by (it always seems a little dingy and is out of things, signs that they are cutting costs), probably because most upper income folks shop at Costco and high end suburban supermarkets just like their suburban counterparts.
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Tomoh
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Username: Tomoh

Post Number: 149
Registered: 11-2004
Posted From: 68.40.176.163
Posted on Thursday, April 13, 2006 - 9:59 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

The percentage of income that a low-income versus high-income group spend doesn't matter for a dollar to dollar comparison. So the higher income group still spends more per person and can easily support more square footage of retail in the city even if they don't buy everything in the city. That the poor should be better at managing money and trying to get out of poverty is a separate, important issue. It is indeed sad to see a high percentage of a person's income going towards supporting a local party store one cigarette or beer at a time.

It is not the new NEZ residents' fault that there's no gourmet or health food or whatever type of grocery store they're looking for nearby, but I think we should support them moving in despite the lack of amenities. And if it isn't increasing the density of residents with discerning taste and disposable income that will bring in such grocery stores, I really can't think of what will (without getting creative). Retail, all types of retail, will follow residential. The city suffers from a lack of diversity in retail options that NEZs indirectly support.
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Jfried
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Username: Jfried

Post Number: 805
Registered: 11-2003
Posted From: 69.47.87.96
Posted on Friday, April 14, 2006 - 12:55 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

eastside said:
There's nothing wrong with the owner of a building turning it from rental to condo (the owner of the property has the right to do whatever they want with their property), but the city shouldn't be offering tax breaks to those who displace the poor and working class. All this boo-hooing of rentals is really elitist.


the rentals that have been to converted condos were already luxury residences, so I don't know where your getting your ideas about displacement of the poor.
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Eastsidedog
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Username: Eastsidedog

Post Number: 240
Registered: 03-2006
Posted From: 68.252.69.100
Posted on Sunday, April 16, 2006 - 10:39 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Jfried, the Park Shelton wasn't really luxury, it was just an average apartment building from what I gather. My wife and I went to the Park Shelton and looked at a couple units (we already owned our house, we were just curious). When getting on the elevator a more shabbily dressed woman who didn't walk too well got on the other elevator, the woman showing us the place made a snide comment about "oh, that's a RENTER don't worry, she'll be out of here soon." It was said in a very condesending voice. It was a really snooty thing to say. Kind of disturbing.

The Garden Court however definitely was a luxury apartment building. I wonder how many renters became owners there?

Really though, all in all, Detroit has almost no gentrification. going on. The Park Shelton is the only one I can think of. There is so much empty space and buildings that it will likely be a long time before the poor have to move.


quote:

The percentage of income that a low-income versus high-income group spend doesn't matter for a dollar to dollar comparison. So the higher income group still spends more per person and can easily support more square footage of retail in the city even if they don't buy everything in the city.




Tomoh, the higher income group can theoretically spend more per person, but the poor out number the rich in Detroit by like 100 to 1. That's buying power in numbers. If I was opening a business in Detroit for pure cashflow, I'd have to be a party store, definitely not a gourmet grocery. Perhaps when there is a critical mass of middle/upper income Detroiters, it would be a good idea to open a gourmet grocery store but until then the small gourmet shops will have to do (R. Hirt, Avalon, etc.) .

To tell you the truth, I've come to terms with the fact that new NEZ-qualifying residents are good when they are replacing vacant land, but replacing renters, whether they are rich, middle-class or poor, just doesn't seem right. The whole obsession with making every last human being a homeowner is part of the reason why foreclosure rates are so high. Some people just don't have the financial wherewithal to be homeowners. All the funny SmartARM, no-interest loans are half the problem, the other half in the poor economy IMO.
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Ron
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Username: Ron

Post Number: 44
Registered: 03-2006
Posted From: 66.174.93.100
Posted on Sunday, April 16, 2006 - 3:00 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

ESD,

I agree that not all people are meant to be homeowners, and I also agree with you on the fact re: the high incidence of foreclosure, etc. I think that many creditors, from mortgage companies to credit card companies, throw credit at people who do not need it.

However, (and I don't know if your opposition is to my proposal specifically or not, so forgive me for being sensitive), I do think that we must do something to reduce the barriers to homeownership in Detroit. Currently, less than half of our residents own their homes. The current national rate is somewhere around 70%. Michigan is one of only 11 states to have actually seen a decline in homewonership since 1970. A friend of mine, who is currently a renter, wants to purchase a home in Detroit, but is having serious second thoughts as a result of the high cost of property taxes.

I think that there is a concensus that homeownership is, overall, a positive thing for a city. While there clearly must be rental units to keep everyone's options open, we must do something to at least make homeownership an economically viable option if that is what a person feels is right for them. We can do that by reducing property rates for people to buy a home to live in. (I am not a big fan of the "slum lords" who own Detroit homes, and live in the suburbs).

I also applaud you on coming to terms with the fact that it is better to have some income from property taxes than having vacant land. As noted before, we are a city built to sustain over 1.5 million people, and we currently have 900,000 people sustaining it. I'm sure there is sufficient vacant land to redevelop without gentrification and the re-location of the poor.

I think this has been a very positive thread, and has certainly helped me to refine my position on NEZs.
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Eastsidedog
Member
Username: Eastsidedog

Post Number: 242
Registered: 03-2006
Posted From: 12.47.224.7
Posted on Tuesday, April 18, 2006 - 2:33 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Ron, I agree it has been a good thread and made me really think deeply about where I stand on NEZs. When I first heard of them years ago they seemed like a good idea but my opinion of them slowly changed. Now I have a new perspective. Now, if only I was a powerful politician with a powerful pen and not just a working guy like everyone else...


quote:

think that there is a concensus that homeownership is, overall, a positive thing for a city. While there clearly must be rental units to keep everyone's options open, we must do something to at least make homeownership an economically viable option if that is what a person feels is right for them.



Ron, it doesn't matter if they want to be a homeowner or feel "it is right for them." All that matters is that they should have the cold hard cash and finances in order before they go into longterm mortgage debt. Getting people into homeownership just because they want to own home is a disaster waiting to happen (see all the foreclosures). Sometimes you just don't get everything you want in life.

On the other hand, it seems that there are definitely financially sound ways increase homeownership for the benefits of the general populace.

Your plan in a nutshell:

quote:

I propose that we offer a property tax incentive for those residents, and prospective residents, who purchase a home within the city, provided that they actually live in those homes for a period of years. Part and parcel of this tax break would be a gradual decrease in the base tax rate for all property owners in the city as the population of the city increases.



This is a very good plan and would really help existing neighborhoods provided the gradual decrease is included. The problem with all the tax breaks now is that the taxes theoretically (see Victoria Park) pop up to the regular sky-high levels once the tax break period is up. NEZs aren't solving the underlying problem of very high property taxes in the city.

And yes, I agree now that filling vacant land with folks paying 50%ish property taxes is good for the city, but it's still pissing off residents who bought existing homes/condos and are paying the full tax rate just because their house is not part of new or massively rehabbed development with a fancy name and marketing budget (NOTE: I know these names work but it's really all crap, hey I work in advertising/marketing what can I say).

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