Assessed value of industrial property in Detroit rises 64%
- – Detroit’s assessed value of industrial property increased 64 percent from 2017
- – Reassessment in 2016 “significantly undervalued” industrial parcels
- – For first time in 17 years, residential assessments rose citywide
The assessed value of industrial property in Detroit rose sharply by more than 64 percent for this year after city officials concluded they undervalued the land during a post-bankruptcy citywide reassessment of all types of property.
City assessors increased the citywide value of industrial properties in Detroit from $314 million in 2017 to $513 million this year, according to data released Monday.
The $513 million citywide assessment of Detroit’s industrial land is about 9 percent higher than the 2016 assessment that industrial properties were worth a collective $470 million — and that’s with 1,500 fewer parcels that have been converted to commercial use.
In 2016, during the citywide reassessment of industrial, commercial and residential properties, city assessors decided not to include abandoned “shells” of industrial buildings in assessed values because they were unlikely to ever be used again, said Alvin Horhn, Detroit’s chief assessor.
“As we started reviewing the value of the land, we realized we had significantly undervalued industrial land in the city of Detroit — by a large percentage,” Horhn said Monday.
Horhn and the city’s chief financial officer, John Hill, discussed the 2018 property value assessments in a roundtable discussion with reporters on Monday.
The assessed values of commercial property in Detroit rose from $2.7 billion to $2.93 billion this year, according to the assessor’s office.
This year marks the first time in 17 years that Detroit’s assessed residential property values have risen after a decade-long plunge of $6 billion in assessed value that was driven by the city’s mortgage and tax foreclosure crisis, Hill said.
Detroit’s 263,000 residential properties assessed at a citywide value of $3 billion, up from $2.8 billion last year. In 2008, the city’s housing stock was valued at $8.8 billion in assessed value.
“We do believe we’ve hit bottom, and we’re now on the way up,” Hill said.
About 60 percent of residential assessments rose by less than 10 percent, according to the assessor’s office.
The increased assessments is largely driven by more market-rate sales of homes in the city as banks have started lending to buyers again, Hill said.
“We have information we can use to really value our properties better,” he said.
Under state law, the taxable value of residential properties cannot increase more than 1.02 percent or roughly $66 more per year in property taxes for a home valued at $100,000, Horhn said.
The cap on increased taxable value is removed when a residential property is sold.
Posted By: Crain’s Detroit Business on February 5, 2018. For more information, please click here to read the source article.
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