Proposal A to blame; many seek help from review boards
BY CECIL ANGEL • FREE PRESS STAFF WRITER • March 14, 2008
All across the tri-county area, there's a different kind of March madness going on that doesn't involve basketball.
Property owners such as 80-year-old Eloise Carswell of Southfield are dissatisfied with their annual property tax assessments and are flocking to their local review boards seeking reductions. A lower property assessment generally means lower taxes.
Carswell said it would be hard to sell her three-bedroom, 2,136-square-foot house with the kind of taxes she has to pay. "This is not pennies," she told the board of her $6,000 yearly tax bill.
With the state recession and rampant foreclosures, disgruntled property owners basically want to know one thing:
"How can my taxes be going up when my property value is going down?" said Westland City Assessor James H. Elrod.
The answer is in Proposal A, the state law passed in 1994 that limits the increase in property taxes to the rate of inflation. So while selling prices soared in the 1990s, taxable values rose much slower. But now the taxable values can continue rising with inflation -- between 2% and 3% -- even though assessed values are now falling.
In Wayne County, projected property assessments in 2008 have dropped about 5%, and in Macomb, they've dropped 7%. Oakland expects a drop of about 0.4%.
State law requires that tax review boards meet in March and field complaints. Property owners are especially frustrated in light of the state's economic recession and the foreclosure crisis that have caused the market value of homes to drop.
How it's all determined
What may seem straightforward to property owners is actually not so simple.
Cities and townships perform mass appraisals comparing sales of comparable homes in the same neighborhood. Elrod said that drops in property values can vary depending on the neighborhood.
In Westland, there was a 7% drop in property values overall. In some neighborhoods, assessed values went up, but in others, values decreased by as much as 22%, according to city records.
How does a homeowner know when to appeal the assessment? He or she should look at the taxable value for 2008 on the assessment notices, Wayne County Assessor Gary Evanko said.
"If twice that number is more than what you think you can sell your house for, go see the Board of Review," Evanko said.
In Oakland, '$80 is $80'
Oakland County may be one the richest county in the state but it, too, has seen property values decline.
Farmington Hills City Assessor Dean Babb said his office fielded about 50 calls from people complaining about their taxes going up, but their assessments going down.
"If people are coming to question that and want to know why, everyone's going to be sympathetic, but the board can't control the calculation of the taxable value. That's mandated in the law."
Still, Claudia and Bradley Trudeau went to Farmington Hill's City Hall on Wednesday with that common quandry:
While their appraised and taxable value of their two-bedroom, two-bath condominium on Orchard Lake Road fell, their property taxes increased.
Claudia, a 51-year-old occupational therapist, and her husband, a 62-year-old retired letter carrier, said it didn't add up.
They pointed out their neighbors were slashing prices of for-sale condos from about $200,000 to the mid- and low $160,000s.
And yet the Trudeaus' property taxes were going up about $80, they told the Board of Review. That might not seem like a big hike, Claudia Trudeau said. "But," she added, "$80 is $80."
Farmington Hills tax assessor Dean Babb explained there was nothing he could do. He already reduced the couple's assessed value to $97,740 down from $104,060 the year before, he said. And it was state law, not the city, that controlled the taxable value of the home, he said sympathetically. Assessments fell in Farmington Hills about 5.68%.
Board of Review Chairwoman Dorothy Jeffres added: "What he's saying is you have to pay your taxes. And we'll see you next year."
Sales help make case for change
There were hints something was wrong with Eileen McDonell's property tax assessment.
For one, her bank notified her in 2004 that her escrow account was short. But it wasn't until earlier this month when she was chatting about taxes with her daughter-in-law Brigid McDonell -- who also lives in a townhouse condominium on Ravencrest near Newburgh Road in Westland -- that it all came together.
"When it went up, I never even realized it," said Eileen McDonell, 90. "I didn't know what other people were paying."
Somehow, the tax cap on her home established under Proposal A had been lifted, and her taxes shot up, the women surmised. McDonell's combined summer and winter 2007 taxes were $3,564.81.
McDonell, a widow, purchased her 1,190-square-foot, two-bedroom townhouse with her daughter Patricia Evans in 1999 for $159,000.
