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A Simple Solution for Detroit

CalGun

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Detroit: What Else Can We Sell? - Yahoo! Finance

After auctioning off their assets for about $3 billion (I'm guessing) they should condemn any property with back taxes and take possession of the many residential lots and blighted homes in the city. There are a lot of them. Then they can open up an office to sell them again at a set price. The buyer would receive pure title to the property meaning it would never be able to be taxed. No property tax would ever be allowed to be imposed on the property. A lot of ultra libertarian types rail against property taxes suggesting you don't really own the property. This would be a truly unique offering in America as no properties exist that are free of "potential" property taxation. They might actually score enough ultra libertarians to move in and set up survival compounds and all that good stuff (sarcasm only slightly intended)
 

justabubba

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Detroit: What Else Can We Sell? - Yahoo! Finance

After auctioning off their assets for about $3 billion (I'm guessing) they should condemn any property with back taxes and take possession of the many residential lots and blighted homes in the city. There are a lot of them. Then they can open up an office to sell them again at a set price. The buyer would receive pure title to the property meaning it would never be able to be taxed. No property tax would ever be allowed to be imposed on the property. A lot of ultra libertarian types rail against property taxes suggesting you don't really own the property. This would be a truly unique offering in America as no properties exist that are free of "potential" property taxation. They might actually score enough ultra libertarians to move in and set up survival compounds and all that good stuff (sarcasm only slightly intended)
so, your great idea is to have non-property owners subsidize property owners' tax obligations
brilliant! [/sarcasm]

look forward to geoist chiming in on this one
 

CalGun

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No you missed a point. The new property owners will buy the lots and homes. They will pay a premium for not having to ever pay taxes in the future.
Right now you can buy an empty lot with sewer, water, and electrical connections ready in Detroit for $500/$750. But with a 10% property tax who'd
build a $75,000 home on it - you can't even rent that home for $7500 a year.

So they sell the lot without any tax requirements at all. No taxes to be paid on the land - ever. That makes the lot worth a decent sum more. I'd
suspect they'd get $10,000 maybe even $20,000 for such a lot where the owner can afford to build a nice home - one that will enhance the neighborhood.
Meanwhile the price paid for the lot helps them get over their debts.

It doesn't mean the city won't still have sales taxes, utility taxes, and usage fees for sewer, water and garbage it just means they won't be able to take
one's land away from them for not paying a property tax or assessment.

The quirk is simple - that does not exist anywhere in the world that I know of, and its so unique that it will attract land speculators in a big way - the
city can get out of debt. They said it was a city of 2 million and is now 700,000. Assuming an average of 3 persons per home - there might be 400,000
such properties in Detroit. 400,000 x $10,000 = $4 billion or $20,000 is $8 billion.

so, your great idea is to have non-property owners subsidize property owners' tax obligations
brilliant! [/sarcasm]

look forward to geoist chiming in on this one
 

KevinKohler

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It's a short sighted solution, and further, I'm not sure how many hardcore libertarian types have money, in any quantity. Most that do already moved to New Hampshire. I doubt they're looking to uproot yet again.
 

haymarket

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Detroit: What Else Can We Sell? - Yahoo! Finance

After auctioning off their assets for about $3 billion (I'm guessing) they should condemn any property with back taxes and take possession of the many residential lots and blighted homes in the city. There are a lot of them. Then they can open up an office to sell them again at a set price. The buyer would receive pure title to the property meaning it would never be able to be taxed. No property tax would ever be allowed to be imposed on the property. A lot of ultra libertarian types rail against property taxes suggesting you don't really own the property. This would be a truly unique offering in America as no properties exist that are free of "potential" property taxation. They might actually score enough ultra libertarians to move in and set up survival compounds and all that good stuff (sarcasm only slightly intended)

The idea that the city is going to deliver services to people not paying taxes is truly astounding in its utter insanity. :doh And this is a formula to return the city to solvency. :shock: Amazing. Truly amazing. :doh

I have never encountered any libertarian brave enough to enter Detroit s poor neighborhoods let alone one who would live there.
 

specklebang

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Didn't we do something similar to encourage people to move out west and stake claims. Don't we give breaks to attract businesses to various cities?

