Durhal Pitches ‘Property Equity Tax’ to Take On Detroit Speculators

Taxing speculators more for sitting on unused land is a priority for Detroit mayoral candidate Fred Durhal, who wants to slash $500 off property tax bills for Detroit homeowners.

Durhal told Michigan Chronicle in an interview last week the goal of the proposal is to ensure productive use of land across the city. He wants the city to get aggressive going after owners of blighted property.

His plan is to lower the property tax millage for residents by about 19.5 mills and make up for it by charging speculators more.

“Folks who are either sitting on land that is non-owner occupied or is underdeveloped. We always use the example of flat lot structures that have 50-60 cars parked right on them to generate $2-3 million in revenue but only pay about $10,000 in property taxes,” Durhal said. “We’re going to charge them more so residents pay less.”

Durhal also wants to introduce a blight tax to charge 25 times the property tax millage for non-owner occupied structures on commercial corridors, as well as in the neighborhoods.

“Folks come up here, they buy 10 or 15 houses — they don’t live in the city of Detroit or even live in state, which means families can’t get homes,” Durhal said. “Whether it’s on Schoolcraft, or Greenfield, you have folks who have owned parcels for years and they’re waiting to sell it because they know that property values are rising. If you’re going to do that, at least keep these properties up. Make sure the roof isn’t falling in. Make sure it’s not a danger to residents, that you’re cutting the grass so the neighbors don’t have to go through that.”

Durhal’s plan would charge developers who are contributing to blight by sitting on land that isn’t being used. Developers buying up parcels typically are looking for contiguous land to be able to develop it for a large project to the highest bidder.

The other part of the proposal includes a property tax relief fund that will allow the city to reduce its debt millage that adds to the property tax burden of residents.

The city approved in its latest fiscal budget a tax break for residents that will put on average an extra $100 in the pockets of residents. Durhal says bringing these plans together comprehensively, which will require help from state legislators in Lansing, would save residents $400-$600 dollars.

“Detroit is an old city,” Durhal said. “A lot of these structures have sat vacant for years, and change hands. It takes a money and capital to develop these structures, and the longer we let them sit, the more blighted they’ll become. I think we’ll start to see growth in corridors across the city.”

Some properties that have been vacant for over 20 years are just now starting to see stabilization after the city demolished abandoned as part of Mayor Mike Duggan’s strategy. Durhal also points to the mass property abandonment that took place after the 1967 race riots.

“We saw our automotive industry move out of the city of Detroit, you saw a lot of it then, but you also saw it during the 2008 foreclosure crisis,” Durhal said.

Durhal says blight tickets currently cost developers next to nothing. Those with the ability to own multiple structures have the ability to pay a $500 fine for blight.

“You’re going to pay that at the end of the year and that’s it. When we charge 25 times more for that land, what we’re saying you’ll see is that owners will find a productive use, sell that land or get up off it,” Durhal said. “Our residents deserve to have neighborhoods and structures in them to put families in, or businesses in our commercial corridors.”

Other candidates running for mayor have also pitched ideas to generate new revenues through an “amusement” tax that would add a sales tax for admission to sporting events, concerts and large events.

City Council President Mary Sheffield, who is also running for mayor, has pointed to a Citizens Research Council of Michigan study for a local amusement tax. The Citizens Research Council study showed an amusement tax with a $3 fee on tickets would raise nearly $8 million from Tigers, Lions and other events held at Ford Field or Little Caesars Arena based on 2022 attendance records.

Nonprofit CEO and mayoral candidate Saunteel Jenkins has also pitched a new sales tax that she says would bring the city over $100 million.

“I would find a new revenue source such as what I’m calling a ‘penny for Detroiters’ local tax. That 1 cent can generate over $100 million, which would give us a revenue source that enables us to dramatically reduce our property taxes and make it more affordable to buy a home and live here,” Jenkins said at the WDIV debate last month.