A new tool can help Detroiters understand their home’s assessment and offers a glimpse into how their property compares to those around them.
The Detroit Assessment Gauge, by the parcel data company Regrid, was created so Detroiters can learn if their home might be overassessed and have information at their fingertips when challenging their property’s assessed value during next year’s appeal window. The tool, released Wednesday, also found disproportionately higher assessments for homeowners compared to lower assessments for landlords — an indication that landlords might be appealing more aggressively.
It’s like taking a temperature check on a home, said Alex Alsup, vice president of research and development at Regrid.
“They can easily look at data that will give them a sense of how consistent their assessed value is, with those of their neighbors and homes around them,” Alsup said.
Overassessments are a contentious issue in the city. A Detroit News investigation found that between 2010 and 2016, the city overtaxed homeowners by at least $600 million. More than 92% — of the 173,000 Detroit homes reviewed — were found to be overtaxed by an average of $3,800.
The city assesses properties every year. Those assessments are a factor in determining property taxes. Michigan law prohibits municipalities from assessing any property at more than 50% of its market value.
The Detroit Assessment Gauge includes single-family homes — about 75% of the city’s housing units — using 2022 tax data. The tool sheds light on the inconsistency of assessments in a given area. That may be one indication of overassessment. It does not take into account repairs needed at a home, which can inform an assessment as well.
Here’s how it works: plugging in an address on the map shows an “assessed value per square foot” and how that compares to other single-family homes in the same census tract. An “assessment gauge score” shows whether the home is above, below, or in-line with the average square foot in that census tract, according to Regrid. The higher the score — or the more red — the more likely a property may be overassessed. A deeper green means that overassessment is less likely at play.
The tool can help people determine if they want to appeal their property assessment next year.
“It’s a very straightforward way for people to visually look at how their property is evaluated and compare it to their neighbors. It’s one more quiver in the arrow. So, it’s one more piece of information that can help people make an informed decision,” said Alvin Horhn, the City of Detroit’s deputy chief financial officer and assessor.
Taxpayers typically get assessment notices at the beginning of the year which tells them how much their property is worth, or its market value, and how much of that is taxable. It is not a tax bill. Residents can then challenge their property assessment, a process that involves gathering information — comparable properties, the condition of a home and neighborhood as well as repair estimates. The 2022 window to appeal is now closed.
“For most of us, our home is the biggest investment we will ever make in our life and how it’s taxed goes a long way to our ability to maintain ownership. So, people need to understand the process,” Horhn said.
Housing advocates have said that it can be difficult for homeowners to put together everything they need for their appeal because of the short time frame, a lack of information about the process and the cost of hiring an attorney.
Last year, the average Detroit home value went up 31% continuing a five-year growth trend, city officials said in January, but property taxes were expected to go up 3% because, under state law, property taxes are capped at the rate of inflation as long as you stay in the home.
The Detroit Assessment Gauge also highlights “possible tax savings per year,” if a property owner appeals their assessment. Even if the tool doesn’t identify any property tax savings, that doesn’t mean that a person may not be overtaxed since there are other factors to consider when it comes to overassessment, like major repair needs or errors in assessment data.
Alsup said there is a distinction between overtaxation and overassessment. Essentially, it rests on a home’s assessed and taxable value. Dark red in the map doesn’t necessarily mean a home is overtaxed.
“If you’re overassessed, you should appeal your assessment, whether it’s going to produce property tax savings for you or not. It’s important to have an accurate assessment,” he said. “But to produce property tax savings, when you appeal your assessment, your new assessed value needs to fall below your current taxable value, because it’s the taxable value on which taxes are calculated, and that taxable value needs to come down in order to produce property tax savings.”
The tool doesn’t look at inequities in assessments, meaning if lower valued homes are assessed at higher rates compared to higher valued homes. Rather, it looks at inconsistencies.
“As a Detroit homeowner, should I be worried about my assessment, if so, what do I do? That’s where you really want to be looking at comparable homes,” Alsup said.
City officials have maintained that “systemic overassessment” is not happening in Detroit. Last week, Detroit’s Office of the Chief Financial Officer said that, with more than 400,000 parcels, there will be cases of overassessment but that’s where the appeals process comes in.
The Detroit Assessment Gauge also found that if a home might be overassessed it’s more likely that it’s a homeowner. If a property is underassessed, it tends to be owned by a landlord. In the case of properties sold at the county’s tax foreclosure auction, that may be because of the low prices at which those properties sold.
“I don’t think it’s a reflection of assessments themselves favoring landlords, it is a reflection of landlords much more aggressively (appealing) their assessments,” Alsup said.