I think it's a great idea but I would provide a minimum standard for what is to be built on that property and what it looks like. You may not pay cash for taxes but you must be part of the show. If that creates something interesting, it will revive that area and more than pay its way long term.

I'm watching my own downtown, long neglected, begin a recovery through various incentives.
 

onlinebiker

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I think a more straightforward solution would be one I've considered for many years. Reroute the Detroit river about 10 miles to the west - starting at St Clair Shores and end up at about Wyandotte. Then we declare everything east of the river to be part of Canada - and threaten to go to war if they disagree. Problem solved.
 

Glen Contrarian

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No you missed a point. The new property owners will buy the lots and homes. They will pay a premium for not having to ever pay taxes in the future.
Right now you can buy an empty lot with sewer, water, and electrical connections ready in Detroit for $500/$750. But with a 10% property tax who'd
build a $75,000 home on it - you can't even rent that home for $7500 a year.

So they sell the lot without any tax requirements at all. No taxes to be paid on the land - ever. That makes the lot worth a decent sum more. I'd
suspect they'd get $10,000 maybe even $20,000 for such a lot where the owner can afford to build a nice home - one that will enhance the neighborhood.
Meanwhile the price paid for the lot helps them get over their debts.

It doesn't mean the city won't still have sales taxes, utility taxes, and usage fees for sewer, water and garbage it just means they won't be able to take
one's land away from them for not paying a property tax or assessment.

The quirk is simple - that does not exist anywhere in the world that I know of, and its so unique that it will attract land speculators in a big way - the
city can get out of debt. They said it was a city of 2 million and is now 700,000. Assuming an average of 3 persons per home - there might be 400,000
such properties in Detroit. 400,000 x $10,000 = $4 billion or $20,000 is $8 billion.

And all those other taxes will be hiked to the point that they will make up for the lack of taxes from the properties - which is the only way the city will be able to fund little things like police, firefighters, and schools. The taxes are going to be paid anyway, but the result of your suggestion would be that the moneyed - the property owners - would be paying a lot less of that tax. This sounds great to those who believe in supply-side economics...but supply-side economics is a flawed economic theory thanks to a little-known fact that all economies are demand- (and not supply-) based.
 

CalGun

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And yet so many states apply 90% less property taxes and still manage all those services - shocking.


And all those other taxes will be hiked to the point that they will make up for the lack of taxes from the properties - which is the only way the city will be able to fund little things like police, firefighters, and schools. The taxes are going to be paid anyway, but the result of your suggestion would be that the moneyed - the property owners - would be paying a lot less of that tax. This sounds great to those who believe in supply-side economics...but supply-side economics is a flawed economic theory thanks to a little-known fact that all economies are demand- (and not supply-) based.
 

Fenton

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I think a more straightforward solution
would be one I've considered for many years. Reroute the Detroit river
about 10 miles to the west - starting at St Clair Shores and end up at about Wyandotte. Then we declare everything east of the river to be part of Canada - and threaten to go to war if they disagree. Problem solved.

Lol......we need guys like this running things.

Problem solvers. I think its a great idea.

Can you imagine what they're going to find once they cap off supply to that river and it runs dry ??
 

Glen Contrarian

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Sure, Nevada has now income tax and my prop tax is $385 a year for a lot of land which is worth plenty more than 100x that. California even has just a 1% property tax.

You're comparing apples and oranges by comparing cities to states. Cities do not have vast tracts of rural (or virtually unpopulated) lands which require little or no tax revenue other than that which is require to maintain roads. Cities are chock-full of people...and what so many political wonks don't get is that the single most important component of a city's infrastructure is its people...and in order to ensure the people are able to work, a significant tax base is required in order to maintain little things like police, firefighters, teachers, road crews, electricians, sanitation engineers, water and power distribution, traffic control, emergency responses...need I go on?

You can't get all that by putting so much of the tax burden on the middle-class and poor...but by taking away the property taxes, that's precisely what you're doing.
 

