DETROIT (WXYZ) — Detroit homeowners are facing a double-edged sword as property values in the Motor City have surged by $500 million in just one year, according to city officials. While the dramatic increase signals the city's continued recovery, it also means many residents will see higher property tax bills.
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The city examined thousands of home sales over two years to determine new property values, with some neighborhoods experiencing increases of 30% to 40%, according to city officials.
"They've been steadily going up since I moved over here," said Karen Schultz, a Detroit resident who lives in the Rosedale neighborhood.
Schultz purchased her home in 2015 for $137,000, and it's now valued at $280,000. She said she bought at the right time due to rising rental costs.
"For what I mortgaged, I am paying here - I was paying for a 1 bedroom apartment over at Riverplace," Schultz said.
On Friday, Detroit Mayor Mary Sheffield signed an executive order requiring the assessor's office to adopt national standards for greater transparency in the assessment process.
"While the assessed values of homes has increased. This year, homeowners are protected under the Michigan constitution from large tax increases," Sheffield said.
Many homeowners won't see dramatic tax increases because Michigan's Proposal A limits taxable-value increases to inflation, about 2.7% this year. However, that cap is lifted when a home is sold.
"I look at my tax bill, it was only a 38 dollar increase, so I feel good about that," said George Preston, a Detroit resident.
"This cap helps us alleviate some of those costs that Detroiters are paying currently," said Brodrick Woods, another Detroit resident.
The challenge now is ensuring longtime residents can stay in the neighborhoods they helped rebuild as property values continue to rise.
Homeowners can appeal their assessment by contacting the assessor's office at AsktheAssessor@detroitmi.gov.
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