Wayne County panel hears expert on Detroit ‘uncapping’ case and mayor’s push for IAAO 'gold standard' assessments

The Wayne County Commission Committee on Ways and Means spent the largest portion of its meeting on Michigan’s taxable-value 'uncapping' process and recent concerns about Detroit property assessments.

Scott Vandermergl, director of assessment and equalization, told commissioners a news report about a couple who bought a Midtown duplex and saw their tax bill rise from about $3,500 to roughly $20,000 after the taxable value was 'uncapped.' Vandermergl explained that the uncapping reflected the taxable value rising to the assessed value and is a predictable effect when market values appreciate: “So after the uncapping process… the taxes went to $20,000.”

Vandermergl reviewed the two numbers on the assessment roll — assessed value (tied to market) and taxable value (tied to the tax bill) — and reminded the committee that Michigan’s Proposal A (a constitutional amendment) limits annual increases in taxable value to 5% or the rate of inflation, whichever is lower. He said that while average equalized values aim for 50% of market value, sales ratios and dispersion mean some properties are proportionately over- or under-assessed.

The Detroit mayor’s recent executive order — discussed in the presentation — directs the city assessor to pursue the standards of the International Association of Assessing Officers (IAAO). Vandermergl described the mayor’s directive as an effort to move beyond minimal compliance toward “gold standard” practices: “The mayor has said… we wanna reach for the gold standard.” He and staff also walked commissioners through the statistical tools (for example, PRD, price-related differential) used to identify progressive or regressive assessment patterns.

On remedies and near-term options for residents, Vandermergl said people who feel aggrieved should first contact their city assessor to verify physical characteristics and, if hardship or limited means exist, consider a poverty exemption application. For disagreements over value there is a March Board of Review and an assessor’s review at the city level; Vandermergl also noted the state tax commission can exercise oversight.

Commissioners raised questions about transparency and consumer protection. Several members asked whether buyers routinely are informed at closing about the uncapping risk and discussed proposing legislation to require disclosure. One commissioner asked staff to draft a resolution calling on the state legislature to require real estate disclosures so buyers are warned of potential tax changes; the chair said staff would work with commissioners to draft that resolution.

Why it matters: rapid appreciation in Detroit neighborhoods can cause a significant tax increase for new buyers even on identical homes next door to longtime owners, raising concerns about fairness, disclosure and the practical burdens on residents.

(Reporting based on testimony from Scott Vandermergl and commissioners’ statements during the Ways & Means Committee meeting.)