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This month Detroit homeowners can ask city to re-consider their property assessment

Homeowners have until Feb. 22 to request a second look
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Posted at 5:49 PM, Feb 05, 2021
and last updated 2021-02-05 20:01:33-05

DETROIT (WXYZ) — Detroit homeowners have until Feb. 22 to request that the city assessor takes a second look at their property appraisal.

Last month the City of Detroit sent out assessments to homeowners. The figures, which showed a cumulative 8% increase in property values in the city of Detroit, help to determine what a property owner owes on their property tax bills.

While increases in property values are typically celebrated, Detroit's history of overassessing properties — specifically lower-valued homes, which led to tax foreclosures — has some wanting a second look.

"It’s not that people don’t want to pay taxes," said Lauren Thomas a legal advocate with the Detroit Justice Center, who helps people file petitions for a re-assessment. "People don’t want to be overcharged."

According to research conducted by Chicago-Kent law professor Bernadette Atuahene, between 2009 and 2015 Detroit failed to accurately lower property values in the years following the Great Recession.

"in each of those seven years, anywhere between 55 and 85% of properties were being assessed in violation of the Michigan State Constitution," said Atuahene.

A subsequent Detroit News investigation calculated the excess. They found the city overtaxed homeowners by at least $600 million. And those that couldn’t pay, lost.

Over the last 20 years, at least 145,000 Detroit properties have been put up for sale in the auction, and, of that number, an estimated 50,000 properties were occupied at the time of foreclosure. A 2018 study out of the University of Chicago found that one in 10 Detroit tax foreclosures between 2011 and 2015 was caused by inflated property assessments.

"They were foreclosed on at rates we haven’t seen since the great depression, many for property taxes they weren’t supposed to be paying," said Atuahene.

While the city of Detroit completed a re-appraisal of every residential property in 2017 — following a state order to correct the problem — Atuahene and researchers out of the University of Chicago say problems remain.

"The good news is throughout the middle things got better, there were some significant improvements," said Atuahene. "The bad news is for the lowest valued homes things did not get better. The majority of low valued homes are still being overassessed."

The academic contends this issue comes from the fact that the city, when conducting assessments, brought down assessments as a whole and then worked with averages. This method, she said, just replicated the problem of over-assessments for the lowest valued homes.

"Anything above the average is going to be under-assessed and anything below the average is going to be over-assessed," she said, pointing out that a Feb. 2020 study out of the University of Chicago, which looked at property assessments from 2016-2018 reiterated these findings.

"Assessment regressivity—over-assessment of low-valued properties relative to high valued properties—has gotten worse," the paper states in its key findings, explaining that this is due to two interrelated issues: higher-priced homes saw a reduction in appraisal rates, even though, on average, they were not over-assessed before they were re-appraised, and lower-valued homes saw an increase in average assessment after the reappraisal.

"Following the reappraisal, the bottom three deciles (homes priced below $19,000) were still being over-assessed on average. Moreover, the bottom 10% of homes were, if anything, more over-assessed after the reappraisal than before," the paper stated.

For Thomas, who helps people make the case for a re-assessment, it is this continued disconnect that makes it so important for individuals to take advantage of the weeks in February when they can file a petition for a re-assessment.

"There was trust and that trust has been lost," said Thomas, explaining that even if an individual did continue to pay their property taxes when they were being over-assessed, and didn't lose it to tax foreclosure, other things were lost because of the screw-up.

"if you are paying a bill that’s too high you are sacrificing someplace else," she said, explaining that one component contributing to the disconnect is the fact that city appraisals are based on arms-length sales, in other words sales that involved a willing seller and a willing buyer.

"It skews the market quite a bit," she said, explaining that foreclosure sales are not included in the equation.

In addition to being known for low sale prices, the auction carries consequences like speculation, blight, and abandonment. Issues that bring down property values.

"It’s hard to say well, 'Your home is worth this amount based on the sales,'" she said, flicking at the damage caused by the auction in neighborhoods across Detroit.

It is for this reason, she encourages Detroiters petitioning for a second-look to bring up conditions like their block.

"If you’re in a blighted neighborhood they will take that into account, so you should put that: ‘Hey, you know, I’m the only house on the block.’" she said.

The city, for its part, maintains that its assessments right now are accurate. Still, it encouraged Detroiters to petition for a re-assessment if they have doubts.

"I think people are going to find this was done fairly but if it’s not, we’ll fix it," said Mayor Mike Duggan at a press conference Jan. 21.

In order to request a re-assessment, Detroit homeowners can send an email to AssessorReview@detroitmi.gov anytime by Feb. 22. They can also request an appeal in person, or via mail by sending a letter to the assessor's office — Suite 804 — of the Coleman A. Young Municipal Center (2 Woodward Avenue). For more information call: (313) 224-3035. Those who disagree with the new assessment can then petition the Property Assessment Board of Review in March and subsequently the Michigan Tax Tribunal. But in order to go before the Board of Review and Tax Tribunal, one must first send in a petition by Feb. 22.