26 more neighborhoods to receive NEZ tax breaks

On July 25, Detroit City Council approved the list of 26 neighborhoods -- including Woodbridge, West Village, Midtown and New Center -- that Mayor Kwame Kilpatrick recommended to receive Neighborhood Enterprise Zone tax cuts for fifteen years starting in 2008. Last year, another 25 became eligible. Deputy press secretary James Canning explains that legally, up to 15% of the city can be designated NEZ and that only homestead homeowners are eligible. This is why the neighborhoods that were selected were those with the "densest homestead homeowner properties, where the most people have the potential to benefit."

As for revenue loss to the city, Canning says, "We don't see it as a loss, we see it as an investment. It will give more people the potential to buy a house." The city estimates it will lose $6-8 million a year and has factored that into the budget. However, they estimated the same amount of losses for this year, from the first 25 neighborhoods, and have only seen $2 million in losses because almost 80% of the 10,000 households eligible for the savings have not turned in an application. [Editor's note: What?!? And yes, applications are still being accepted from last year's group.]

Eligible residents will be mailed applications next week, which must be filled out and returned to the Assessor's Office. The application requires that the homeowner agrees to perform $500 worth of home improvements to the property within three years. If no proof is rendered within that time frame, NEZ status will be rescinded. Savings to the homeowner range from 18-35% of annual property taxes, as determined by the assessor. Any homestead homeowner that purchased their home since 1997 is eligible to apply.

Maps and a list of neighborhoods from both years are available here. A third and final crop of neighborhoods will be recommended again next year.

Source: James Canning, City of Detroit
Writer: Kelli B. Kavanaugh