A Pro-Speculator Property Tax Policy from Some in Detroit City Council

Some in Detroit City Council are advocating a policy that would give more power to outside-the-city property speculators

2023 Concentrations of outside-Detroit ownership of Detroit property. Click to open map in fullscreen.

I was saving this for another research piece but it feels like I should share it now given the “eliminate all property taxes” movement from some in Detroit City Council.

This is a link to the heatmap above that I made using Regrid data in Felt. The map uses Regrid’s tax bill mailing address data to show concentrations of Detroit property owned outside Detroit in 2018 vs. 2023.

It may be surprising to see that outside-the-city ownership of Detroit property is basically flat over the last five years or so. More Detroit property -- and critically more occupied Detroit HOMES (both rental and owner occupied) -- are owned by Detroiters today than were 5 years ago.

If you wanted this phenomenon of growing Detroit resident control over Detroit property to stop dead in its tracks, you'd eliminate all property taxes and remove friction from speculation, ensuring that outsiders have an even larger and more permanent upper hand over Detroiters when it comes to Detroit property. This is precisely what some in City Council are proposing.

Hit play on the video below to see, for example, how concentrations of metro Detroit ownership of Detroit property has changed from 2018 to 2023. The thinning out of ownership in Southfield and along the whole Lodge corridor is apparent.

As I wrote the other day:

1. Speculating on land in Detroit is already nearly frictionless — eliminating property taxes would make it completely frictionless.

   One of the issues the land value tax proposal seeks to address is the low holding costs of disused land in Detroit. It’s really cheap to sit on property in Detroit, especially vacant land, because the property taxes are very low. If taxes go up on vacant land, it could stimulate owners to do something with that land. If taxes are eliminated, then there is nothing to keep speculators from sitting on that land indefinitely, always holding out for a bigger payday somewhere down the line and holding hostage the neighborhoods around them.

   I’ve seen some critics of the land value tax proposal say “The Detroit Land Bank is the biggest speculator in my neighborhood.” More sympathetic I could not be. But what is one of the superpowers of the Detroit Land Bank? They are a government entity exempt from taxes. They can afford to sit on land as long as they like. Eliminating property taxes gives speculators from Southfield to Miami the same superpower. At least the DLBA is on paper accountable to the public. Private speculators are not. So, if you really want to give a boost to speculators you’d eliminate property taxes.

There Are Already Good Tools for Homeowners Struggling with Property Taxes — Make them Even Stronger

If the concern is over homeowners, as has been suggested by those in City Council in favor of the eliminate-all-property-taxes idea, then do more to support property tax relief for homeowners with low incomes. I spent five years arguing with the City of Detroit for the elimination of both current property taxes and tax debt for Detroit homeowners — it’s absolutely worth continuing that fight.

There’s been a >350% increase in the number of 100% HOPE property tax exemptions granted to Detroit homeowners over the last six years and a 70% decrease in the number of homeowners with delinquent property taxes. Want to make that HOPE number higher? Make renewal of the HOPE automatic, make the application fit on a postcard. All kinds of options. But there’s no reason whatsoever to empower speculators while trying to help homeowners.