Regrid is a leading provider of land parcel data covering 99% of the United States population and more than 154 million parcels. For more on licensing our parcel data visit the Regrid website.
Founded in Detroit in 2009 and now serving national parcel data to clients across the country, Regrid has long been invested in issues related to property taxes and tax foreclosure prevention in the city. We developed the Detroit Assessment Gauge for two reasons:
Most Detroiters are familiar with the issue of overassessed home values and the resulting high property tax bills that plagued the city in the 2010’s. At this point, the widely cited figure of $600M in overtaxation from 2010 - 2016 is well known. But there has not been an easy way for Detroiters to understand if they should be worried about their home’s assessed value today.
At Regrid, we’ve used 2022 assessment data from the City of Detroit’s Office of the Assessor as well as our own land parcel data to evaluate privately owned single family homes in Detroit (about 70% of the city’s housing units) for one potential indication of overassessment: Inconsistent Assessments.
It’s best to explain Inconsistent Assessments with an example:
Illustration credit: Betsy Cooper
In the image above, you can see two brick homes on either side of the image, outlined in white. This illustration represents an actual set of homes on the west side of Detroit, north of I-96, but we are using an illustration to preserve the anonymity of the residents. Both highlighted homes have brick façades, about 900 square feet of living area, and sit on 1/10th-acre lots. At least from exterior imagery, they appear to be in similar condition. Neither home has sold in recent years. And yet there is one big difference between them: their assessments.
The home on the left has an assessed value per square foot (AV/Sq Ft) of $5.68, while the home on the right’s AV/Sq Ft is $13.73 – more than double that of its nearly identical neighbor. In other words, for every square foot of living space for the house on the right, the assessed value is more than 2x higher than the house on the left.
Within the census tract these homes sit in, the mean AV/Sq Ft for single family homes is $7.97. That means the home on the right has an AV/Sq Ft 70% higher than the census tract average, while the home on the left’s is 29% lower.
These are Inconsistent Assessments.
The Detroit Assessment Gauge, from Regrid, is a simple way for the owner of a single-family home in Detroit to check for evidence of one important possible indication of overassessment: Inconsistent assessment.
You can search for your address in the map above to find your home and see how its Assessed Value per Square Foot (AV/Sq Ft) compares to that of other single-family homes in the same census tract of comparable lot size. Simply search for an address, then click on your property and look at its Assessment Gauge Score1. The score denotes the % amount the home is above, below, or in-line with the census tract average AV/Sq Ft. Homes with Assessment Gauge Scores greater than zero could be overassessed. The higher the Assessment Gauge Score, the more likely that overassessment could be an issue for the property.
Example of Assessment Gauge Score in the Detroit Assessment Gauge:
Assessment Gauge Scores show the variation from the census tract average Assessed Value per Square Foot in percent ranges allowing for "heat map" color coding. A home that falls in the +25% to +50% Assessment Gauge Score range, for instance, is color-coded in a deep red. The deeper red a property is color-coded, the higher its Assessment Gauge Score and the more likely overassessment could be an issue. The deeper green a property appears on the map, the lower its Assessment Gauge Score, indicating overassessment is less likely an issue:
Assessment Gauge Score Ranges:
Regrid makes no guarantee that the Detroit Assessment Gauge will produce a successful assessment appeal, and we strongly recommend that homeowners seek assistance from housing counselors such as those at the Detroit Property Tax Appeal Project if you want to appeal your assessment.
If your housing counselor wants to use data within the Detroit Assessment Gauge to support your appeal, you can search for your home, click on the property, and then click the “Print Home Data” button. That will bring up a PDF with your home’s data, which you can save, or print, to include in your assessment appeal. You can also search surrounding homes and repeat the steps above in order to find comparable homes to yours with different assessments.
How to Print or Save a Home's Assessment Gauge Data:
Also note that the assessment data used in the Detroit Assessment Gauge right now is from tax year 2022, and the window to appeal your 2022 property assessment has closed. That window will re-open in January of 2023, at which point we will update the data in the Detroit Assessment Gauge. You will want to use the 2023 assessment data to support your 2023 assessment appeal.
