Commercial property values rise 35 percent in Detroit over past year

Posted on January 23, 2019

Commercial property values in Detroit rose 35 percent between 2017 and 2018 after the city completed its first citywide reassessment of commercial buildings in decades, Mayor Mike Duggan said Tuesday.

The overall value of commercial property in Detroit rose $2.96 billion to more than $4.5 billion, according to data from the city assessor’s office.

Industrial property values made an 18 percent jump between 2017 and 2018, from $513 million to $629 million, according to the assessor’s office.

The rising value of retail and office building property in downtown, Midtown and along mainstay commercial corridors in Detroit’s neighborhoods came as residential property values rose an average of 12 percent across the city, according to the mayor’s office.

Overall, Detroit’s total property values rose 21 percent in 2018 to $10.2 billion, which is comparable to citywide assessments from 2011, according to the assessor’s office.

The increased property values reflects what city officials are hearing from real estate agents as the city attracts new businesses and residents, Duggan said.

“I always thought that we would see double-digit increases,” Duggan said Tuesday. “But it’s one thing to think it should be happening and it’s another thing when the assessor walks into your office and shows you the map that it’s happening all across the city.”

However, because of state constitutional caps on property tax growth, residential property tax bills will rise by an average of just 1.02 percent this year, Duggan’s office said.

The same constitutional limits on taxation apply to commercial and industrial property tax bills as well when they get mailed to property owners in July.

The cap on taxable value is lifted when a home or other property is sold.

Growth in residential property value — fueled by 11,000 transactions in 2017 and 2018 — represents a $400 million increase citywide and follows a modest 5 percent increase in residential values between 2016 and 2017, city data shows.

The growing property values in Detroit are partly a result of a four-year citywide reassessment following Detroit’s 2013-14 bankruptcy that dramatically lowered the taxable value of residential, commercial and industrial property in Detroit.

Chad Livengood, Crain’s Detroit Business.