CalGun

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Cities in CA do not have seperate massive property taxes. I very much compared the same two things. I pay the same sales tax in my city in CA as I do for my small farm in CA - 1%. You can go on now if you like? Ignore reality the fact is many cities operate with out 10% property taxes like detroit. In FACT most California Cities get much less than 1% the state takes that and does its thing with it - leaving the cities less than a 1/3rd of it. So again - care to explain why detroit fails with 10% and California has cities without debt and operate on 1/3rd of 1%?


You're comparing apples and oranges by comparing cities to states. Cities do not have vast tracts of rural (or virtually unpopulated) lands which require little or no tax revenue other than that which is require to maintain roads. Cities are chock-full of people...and what so many political wonks don't get is that the single most important component of a city's infrastructure is its people...and in order to ensure the people are able to work, a significant tax base is required in order to maintain little things like police, firefighters, teachers, road crews, electricians, sanitation engineers, water and power distribution, traffic control, emergency responses...need I go on?

You can't get all that by putting so much of the tax burden on the middle-class and poor...but by taking away the property taxes, that's precisely what you're doing.
 

Dapper Andy

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No you missed a point. The new property owners will buy the lots and homes. They will pay a premium for not having to ever pay taxes in the future.
Right now you can buy an empty lot with sewer, water, and electrical connections ready in Detroit for $500/$750. But with a 10% property tax who'd
build a $75,000 home on it - you can't even rent that home for $7500 a year.

So they sell the lot without any tax requirements at all. No taxes to be paid on the land - ever. That makes the lot worth a decent sum more. I'd
suspect they'd get $10,000 maybe even $20,000 for such a lot where the owner can afford to build a nice home - one that will enhance the neighborhood.
Meanwhile the price paid for the lot helps them get over their debts.

It doesn't mean the city won't still have sales taxes, utility taxes, and usage fees for sewer, water and garbage it just means they won't be able to take
one's land away from them for not paying a property tax or assessment.

The quirk is simple - that does not exist anywhere in the world that I know of, and its so unique that it will attract land speculators in a big way - the
city can get out of debt. They said it was a city of 2 million and is now 700,000. Assuming an average of 3 persons per home - there might be 400,000
such properties in Detroit. 400,000 x $10,000 = $4 billion or $20,000 is $8 billion.

Sure but you do realize you're talking about attracting roughly 1.2 million people to Detroit, right?

That's about the size of two Bostons!
 

radcen

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Detroit: What Else Can We Sell? - Yahoo! Finance

After auctioning off their assets for about $3 billion (I'm guessing) they should condemn any property with back taxes and take possession of the many residential lots and blighted homes in the city. There are a lot of them. Then they can open up an office to sell them again at a set price. The buyer would receive pure title to the property meaning it would never be able to be taxed. No property tax would ever be allowed to be imposed on the property. A lot of ultra libertarian types rail against property taxes suggesting you don't really own the property. This would be a truly unique offering in America as no properties exist that are free of "potential" property taxation. They might actually score enough ultra libertarians to move in and set up survival compounds and all that good stuff (sarcasm only slightly intended)

It would be a short-term solution with long-term negative consequences. I'm ok with your proposals up to the no property taxes part. I would modify it like this...

  • Buyers would buy said property "free and clear", meaning that property would start from scratch and the new property owner would not be liable for any past obligations.
  • Sell at market value or at a reduced rate.
  • Require that the property be leveled within one year and improved within three years, or else the city buys it back at the same dollar amount for which it sold.
This would encourage revitalization and would secure long-term stability.
 

CalGun

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This really doesn't give them anything of value. Property taxes are 10% in Detroit. They buy the land for much less in that case and their improvements are taxed at 10% which means they have to earn 20% on their improvements to make it worth while as investors - not going to happen. Where as a property that is real estate tax free is a unique commodity in America. Listen to the "libertarians" rail on property taxes some time - they call it "not really owning the land." Well this would be the ONLY case in America where people would "own the land" without the threat of a government taking it from them for not paying taxes. That is a GREAT value. Industry would thrive under that = Jobs = Buyers for the vacant land. A totally win win situation and the City will still garnish revenue through its sales taxes, business taxes, and utility taxes. The city will charge for sewer, water and such services and will need to learn to live without debt and interest payments that kill it. The city needs to learn not to make defined benefit promises to public employees it can't afford to make - if it makes them it must set aside the money to fulfill them.