For the moment, you should use the Detroit Assessment Gauge to help determine if you might want to pursue an appeal in 2023. If you decide to pursue an appeal, you should plan to check back in on the Detroit Assessment Gauge at the beginning of 2023 when new assessment values are updated.
You can also enter your contact information on the Detroit Property Tax Appeal Project’s website to be contacted when the 2023 appeal window opens.
Finally, we want to reiterate that the Detroit Assessment Gauge is not the authoritative word on whether your home is overassessed or not, nor does it present all the factors which can contribute to overassessment: Your home could appear appropriately assessed in the Detroit Assessment Gauge, but if you also have major home repair needs, for instance, that could contribute to a form of overassessment the Detroit Assessment Gauge cannot detect. The condition of homes around yours, too, can inform your assessment – if your block has vacant, blighted, homes on it, that should be taken into consideration as well.
There is also a difference between inconsistent assessments and inequitable assessments. Inequity in assessments refers to the fact that lower valued homes are often assessed at higher effective rates than higher value homes. Inconsistent assessment and inequitable assessment are not mutually exclusive phenomenons -- both can be present for the same property. The Detroit Assessment Gauge does not look for inequity in assessments, however, instead focusing on whether there is inconsistency in assessments.
The reason for focusing on inconsistency in assessments is that it can provide a stronger basis for an assessment appeal. Inequity in assessments is certainly an issue, but when a property owner goes to appeal their home's assessment, it's best to show that a home is assessed differently relative to comparable homes. Arguing for a lower assessment because higher value homes in a different part of the city are assessed at lower effective rates may not be the most effective case to present.
We strongly encourage homeowners concerned about their assessments to work with housing counselors in pursuing an assessment appeal so that ALL factors that may contribute to overassessment are taken into account.
If your Assessment Gauge Score is high, the next thing you’ll want to know is whether you might also be overtaxed due to an inconsistent assessment. In other words, might your assessment be producing a higher tax bill than it should?
There is a difference between overassessment and overtaxation, and it is possible to have an assessment that is too high, but a tax bill that is not. The Detroit Assessment Gauge can help identify overtaxation that follows from an inconsistent assessment, too:
Once you’ve pulled up your property in the map, look for “Possible Tax Savings Per Year” in the right sidebar with the property’s details. The Possible Tax Savings Per Year shows how much the Detroit Assessment Gauge calculates your property tax bill would fall if your Assessed Value per Square Foot (AV/Sq Ft) were brought into line with your census tract’s average AV/Sq Ft for comparable homes2.
Possible Tax Savings Highlighted in Detroit Assessment Gauge:
If you see “N/A” next to your Possible Tax Savings Per Year, that means that when the Detroit Assessment Gauge recalculated your assessed value it did not fall below your taxable value, meaning that no property tax savings were realized. (Read on in the section titled “A Deeper Discussion of Overassessed vs. Overtaxed” for details on overassessment vs. overtaxation.)
A reminder here, however: Just because the Detroit Assessment Gauge did not identify property tax savings does not necessarily mean you are not overtaxed.
In addition to inconsistent assessments, there are other factors that can simultaneously contribute to overassessment – the Detroit Assessment Gauge is only looking for inconsistent assessment. Again, if your home is inconsistently assessed and also has major repair needs, those two factors together may lower your assessment more than either issue on its own. Sometimes there are errors in assessment data, too – maybe the assessor’s data shows you have a pool when you definitely don’t (more subtle errors than that are more likely, but you get the point). All those factors can contribute to overassessment leading to overtaxation.
A qualified housing counselor with experience appealing assessments will be able to help you identify all the evidence you need to produce to make the strongest appeal case possible.
To understand the distinction between overassessment and overtaxation, it’s important to understand how a property tax bill is calculated in Michigan. The two terms to know here are “assessed value” and “taxable value”.
