Detroit illegally inflated taxes on lowest value homes, study suggests

Detroit activists are calling for action after a recent study suggested the city is cheating lower-income residents by illegally and disproportionately overtaxing homes worth less than $35,000.

By contrast, owners of the highest value homes in Detroit are far less likely to be overtaxed, according to the study by the University of Chicago’s Harris School of Public Policy.

The study found that Detroit overassessed the value of 72% of the homes worth less than $34,700. A vast majority of the homes worth more than $35,000 were not overassessed, according to the study.

“We find evidence of systematic regressivity: high-priced homes are more likely to be underassessed and low-priced properties are more likely to be overassessed,” the study states.

In a statement to Metro Times, Detroit Assessor Alvin Horhn dismissed the claims in the study as “utter nonsense” and “politically driven,” saying that “any claim that homes today are systemically overassessed is just false.”

Horhn said the methods used by the University of Chicago “violate Michigan tax law and the practices that every assessor in Michigan is legally required to follow.”

On Monday, activists for the Coalition for Property Tax Justice, a group that advocates for homeowners in Detroit, called on the Detroit City Council to address the overassessments by sending the findings to the Board of Review for inspection.

The council approved a new property tax ordinance, supported by the coalition, in November 2023 that allows council members to send the data to the Board of Review. In the past, that process had to be initiated by individual homeowners.

The council will consider the proposal Tuesday, and dozens of residents are expected to speak in support of the measure.

Activists are also urging Mayor Mike Duggan’s administration to reduce assessments by 30% for all houses valued below $35,000.

Calling the latest findings “shocking,” Bernadette Atuahene, a property law scholar who has studied Detroit’s property tax foreclosure crisis, pledged to help residents end the overassessments.

“We now have evidence that the lower value homes continue to be systemically overassessed, and we are here to put a stop to it,” Atuahene said at a news conference on Monday afternoon.

She added, “We have tens of thousands of homes that are still being overassessed. We need systemic change.”

Atuahene was among numerous activists who previously called on the city to correct inflated property value assessments that began more than a decade ago. Between 2010 and 2016, the city of Detroit overtaxed homeowners by at least $600 million.

The Michigan Constitution prohibits property from being assessed at more than 50% of its market value. Between 2010 and 2016, the city assessed properties at as much as 85% of their market value.

During the same period, roughly one quarter of the homes in Detroit were foreclosed due to delinquent property taxes, a rate not seen since the Great Depression.

Activists are worried about another wave of foreclosures based on inflated property taxes on the lower value houses, which tend to be owned by people struggling financially. To stem the tide, activists are calling on Wayne County Treasurer Eric Sabree to halt foreclosures of owner-occupied homes.

“It’s wrong for the county to foreclose on homes that the city has been illegally overtaxing,” AJ Braverman, chief of staff for the Coalition for Property Tax Justice, said.

Horhn countered that the city has fixed its assessments and stands by them.

“We spent millions modernizing the process and our new assessments have been reviewed and approved by the State Tax Commission,” Horhn said. “The Assessor’s office has added staff, new technology and has a robust property tax exemption program for low-income residents. The problems of a decade ago have been resolved. For any individual property owner who feels their proposed assessment may be incorrect, we encourage them to file an appeal.”

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