It would be a short-term solution with long-term negative consequences. I'm ok with your proposals up to the no property taxes part. I would modify it like this...

  • Buyers would buy said property "free and clear", meaning that property would start from scratch and the new property owner would not be liable for any past obligations.
  • Sell at market value or at a reduced rate.
  • Require that the property be leveled within one year and improved within three years, or else the city buys it back at the same dollar amount for which it sold.
This would encourage revitalization and would secure long-term stability.
 

radcen

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This really doesn't give them anything of value. Property taxes are 10% in Detroit. They buy the land for much less in that case and their improvements are taxed at 10% which means they have to earn 20% on their improvements to make it worth while as investors - not going to happen. Where as a property that is real estate tax free is a unique commodity in America. Listen to the "libertarians" rail on property taxes some time - they call it "not really owning the land." Well this would be the ONLY case in America where people would "own the land" without the threat of a government taking it from them for not paying taxes. That is a GREAT value. Industry would thrive under that = Jobs = Buyers for the vacant land. A totally win win situation and the City will still garnish revenue through its sales taxes, business taxes, and utility taxes. The city will charge for sewer, water and such services and will need to learn to live without debt and interest payments that kill it. The city needs to learn not to make defined benefit promises to public employees it can't afford to make - if it makes them it must set aside the money to fulfill them.

Yeah, your proposal would be a great value... for the buyer. It would be idiotic for a city to do, though.

Then again, it was idiocy for them to be in the bad situation they're currently in, so they just might go for it. They'd be long out of office before it caught up with the city... just like now.
 

CalGun

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Just curious.

Why would it be idiotic to attract industry that could own land tax free, people to live and work there on property they own and would never
have to worry about losing to government over taxes? How the heck could that be more idiotic that taxing property at a rate that creates $500
lot and $5,000 home values, blight and 2/3rds of a 2 million population missing - gone - history - becuase in part due to that taxation?

Yes of course you would need local taxes, but there are many other forms of local taxation that make more sense. Utility user taxes. City
sales tax. City income tax even if needed. User fees for sewer, water, storm drain, and garbage are normal here in CA. We pay for what
we use and not on the property in such volume.


Yeah, your proposal would be a great value... for the buyer. It would be idiotic for a city to do, though.

Then again, it was idiocy for them to be in the bad situation they're currently in, so they just might go for it. They'd be long out of office before it caught up with the city... just like now.
 

radcen

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Just curious.

Why would it be idiotic to attract industry that could own land tax free, people to live and work there on property they own and would never
have to worry about losing to government over taxes? How the heck could that be more idiotic that taxing property at a rate that creates $500
lot and $5,000 home values, blight and 2/3rds of a 2 million population missing - gone - history - becuase in part due to that taxation?

Yes of course you would need local taxes, but there are many other forms of local taxation that make more sense. Utility user taxes. City
sales tax. City income tax even if needed. User fees for sewer, water, storm drain, and garbage are normal here in CA. We pay for what
we use and not on the property in such volume.

The only way your plan could work is if the other taxes were raised to make up for the loss. In one sense it would be more fair to have people pay more directly for what they use, but the total money out would be a wash.
 

CalGun

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You know we have blighted homes where I live in CA. San Francisco has a few too. But they never seem to get down to $5k like they do in Detroit. Ever wonder why? There is a dump only a few blocks away from me I could buy for $79k right now. Yet the place I bought in detroit - a lot only - was $425 of which $250 was in back taxes.


The only way your plan could work is if the other taxes were raised to make up for the loss. In one sense it would be more fair to have people pay more directly for what they use, but the total money out would be a wash.
 

SMTA

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I think a more straightforward solution would be one I've considered for many years. Reroute the Detroit river about 10 miles to the west - starting at St Clair Shores and end up at about Wyandotte. Then we declare everything east of the river to be part of Canada - and threaten to go to war if they disagree. Problem solved.

Run for office and I would vote for you.
 

Fenton

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If you want the reasons for Detroits decline, just Google the timeline for Kwami Kirkpatricks Mayoral tenure there.
 
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