Your home’s assessed value reflects your assessor’s understanding of the home’s current market value. Per Michigan’s state constitution, your assessment cannot exceed 50% of the home’s market value. However, your assessment can rise and fall from year to year as much as your assessor thinks is warranted based on market conditions so long as it doesn’t exceed 50% of market value. For example, if market conditions are robust and prices increase 25% in a year, you may see your assessment jump the following year, too.
Your taxable value, on the other hand, is the value on which your property tax bill is calculated – not your assessed value. The two are related, but different.
While assessed value can rise and fall with the market, taxable value can only rise at the lesser of 5% or the rate of inflation each year3. (Your taxable value can, however, fall more than that amount.) So even if market conditions produce a 25% jump in home values in a given year, your taxable value can only increase by the lesser of 5% or the rate of inflation, meaning increases in your property tax bill are limited to that rate of increase as well4. The exceptions to this rule are in cases of a property sale, or substantial rehab of a property. Both trigger an "uncapping" which allows the taxable value to jump up to meet the new assessed value.
Your property tax bill is calculated by multiplying the taxable value of your home by your city’s millage rate. In Detroit, the millage rate for an owner occupied home is around 70 mills, or $70 per $1,000 of taxable value. If you have a home with a taxable value of $20,000 then the equation to determine your property tax bill is:
(70 / 1000) x $20,000 = $1,400
When you appeal your assessment you are appealing your assessed value, not your taxable value. In order to reduce your property tax bill, then, your appeal needs to produce a new assessed value that is lower than your current taxable value. Assessed value cannot exceed taxable value, so an assessed value that is revised to an amount below your taxable value produces property tax savings.
Here are two hypothetical examples, one showing overassessment and overtaxation, one showing only overassessment:
Scenario 1: Overassessment & Overtaxation
A Detroit homeowner has an assessed value of $20,000 and a taxable value of $18,000. The Detroit Assessment Gauge shows an AV/Sq Ft for the home that is 25% higher than census tract average. The homeowner appeals their assessment by showing it should be 25% lower than it is, and their appeal is granted. Their new assessed value is $15,000 which also brings their taxable value down to $15,000 (since taxable value cannot exceed assessed value). Their property tax bill, which had been $1,400, is now $1,050 – a savings of $350 / year.
Scenario 2: Overassessment Only
A Detroit homeowner has an assessed value of $20,000 and a taxable value of $15,000. The Detroit Assessment Gauge shows an AV/Sq Ft for the home that is 10% higher than the census tract average. The homeowner appeals their assessment showing it should be 10% lower than it is, and their appeal is granted. Their new assessed value is $18,000, but their property tax bill remains the same, as their new assessed value is not lower than their taxable value of $15,000.
Is it a waste of time for the homeowner in Scenario 2 to have appealed their assessment? No, definitely not. It is absolutely in a homeowner’s interest to keep their assessed value accurate. If market conditions change, it can make it easier to produce a revised assessment that does produce property tax savings in the future.
One of the most striking things the Detroit Assessment Gauge helped us observe was the difference in frequency of possible overassessment for homeowners vs. landlord-owned homes. In short, the more the Detroit Assessment Gauge suggests a home may be overassessed, the more likely it is that home is a homeowner’s. Conversely, the more “underassessed” a home appears to be, the more likely it is owned by a landlord.
Within our analytical universe of ~167,000 single-family homes 51% of properties had a 0 Principal Residence Exemption (PRE). These are likely landlord or investor owned rental properties. 49% had a PRE of 100, denoting likely owner-occupied homes5. This is close to the citywide divide between renter vs. homeowner properties, which is around 52% renter vs. 48% homeowner, per 2020 5-year ACS data.
In the chart below, we break down Assessed Value Variation Ranges into batches. For instance, the “-50% to -25%” Assessed Value Variation Range contains all properties citywide whose AV/Sq Ft is -50% to -25% of their census tract's average AV/Sq Ft. Batches are then subdivided into the percentage & number of 0 PRE homes (landlord-owned homes) comprising the batch and the percentage & number of 100 PRE homes (owner-occupied homes) comprising the batch.
