Detroit — Residential property values in 2018 rose in more than 90 percent of Detroit’s 194 neighborhoods, Mayor Mike Duggan announced Tuesday, saying it's a sign that revitalization efforts are impacting more areas of the city.

The average increase in residential value citywide was 12 percent, with several neighborhoods seeing gains of more than 20 percent, according to data released Tuesday by the City Assessor’s Office as part of its annual proposed property assessment changes.

"I always thought that we would see double-digit increases,” Duggan said Tuesday during a press conference on the 2018 assessments. "But it's one thing to think it should be happening, and it's another thing when the assessor walks into your office and shows you the map that it's happening all across the city. That’s reassuring.”

The new values are based on two years of market data, which included nearly 11,000 valid arms-length transactions, a 16 percent increase in activity from the last year’s assessment, city officials said.

According to the assessor’s data, residential properties gained more than $400 million in value in 2018 compared to the year before.

Last year, the city announced an increase of 5 percent in assessments citywide. Prior to that, residential property values in the city had dropped annually for 17 years, including a nearly $1 billion drop from 2013 to 2014, according to city officials.

Assessed residential value changes across the city’s neighborhoods include:

52 neighborhoods had an increase in value in the range of 1 percent to 10 percent

100 neighborhoods had an increase in value in the range of 10 percent to 20 percent.

24 neighborhoods had an increase in value in the range of 20 percent to 40 percent

Two neighborhoods had an increase in value above 40 percent. The Midtown and Brush park areas had large increases due to the transition in use and new construction.

16 neighborhoods had a decrease in value in the range of minus 1 percent to minus 15 percent.

While property values have increases sharply, property taxes for most will not, city officials said.

Under state law, the annual increase in property taxes is capped at 1.02 percent. Most Detroiters will see around a 1 percent tax increase, city officials said, and proposed residential assessment changes are to be mailed out this week.

Councilwoman Janée Ayers said it's wonderful to see property values rising in the city's neighborhoods instead of the continued decline the city had been experiencing.

"With those increases, we are also going to see increases in pride and in neighborhood standards," said Ayers during an afternoon press conference on the assessments. "I'm hoping it creates an infectious trend that goes through every corner of this city where they have a different level of pride because they see the fruits of their labor being returned back to their property."

Councilman Scott Benson said the data shows the city is on its way back.

"A large majority of our residents hold wealth within their properties," Benson said. "To at times see double-digit increase means you are going to see more money and now an opportunity to access credit that hasn't been available to Detroiters in the past. This is huge."

DaRell Reed, president of the Morningside Neighborhood Association and a local pastor, said he is excited proprieties are worth more in Detroit, especially in his eastside neighborhood where values went up 15 percent or more.

"This is something I have been telling people who want to move to different areas: that Morningside is the place to be," Reed said during the press conference. "You can get the bang for your buck at Morningside. Purchase a house, and by the time you finish painting and changed the locks, the property value may be double that what it was."

The city has spent the last several years conducting a citywide reassessment of its properties to bring them in line with market value.

The reassessment was initiated in 2014 as part of a state overhaul to bring Detroit’s assessment role into compliance with the General Property Tax Act to ensure all assessments are at one half of the market value and that like properties are uniform.

The city had been operating under state oversight since 2014 in the wake of mismanagement in Detroit’s Assessment Division, widespread over-assessments and rampant tax delinquencies. That lifted in August 2017.

It took four years and $8.25 million to reassess every single property in Detroit, said Alvin Horhn, the city's deputy chief financial officer/assessor.

"The state is no longer involved in assessments. They handed the role back to the city of Detroit," Horhn said. "The last two years of reappraisals have been done by city employees, very little state oversight ...and relatively low county oversight. This has been an internal project, and it's gone quite well considering the complexity of it and the fact that the city hadn't done a reappraisal in close to 60 years."

State oversight stemmed from a yearlong investigation by The Detroit News that found Detroit was over assessing homes by an average of 65 percent, leading to higher tax bills, according to an analysis of more than 4,000 appeal decisions by a state tax board.

Meanwhile, the city’s commercial properties saw a major upward readjustment based on a recently completed citywide reappraisal, Duggan's staff said.

The reappraisal — the first on commercial properties in decades — showed a 35 percent increase in value citywide, bringing the assessed value for all commercial properties from $2.96 billion to more than $4.5 billion.

While most of the value growth occurred in the city’s core, commercial properties across the city saw significant increases in their values, city officials said.

"This sends a clear message that Detroit is a good investment,” Duggan said. “There is a great deal of activity taking place in our neighborhood commercial districts, and we expect these values to continue to rise.”

Interim Chief Financial Officer Dave Massaron said while there are far more residential properties in the city, it is the commercial and industrial classes of property that contribute the largest share of the city’s property tax revenue annually.

Proposed assessment notices are being mailed out this week to the city’s 270,000 residential and industrial property owners, advising them of their proposed assessments for 2019.

Actual bills will be mailed out in July and payments are due Aug. 15. Commercial property owners will receive their notices later, city officials said.

How to appeal your propose assessment

All property owners have the right under state law to appeal their proposed assessments.

The Assessors Review appeal process is in Detroit from Feb. 1-15 in Room 804 of the Coleman A. Young Municipal Center, 2 Woodward Ave.

The March Board of Review, the second step in the review process, runs March 6-23 in Room 1208 of the Coleman A. Young Municipal Center.

Anyone with questions or wishing to challenge their assessments can email the Assessor’s office at Assessorreview@Detroitmi.gov.

jchambers@detnews.com