Wyandotte city officials and Downriver state officials are coming closer to tightening a loop hole in the law that prevents newer properties in tax abatement zones from receiving those breaks
It works like this: Wyandotte approved four new Neighborhood Enterprise Zones that will cut taxes by 65 percent earlier this summer. The NEZs, a commonly used tax break throughout Metro Detroit, save new home buyers thousands of dollars in taxes by lowering the tax rate to 16.86 mills from the normal city millage of 47.8 mills for 12 to 15 years. The idea is that these zones will help jump start the market for new housing in the Downriver community.
However, state law says that only homes built after the zones are implemented are eligible for the tax break. Close to 30 homes were already built and a vast majority of them not sold before the zones were established, thus they are not eligible for the tax break according to state law. That leaves builders unable to immediately use a tool designed to help them in harsh market conditions.
A bill closing that loop hole so all of the new homes are eligible passed the state House earlier this fall and is now awaiting consideration in the state Senate. It must pass both the state Senate and be signed by the governor to fix the law, something city officials are hopeful could happen by the end of the year.
Wyandotte has been successful in helping spur a number of new housing developments that are constructing new homes on former vacant or brownfield parcels. However, of the nearly 30 new homes built, only a few have sold so far.
The four zones would encompass five new developments, including Labadie Park, Vinewood Village, City Garden, The Oaks and The Orchards.
Source: Joseph Voszatka, community development director for the city of Wyandotte
Writer: Jon Zemke
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