Batches where the share of landlord-owned vs. owner occupied homes differ from the 51% vs. 49% split (respectively) in our universe of properties are instances where one or the other form of ownership is disproportionately represented.
It is more likely to find homeowners within the more-likely-overassessed ranges, and more likely to find landlords in the more-likely-underassessed ranges. There are a combination of factors that likely inform the disproportionate potential overassessment of homeowners and underassessment of landlord owned homes:
Perhaps counterintuitively, it is homes with the lowest Assessed Value Variation Scores (those where the Assessed Value / Sq Ft is farthest below census tract average) that are most frequently behind on property taxes, per property tax delinquency data from the Wayne County Treasurer's office as of September 2022. The table below shows the number of homes likely owned by landlords (0 Principal Residence Exemption) vs. homeowners (100 PRE) by Assessed Value Variation Score ranges, and the percent of homes within each range that are behind on property taxes, differentiated by ownership:
| Assessed Value / Sq Ft Variation from Census Tract Avg. Ranges |
Total 0 PRE Homes (Landlord Owned) |
Total 100 PRE (Homeowners) | % Total 0 PRE in Range Behind on Taxes | % of Total 100 PRE that are Behind on Taxes | Homeowner Delinquency Differential |
| Less than -50% | 2,409 | 1,078 | 43.6% | 36.1% | -7.5% |
| -50% to -25% | 8,901 | 6,147 | 40.1% | 37.0% | -3.1% |
| -25% to -10% | 16,647 | 13,366 | 35.6% | 31.9% | -3.6% |
| -10% to -2.5% | 12,643 | 12,313 | 33.0% | 26.6% | -6.4% |
| -2.5% to 2.5% | 9,877 | 10,075 | 31.3% | 25.3% | -6.0% |
| 2.5% to 10% | 13,238 | 14,428 | 31.3% | 24.9% | -6.4% |
| 10% to 25% | 15,040 | 17,399 | 30.5% | 23.3% | -7.2% |
| 25% to 50% | 4,928 | 6,539 | 30.7% | 22.6% | -8.0% |
| More than 50% | 811 | 1,240 | 32.3% | 18.4% | -13.9% |
While homes with lower Assessed Value Variation Scores generally benefit from lower assessments overall, there are nuances in Detroit's real estate market that likely account for higher rates of delinquency alongside lower tax bills.
On the homeowner side, it is likely that lower valued homes are more frequently the properties where the city's ~35,000 homeowners in poverty live. For these homeowners, lower assessments may not significantly increase their ability to pay. Instead, this is the population in need of the City of Detroit's Homeowner's Property Tax Exemption (HOPE) which eliminates 100% of the current year tax bill for homeowners making less than ~125% of federal poverty level. HOPE not only eliminates the current year's tax bill, it also automatically qualifies and enrolls homeowners with property tax debt into both Pay As You Stay and the Detroit Tax Relief Fund which, combined, eliminate the homeowner's property tax debt as well.
Amongst likely landlord-owned homes, tax delinquency rates are higher than those amongst owner-occupants across every range of Assessed Value Variation Scores. Like homeowners, delinquency rates are highest at the lowest end of Assessed Value Variation Scores, but for a different reason: It is amongst the lowest valued homes that landlords in Detroit most frequently participate in the practice of "milking" property. Milking consists of extracting as much rent as possible from tenants while putting as little back into a home as possible, whether for home repairs, maintenance, or property taxes. These properties often cycle repeatedly through tax foreclosure auctions as landlords extract rent for three years while not paying taxes, then walking away from the home and leaving the tenant to face the risks of a tax auction.
It is worth noting across these two citywide findings related to inconsistent assessments that, across every Assessed Value Variation Range, homeowners are less frequently tax delinquent than landlords despite disproportionately bearing the brunt of the higher end of inconsistent assessments.