Evans died in 2004, and her children inherited her share of the home. They signed a quitclaim deed making it seem as though Eileen McDonell had just bought the home.
"We believe that's what triggered it," said daughter-in-law Brigid McDonell, 66.
The drop in value is what led the women to Westland City Hall on Wednesday to explain how condo prices in their development had fallen, making a case for lower taxes.
Eileen McDonell mostly observed as her daughter-in-law peeled off copies of sales over the past year. She showed the Westland Board of Review printouts of a condo that sold for $174,900 in October 2006 and sold again for $152,900 on Feb. 1.
She later explained to the board her theory as to why her mother-in-law's assessment increased.
Board member Tracey Sabotchick said the board would not be making any decisions Wednesday because it investigates each case. Eileen McDonell can expect to hear from the board by June 1, she said.
Oakland increase tied to addition
When Jeff Fendelet and Heather Kaminski bought their home in Commerce Township in 2005, their taxes were about $1,900 a year. Now, they pay about $2,700 a year.
After their tax assessment this year showed their home's value at nearly $170,000 -- about $15,000 more than it was appraised for in 2005, when they purchased the home -- they decided to appeal.
The couple, who are engaged, explained to the board that they bought their home for $152,000, about $3,000 less than its market value. They said a real estate agent told them last month that the house couldn't fetch more than $160,000.
But their assessment shows the home valued at more than $175,000. The couple is being taxed on the home's assessed value -- which is actually $87,970, half of the property's estimated market value.
"Our house is not valued at that," Kaminski, 31, told the board.
The board said that a small addition the couple made to the house may have increased its worth. Board member Barbara McNutt explained that the assessment might seem high in a market where home values are declining because the assessments were based on home sales between Oct. 1, 2006, and Sept. 30, 2007.
The couple will have to wait a few weeks to find out what the board decides.
Fendelet and Kaminski said they disagree that the 10-by-10-foot addition raised their home's value so much. Now they say they may not build the addition above their garage as they had planned.
Taxed out of Michigan?
In Macomb County, a similar song is being sung.
Joshua Vance thought he'd take advantage of the housing crunch by buying a foreclosed home for $135,000 and fixing it up so he could raise his two young children in a nice neighborhood in Clinton Township.
Three years later, Vance is thinking of moving -- not just out of his 2,400-square-foot house, but out of Michigan.
His frustrations grew when he opened his tax bill to discover that the assessor pegged the value of his house at $260,000.
While the estimated value was about $10,000 less than it was last year, Vance said the township didn't reduce the value enough in response to the continuing decline of the state's economy. A licensed real estate agent, Vance estimates his house is worth no more than $220,000.
"It's extremely elevated," Vance told the Clinton Township Board of Review this week, in hopes of getting his taxes reduced. "I think it's optimistic, especially considering the current economic situation."
Now he has a tough decision to make -- stay or move.
"I want to stay loyal to my state, but I have a family to raise," Vance said.
Changing economic times
In good economic times, Theodore Whittlesey could better understand why an assessor would raise the value of his two New Baltimore industrial lots beyond what he paid for them in January.
But with all of the "For Sale" signs he sees throughout southeast Michigan, Whittlesey said property values estimated by municipalities should drop.
Whittlesey bought the two lots for about $330,000 apiece in hopes of finding a buyer. Then, he opened his tax bill and found out that New Baltimore estimated that each property was worth about $30,000 more than what he paid.
"It's worse out there than people think," Whittlesey said. "It's turning out that you can't sell a house for as much as the assessed value. You really can't."
When Whittlesey made his case to the Board of Review, imploring the assessor to reconsider the assessment, he got an optimistic reaction.
"The assessor needs to look at this," member Charlene McEachin told Whittlesey. "If there is an error, we will fix it."
This year's assessments hit Whittlesey's wallet in another way. The assessor increased the value of his rental storage units in New Baltimore by $60,000, to nearly $500,000.
He said the units are worth $400,000, especially since he can't find anyone to rent about a third of them.
"Things aren't going well right now," Whittlesey said. "That should be reflected in the assessed value."
