This story was co-published with the Detroit Free Press.
This year saw an almost 20% increase in the number of claims filed to have Detroit property tax assessments reconsidered over the last year. Owners of nearly 2,000 parcels across the city believe they were overassessed and filed paperwork with the city assessor, in an effort to reduce their property tax bills and even avoid tax foreclosure.
City tax assessments, a measure of how much a property is worth, were sent to property owners in early February. Property owners then had a three-week period to contest these assessments through the assessor.
Detroit homeowners have historically been victimized by overtaxation — between 2010 and 2016, homeowners were overtaxed by at least $600 million.
This year, appeals for 1,987 parcels were filed, an 18% increase from the number of appeals filed in 2022 according to Horhn. Almost all the owners who appealed, 1,741, had their assessments reduced, Detroit’s Assessor and Deputy Chief Financial Officer Alvin Horhn told Outlier Media.
There are nearly 400,000 property parcels in the city.
To make an appeal, property owners must make a case for why the city’s assessment is too high. Successful challengers are able to show the assessment isn’t in line with surrounding property values or there are facts about the property that are wrong, like how many bedrooms it has or what kind of condition it is in.
Property owners who filed appeals through the assessors review but were rejected or think they deserve a further reduction in their assessment can appeal at the March Board of Review, which begins March 7.
The majority of appeals filed, 1,467, were for residential properties, Horhn said. The office also saw an increase in appeals from investors who own multiple properties which he said is the first increase in appeals by investors since 2017.
Horhn could not provide how much claimants received in reductions, on average, this year, until his office completes all of the appeals.
Of the hundreds of Detroiters who appealed, 168 did so with the help of the Property Tax Appeals Project (PTAP), a free service run by the nonprofit Street Democracy program. Marie Sheehan, director of PTAP, said that while assessments are getting increasingly more accurate, approximately 12% of properties across the city were illegally overassessed last year. She expects the number to be similar this year.
“The lowest-valued homes are the most overassessed and the highest-valued homes are most underassessed,” Sheehan said. “The problem is not just the illegal overtaxation, it’s also the inequitable taxation.”
Street Democracy is one of 17 organizations in the Coalition for Property Tax Justice, a collective of groups working to end illegal overassessments. The group argues that Detroit systematically assesses low-value homes above the state limit which leads to homeowners falling into delinquency, thereby displacing Detroiters and threatening families’ generational wealth.
Property taxes have risen in Detroit over the last six years as home values have increased. In 2022, neighborhoods across the city saw home values increase by 20%, on average. Homeowners are protected against dramatic property tax increases even when property values go up. State law caps annual increases at 5% or the consumer price index, whichever is lower.
“It’s important that the conversation around assessments isn’t just about appealing, but also about reforming how the city is doing assessing and whose burden is it to get the assessment right in the first place,” Sheehan said. “When we over rely on the appeal system, the burden is on the taxpayer to really scrutinize their tax bill and make sure it’s correct. And the burden should always be on the city to get it right in the first instance.”
In January, Mayor Mike Duggan voiced his support for property tax reform in the city, including a proposed split-rate tax system that involves higher tax rates for vacant land and lower rates for structures — offering a reprieve for homeowners and incentivizing development. In a report, city officials said the new tax system could benefit residential properties and discourage speculators from holding empty lots.
Until tangible reform is in motion, advocates are continuing a call for better systems in place to protect homeowners. The Coalition for Property Tax Justice is hosting a town hall meeting on property tax reform and transforming the assessment system on Saturday at 10 a.m. at the Muslim Center at 1605 Davison Fwy. Local elected leaders are expected to attend, including state Sen. Stephanie Chang, state Rep. Abraham Aiyash and Detroit City Council President Mary Sheffield.
For those who completed the Board of Assessors Review and wish to appeal at the March Board of Review, it is scheduled to begin March 7 at 9 a.m. You can schedule your hearing here.
Correction: An earlier version said 12% of Property Tax Appeals Project (PTAP)’s clients were illegally overassessed in 2022. Data from PTAP shows that 12% of all Detroit homeowners were illegally overassessed.