Will Detroit's New City Dwellers Split When Property Tax Breaks Expire?
June 23rd, 2016, 5:49 AM
Detroit has a dilemma. The cash-strapped city needs all the money it can get its hands on. It also needs to keep luring and retaining new residence, who contribute to its tax base.
Mike Wilkinson of Bridge Magazine writes:
At a time when Mayor Mike Duggan and others are touting a nascent Motown revival, city officials acknowledge that state tax breaks that helped draw professionals to downtown and midtown could act as a repellant when they expire, in part because Detroit has one of the highest property tax millage rates in the state.
Wilkinson writes about Kevin Morin, who runs two tech companies out of an office in Corktown and opened and sold the Fountain Bistro, a restaurant in Campus Martius. He also owns a modern 1,000-square foot-condo that he bought in 2008 on the 24th floor of the Westin Book Cadillac.
But Morin said his love for this high-rise downtown condo is in jeopardy. The tax break that helped lure him to Detroit expires in seven years, threatening to turn his tiny tax bill – under $500 a year on a condo he bought for more than $300,000 – into a $12,000 millstone that he said could drag down his property value.
“I think it is too aggressive in that it is too low to begin with and so black and white at the end,” he said. Even though that’s seven years away, he’s already thinking of selling.
“If you start taxing them on what their (properties are) worth, they’re not going to stay,” Tim Hodge, who performed his doctoral study at Michigan State University on Detroit’s tax break programs, tells Bridge.