BY CECIL ANGEL • FREE PRESS STAFF WRITER • March 14, 2008
All across the tri-county area, there's a different kind of March madness going on that doesn't involve basketball.
Property owners such as 80-year-old Eloise Carswell of Southfield are dissatisfied with their annual property tax assessments and are flocking to their local review boards seeking reductions. A lower property assessment generally means lower taxes.
Carswell said it would be hard to sell her three-bedroom, 2,136-square-foot house with the kind of taxes she has to pay. "This is not pennies," she told the board of her $6,000 yearly tax bill.
With the state recession and rampant foreclosures, disgruntled property owners basically want to know one thing:
"How can my taxes be going up when my property value is going down?" said Westland City Assessor James H. Elrod.
The answer is in Proposal A, the state law passed in 1994 that limits the increase in property taxes to the rate of inflation. So while selling prices soared in the 1990s, taxable values rose much slower. But now the taxable values can continue rising with inflation -- between 2% and 3% -- even though assessed values are now falling.
In Wayne County, projected property assessments in 2008 have dropped about 5%, and in Macomb, they've dropped 7%. Oakland expects a drop of about 0.4%.
State law requires that tax review boards meet in March and field complaints. Property owners are especially frustrated in light of the state's economic recession and the foreclosure crisis that have caused the market value of homes to drop.
How it's all determined
What may seem straightforward to property owners is actually not so simple.
Cities and townships perform mass appraisals comparing sales of comparable homes in the same neighborhood. Elrod said that drops in property values can vary depending on the neighborhood.
In Westland, there was a 7% drop in property values overall. In some neighborhoods, assessed values went up, but in others, values decreased by as much as 22%, according to city records.
How does a homeowner know when to appeal the assessment? He or she should look at the taxable value for 2008 on the assessment notices, Wayne County Assessor Gary Evanko said.
"If twice that number is more than what you think you can sell your house for, go see the Board of Review," Evanko said.
In Oakland, '$80 is $80'
Oakland County may be one the richest county in the state but it, too, has seen property values decline.
Farmington Hills City Assessor Dean Babb said his office fielded about 50 calls from people complaining about their taxes going up, but their assessments going down.
"If people are coming to question that and want to know why, everyone's going to be sympathetic, but the board can't control the calculation of the taxable value. That's mandated in the law."
Still, Claudia and Bradley Trudeau went to Farmington Hill's City Hall on Wednesday with that common quandry:
While their appraised and taxable value of their two-bedroom, two-bath condominium on Orchard Lake Road fell, their property taxes increased.
Claudia, a 51-year-old occupational therapist, and her husband, a 62-year-old retired letter carrier, said it didn't add up.
They pointed out their neighbors were slashing prices of for-sale condos from about $200,000 to the mid- and low $160,000s.
And yet the Trudeaus' property taxes were going up about $80, they told the Board of Review. That might not seem like a big hike, Claudia Trudeau said. "But," she added, "$80 is $80."
Farmington Hills tax assessor Dean Babb explained there was nothing he could do. He already reduced the couple's assessed value to $97,740 down from $104,060 the year before, he said. And it was state law, not the city, that controlled the taxable value of the home, he said sympathetically. Assessments fell in Farmington Hills about 5.68%.
Board of Review Chairwoman Dorothy Jeffres added: "What he's saying is you have to pay your taxes. And we'll see you next year."
Sales help make case for change
There were hints something was wrong with Eileen McDonell's property tax assessment.
For one, her bank notified her in 2004 that her escrow account was short. But it wasn't until earlier this month when she was chatting about taxes with her daughter-in-law Brigid McDonell -- who also lives in a townhouse condominium on Ravencrest near Newburgh Road in Westland -- that it all came together.
"When it went up, I never even realized it," said Eileen McDonell, 90. "I didn't know what other people were paying."
Somehow, the tax cap on her home established under Proposal A had been lifted, and her taxes shot up, the women surmised. McDonell's combined summer and winter 2007 taxes were $3,564.81.
McDonell, a widow, purchased her 1,190-square-foot, two-bedroom townhouse with her daughter Patricia Evans in 1999 for $159,000.