"Everybody works but the vacant lot" via Wikimedia Commons
There is an active discussion in Detroit about how to more accurately assess property values and ensure homes are fairly taxed, but part of our problem may be an assessment system that is fundamentally flawed. Recent research suggests that Detroit should consider a move to a split tax system in which land is the primary factor driving assessments, not homes and other structures.
A report published in April 2022 by the Lincoln Institute of Land Policy noted that amongst single-family homes in Detroit, 95% of assessed value comes from improvements on those properties (the homes themselves) and just 5% from the land a home sits on. Assessments work this way across much of the United States – it is largely the value of your home that informs your assessment, not the land.
If we taxed land five times more than we taxed structures, according the Lincoln Institute's study, residential property tax bills in Detroit would decline ~19%, yet property tax revenue for the City would remain the same. Home values would rise an estimated 11%, since residents could occupy the property while paying lower burdens for local services. In a split-rate tax system, lower valued homes in Detroit would not only see property tax reductions but also assessments with fewer inconsistencies due to the fact that structures on the property would inform a much smaller part of the overall assessment.
That is the secondary benefit to taxing land more and buildings less: more uniform assessments. In Michigan, home assessments are set by the sale value of other houses. “Mass appraisal” systems assume that housing structures are similar in quality, condition, and features, or they must be able to perfectly spot all these differences. Anybody who has looked for homes in Detroit knows you can’t judge a house’s value by its neighbor’s sale. It might be influenced by a structural defect, a missing appliance, or an unpaid lien. While exurban assessors can simply assume that one new tract house is much like another, Detroit assessors are asked to spot invisible differences between structures without inspecting or individually reviewing properties. The pursuit of uniformity is simply harder in Detroit. A local tax falling heavily on structure values will inherit the inaccuracies of valuing unlike structures.
But land is possible to assess consistently. The best guide to land’s value is the lot next door, even if the neighboring structure is totally different. Inconsistencies in land value are easier to prevent and they are easier to spot. If tax bills on housing were based more on land than structures, a greater share of the tax bill would be based on an asset with predictable value.
Further, weighting assessments so heavily on a property’s improvements (structures) creates a distorted incentive system in which a homeowner is, in effect, penalized with a higher tax bill for putting their property to good use. Meanwhile an out-of-town speculator who owns a neglected and abandoned home across the street benefits from a lower property tax bill due to their lower level of improvements on the property.
For a speculator hoarding vacant lots (properties with no structures) the benefit of that land lying unused is even greater. Across Detroit, 15,000 vacant residential lots are owned by someone who does not live in Detroit. The median cost for these lots is just $20 / year in property taxes, meaning owners can hold property indefinitely and then reap enormous financial benefits when someone wants to buy the property for a productive purpose.
In 2021, the New York Times Editorial Board said this about national issues related to property assessments:
“Americans expect to pay property taxes at the same rates as their neighbors. But across most of the United States, flat-rate property taxation is a sham. Local governments are failing at the basic task of accurately assessing property values.”
The issues identified in the Detroit Assessment Gauge, and the opportunity to transparently give property owners a tool to help understand their own assessment situation, are far from isolated to Detroit. Across the country studies have revealed evidence of inequitable property assessments. Inequity in assessment refers to the fact that lower value homes are often assessed at a higher value relative to their sale price than higher value homes. Detroit has been one case study in this. While inequitable assessments are different from inconsistent assessments, it is likely that where you find evidence of one, you'll find evidence of the other.
Not all states have property tax & assessment systems compatible with the approach presented in the Assessment Gauge, here, but many do. If you're interested in seeing the Assessment Gauge brought to your community, please let us know here.
As we’ve said, the Detroit Assessment Gauge is not intended as an all-encompassing forensic evaluation of every potential cause of overassessment. Many factors can simultaneously contribute to overassessment and some of those are extremely difficult to observe through third-party data. Instead, the Detroit Assessment Gauge is an easy way to look for one possible, and fairly common, factor that can contribute to overassessment: inconsistent assessment.
