The good news of rising property values in Detroit comes with the reality of a tax increase for residents, which is why the city is urging those concerned about being overtaxed to protest their assessment before time runs out. 

Letters will start going out next week, informing most homeowners of the assessed value of their property rising faster than their taxes for the sixth straight year, Mayor Mike Duggan said Friday. City officials said Detroiters can take advantage of their right to appeal the proposed changes between Feb. 1 and Feb. 22. Property owners have a three-week window to question how their property is valued by visiting detroitmi.go/propertytaxappeal. Contact the assessor’s office for more information.

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“This is your opportunity to question and challenge how we valued your house,” said Deputy Chief Financial Officer Alvin Horhn. “We’re required, we’re obligated, to tell you how we came up with those numbers. If you disagree, it’s our job to go back, look again and see if we missed something.”

The notices going out are not tax bills, those are mailed each year at the end of June and November, and don’t reflect official assessment figures. Proposed assessments can be changed through the review process or by the Wayne County Assessment and Equalization Department. 

Residential property values in Detroit are projected to increase by an average of 20% over the last year, based on a city review of home sales data from the past two years. The increase is the lowest since 2019, when property values climbed by an average of 12% – but still represents a 45% jump in value in the last four years. 

“While we led the decline in the state a decade ago, the increases have been dramatic,” Duggan said at a Friday press conference. “We are building wealth, homeowner by homeowner, across this community.”

Increases in assessed value have a direct impact on property tax bills, but state law prevents annual increases from rising higher than 5%. Duggan emphasized that home values are rising faster than tax bills thanks to this legal protection. 

Seventeen neighborhoods will see their property value increase by more than 30%. Roughly half of the city’s neighborhoods (106) will see increases ranging between 20% and 29%, while a quarter (53 neighborhoods) will see increases between 10% and 19%.

Only six of 209 residential neighborhoods identified by the city are projected to lose value, with declines between 2% and 11%. Duggan declined to identify Friday which neighborhoods lost value, or whether those included the same five neighborhoods that lost value in 2022. The mayor said those details will be available next week.

“(Neighborhoods which have lost value) are just areas that are very sparsely populated, there’s more vacant land,” Duggan said. 

Those figures don’t include eight neighborhoods largely filled with condominiums. Horhn said condo neighborhoods weren’t included in Friday’s announcement because property values saw dramatic increases and would have thrown off the citywide averages.

“We thought it was more important to show the vast majority, which are single-family (or) two-family houses, what kind of value increases we’re seeing across the board,” Horhn said. 

Residents can use an online tool released last year by the parcel data company Regrid to see how their assessment compares to surrounding properties. The searchable map was meant to arm Detroiters with good information to appeal their assessment in 2023. 

A 2020 Detroit News investigation found the city had overtaxed homeowners by at least $600 million between 2010 and 2016. More than 92% of the 173,000 Detroit homes reviewed were found to be overtaxed by an average of $3,800. 

Asia Hamilton, whose family has owned a home in the Crary St. Mary’s neighborhood for 44 years, said there’s not an easy way for residents to know whether they should question their assessed value. Hamilton is on the hunt for a new home, and said she was surprised to see homes in the Woodbridge neighborhood that are worth more while having lower taxes. 

“I want (the mayor) to make sure that they assess all of the properties properly,” Hamilton said. “We are dealing so much with high car insurance and even if you get your house insured, it’s (expensive). To continue to tax people who are already having so many other issues is terrible.” 

Bernadette Atuahene, a property law scholar and certified assessor, argues Detroit’s lowest valued homes are more likely to be overassessed. In a presentation to the City Council last September, Atuahene clashed with Horhn over whether Detroit is still illegally overassessing property, resulting in inflated tax bills. Atuahene presented data suggesting 12% of properties were illegally overassessed. She could not be reached Friday. 

When asked to address claims that Detroit’s lowest-value homes are being widely overassessed, Duggan said “it’s just factually false.” Duggan, earlier in his Friday presentation, said “it’s possible” that some property owners are being overassessed, but the “vast majority” of assessments are accurate, he said. 

Horhn said Friday “there is no systemic problem,” but noted it’s not possible to say assessments are 100% accurate. That’s why it’s important for residents to appeal their proposed assessment changes if they feel something is off. Horhn said residents can visit the Office of the Assessor at 2 Woodward Ave. Ste. 804 to ask questions about the assessment process. 

“I can’t begin to emphasize how important it is that people open those assessment notices (and) take a look at the assessed value,” Horhn said. “If they agree with it that’s fine, but if they disagree, they have a three week window to object. By the time you get your tax bill, it is too late to object to how we valued your property.”

Duggan credited the gains in part to his administration’s efforts to revitalize neighborhoods. 

“We got rid of vacant houses. We built streetscapes. We got streetlights on, we got street sweeping and parks dramatically improved,” Duggan said. “There’s a whole lot of neighborhoods in this city, like Russell Woods and Grandmont Rosedale, who really resent the characterization of the neighborhoods as being rundown. I believe we have great neighborhoods that have come back dramatically. These are the facts.”

Gloria Goodwine, a Grandmont Rosedale resident, spoke highly during the news conference of Duggan’s work to demolish vacant houses and improve area streets. Melvyn Chuney, president of the Russell Woods Sullivan Area Association, said property values in his area have “grown exponentially.” 

“We have so many new businesses opening up, a Dexter streetscape project going on, we have a popup retail space opening next month, Zussman Park has been redone, homes are being built,” Chuney said. “You can’t find a home in Russell Woods to purchase because it’s so nice. The property values have gone up and the quality of life has been much, much better.”

Hamilton, who lives just north of Grandmont Rosedale, said the area has seen investment in parks, but street improvements haven’t reached her yet. She also said that crime in the neighborhood is hurting her quality of life. 

“There’s so much crime it’s ridiculous,” Hamilton said. “It’s a hard city to live in. It’s a mental toll that the city takes on you, and I’m struggling to get relief.” 

Property value increases also cause an increase in property taxes. State law prevents property taxes from increasing by more than 5%. Michigan law also prohibits municipalities from assessing any property at more than 50% of its market value. 

The mayor presented data showing the growth in assessed value of residential property far outpaced the taxable value over the five years. Assessed value increased by 148% while taxable value increased by 45%. 

“What we have in the city is a complete reversal of 10 years ago,” Duggan said. 

Duggan celebrated the change in property values compared to other Michigan cities. Detroit values rose 45% since 2019, growing faster than Grand Rapids (32%), Southfield (32%), Royal Oak (26%), Warren (23%), and Troy (22%). 

“It’s a good indicator for the city’s financial health,” said Esmat Ishag-Osman, a Detroit policy expert for the Citizens Research Council of Michigan. “I’m sure property tax advocates will have overtaxation on top of mind. Overall (the assessment increases) is a good thing, reflective of ongoing improvements we’ve seen in the neighborhoods.”