Evans died in 2004, and her children inherited her share of the home. They signed a quitclaim deed making it seem as though Eileen McDonell had just bought the home.
"We believe that's what triggered it," said daughter-in-law Brigid McDonell, 66.
The drop in value is what led the women to Westland City Hall on Wednesday to explain how condo prices in their development had fallen, making a case for lower taxes.
Eileen McDonell mostly observed as her daughter-in-law peeled off copies of sales over the past year. She showed the Westland Board of Review printouts of a condo that sold for $174,900 in October 2006 and sold again for $152,900 on Feb. 1.
She later explained to the board her theory as to why her mother-in-law's assessment increased.
Board member Tracey Sabotchick said the board would not be making any decisions Wednesday because it investigates each case. Eileen McDonell can expect to hear from the board by June 1, she said.
Oakland increase tied to addition
When Jeff Fendelet and Heather Kaminski bought their home in Commerce Township in 2005, their taxes were about $1,900 a year. Now, they pay about $2,700 a year.
After their tax assessment this year showed their home's value at nearly $170,000 -- about $15,000 more than it was appraised for in 2005, when they purchased the home -- they decided to appeal.
The couple, who are engaged, explained to the board that they bought their home for $152,000, about $3,000 less than its market value. They said a real estate agent told them last month that the house couldn't fetch more than $160,000.
But their assessment shows the home valued at more than $175,000. The couple is being taxed on the home's assessed value -- which is actually $87,970, half of the property's estimated market value.
"Our house is not valued at that," Kaminski, 31, told the board.
The board said that a small addition the couple made to the house may have increased its worth. Board member Barbara McNutt explained that the assessment might seem high in a market where home values are declining because the assessments were based on home sales between Oct. 1, 2006, and Sept. 30, 2007.
The couple will have to wait a few weeks to find out what the board decides.
Fendelet and Kaminski said they disagree that the 10-by-10-foot addition raised their home's value so much. Now they say they may not build the addition above their garage as they had planned.
Taxed out of Michigan?
In Macomb County, a similar song is being sung.
Joshua Vance thought he'd take advantage of the housing crunch by buying a foreclosed home for $135,000 and fixing it up so he could raise his two young children in a nice neighborhood in Clinton Township.
Three years later, Vance is thinking of moving -- not just out of his 2,400-square-foot house, but out of Michigan.
His frustrations grew when he opened his tax bill to discover that the assessor pegged the value of his house at $260,000.
While the estimated value was about $10,000 less than it was last year, Vance said the township didn't reduce the value enough in response to the continuing decline of the state's economy. A licensed real estate agent, Vance estimates his house is worth no more than $220,000.
"It's extremely elevated," Vance told the Clinton Township Board of Review this week, in hopes of getting his taxes reduced. "I think it's optimistic, especially considering the current economic situation."
Now he has a tough decision to make -- stay or move.
"I want to stay loyal to my state, but I have a family to raise," Vance said.
Changing economic times
In good economic times, Theodore Whittlesey could better understand why an assessor would raise the value of his two New Baltimore industrial lots beyond what he paid for them in January.
But with all of the "For Sale" signs he sees throughout southeast Michigan, Whittlesey said property values estimated by municipalities should drop.
Whittlesey bought the two lots for about $330,000 apiece in hopes of finding a buyer. Then, he opened his tax bill and found out that New Baltimore estimated that each property was worth about $30,000 more than what he paid.
"It's worse out there than people think," Whittlesey said. "It's turning out that you can't sell a house for as much as the assessed value. You really can't."
When Whittlesey made his case to the Board of Review, imploring the assessor to reconsider the assessment, he got an optimistic reaction.
"The assessor needs to look at this," member Charlene McEachin told Whittlesey. "If there is an error, we will fix it."
This year's assessments hit Whittlesey's wallet in another way. The assessor increased the value of his rental storage units in New Baltimore by $60,000, to nearly $500,000.
He said the units are worth $400,000, especially since he can't find anyone to rent about a third of them.
"Things aren't going well right now," Whittlesey said. "That should be reflected in the assessed value."
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