The Detroit Assessment Gauge was developed by isolating privately owned single-family homes in 2022 City of Detroit assessment data from the Office of the Assessor. Homes were then separated by lot size. Assessed Value per Square Foot (AV/Sq Ft) values were calculated separately for homes with lots more than 25% larger than census tract average in order to prevent larger lots (which tend to also contain larger, higher value, homes in Detroit) from pulling up the mean AV/Sq Ft values for lower value homes in the city.
Mean AV/Sq Ft were then calculated by census tract, and by lot size. Census tracts were used as the boundaries by which to calculate AV/Sq Ft because they tend to contain fairly consistent types of homes. They are also geographically smaller than either neighborhood boundaries or “Economic Condition Factors,” which are the zones used by the Detroit Office of the Assessor to determine assessed values. Then, each individual home’s AV/Sq Ft was produced as well as its % differential from the census tract average.
Within each census tract, the average AV/Sq Ft was reduced by the median amount that homes with an AV/Sq Ft higher than census tract average were above that census tract average AV/Sq Ft. This was done to account for the fact that, within a given tax year, overassessed homes can be reassessed down in value, but “underasssessed” homes will not be reassessed up. Thus, the possible overassessments present in a census tract will distort the average AV/Sq Ft, causing it to be higher than it should be were overassessed homes assessed at rates more in line with their neighbors.
Finally, we calculated a rough approximation of how much property tax bills might decline for homes with AV/Sq Ft higher than the adjusted census tract average AV/Sq Ft: In instances where a home’s AV/Sq Ft was higher than the adjusted average AV/Sq Ft, we correspondingly reduced the home’s assessed value to the census tract average AV/Sq Ft and multiplied that by the home’s square footage. If that new assessed value fell below the home’s current taxable value, then we multiplied the difference between the new assessed value and current taxable value by the millage rate for the home (we did this using PRE data for homeowner, 70 mills, vs. non-homeowner properties, 88 mills, but did not account for exemptions like NEZ’s or poverty exemptions), which produced the approximate tax savings / year.
Again, this represents only one potential form of overassessment. Others may be simultaneously present in a home and may be collectively contributing to overassessment more than any one factor on its own.
There are benefits to the approach used in the development of the Detroit Assessment Gauge. For one, this approach is easily reproducible across the state and country (in states where the approach is compatible with the local property tax regime) with fairly limited data. However there are also limitations:
Footnotes
1: If your home does not appear in the map above, it may not have been included in our analysis. In order to make sure the Detroit Assessment Gauge is making as close to apples-to-apples comparisons as possible, we’ve limited this initial analysis to single family homes. Other housing styles such as condos, duplex homes, etc are not included in the gauge above.
2: We have adjusted census tract average assessed values per square foot to account for the potential overassessment levels in each census tract. Each census tract’s average AV / Sq Ft has been reduced by a percentage equivalent to the average amount that potentially overassessed homes within the census tract are overassessed. If this were not done, the average AV / Sq Ft for census tracts would be higher than they should be, as overassessed homes should be revised down, but “underassessed” properties are not revised up within a tax year.
3: This limitation on the growth in taxable value is a result Proposal A approved by Michigan voters in 1994. Prop A, as it is commonly known, limited the year over year rise in the taxable value individual parcels of property to the lesser of 5% or the rate of inflation. Only when a property sells or is substantially renovated is the taxable value "uncapped" at which point the taxable value will jump up to equal the assessed value of the property.
4: See footnote 3 for exceptions to this rule.
5. Not all 0 PRE homes are necessarily landlord owned, though the vast majority likely are. There are certainly cases in Detroit of homeowners who should have a 100 PRE but don’t, and other cases like scam land contracts or rent-to-own properties where PRE = 0 but the home is not necessarily landlord owned. On the homeowner side, there are a small handful of <100 PRE homes in our analysis (which can reflect things like a duplex), but as we tried to limit our property universe to single family homes almost all homeowners have a PRE = 100.
6: Lincoln Institute of Land Policy, Split-Rate Property Taxation in Detroit, April 2022, page 11
7: Lincoln Institute of Land Policy, Split-Rate Property Taxation in Detroit, April 2022, page 20