Detroit Mayor Mike Duggan Announces Proposed “Land Value Tax” Designed to Reward Neighborhood Homeowners and Reduce Blight

• Unemployment is at a 33-year low in Detroit, but new home building is still stagnant and population loss persists.
• Proposed Land Value Tax would increase taxes on property, but reduce taxes on buildings, rewarding homeowners and penalizing neglectful landowners.
• Duggan says the plan would cut taxes on buildings by 30% and triple taxes on land.

“In Detroit, blight is rewarded, and building is punished,” Detroit Mayor Mike Duggan told a packed room during his keynote address at the Mackinac Policy Conference. His keynote speech also unveiled a proposed plan to change, over the course of several years, the way property owners are taxed in the city.

Touting the plan as “the biggest building of wealth in Detroit history,” Duggan said the Land Value Tax system would help alleviate some of the blight that has plagued much of the city’s 30,000 vacant but owned lots. Previously, said Duggan, owners of vacant buildings were incentivized to let the buildings decay, since taxes were assessed on the value of the building rather than the value of the property itself.

“If you let your building go, your taxes go to zero,” Duggan said of the city’s current tax system. “We rewarded the owner for depressing the neighborhood.”

Under the proposed plan, owners of vacant lots, vacant commercial buildings, scrapyards, and surface parking lots would see the greatest increase in taxes. By contrast, Duggan used the stories of three long-term Detroit residents to demonstrate how residents have suffered under the previous property tax structure. Each resident maintained their home and land in good condition and saw their property taxes rise — to almost triple that of the abandoned and neglected apartment building next to them.

The mayor estimated that Detroit homeowners will see $500 to $2,000 per year in savings under the proposed program. The next steps, he said, are to finalize a “fairest possible formula” for calculating taxes, then take the issue to legislators in Lansing and then Detroit voters in 2024.

Duggan described his vision for 10 years from now, hoping that “there’s a mayor standing here who’s showing you nothing but development from one end of the city to the other.”

The keynote address was sponsored by Strategic Staffing Solutions.