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Assessment Growth Limits and Mobility: Evidence From Home Sale Data in Detroit, Michigan

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  • Timothy R. Hodge
  • Gary Sands
  • Mark Skidmore

Abstract

In 1994 the State of Michigan imposed a limit on the growth of property values for tax purposes. The assessment growth cap resulted in the emergence of a differential in effective tax rates between new and long-time property owners. This article examines the degree to which this differential creates a lock-in effect. Using parcel-level data from the City of Detroit, we find that homeowners who have lower effective tax rates are less likely to sell their properties; the average duration of property ownership is 7.5 years longer as a result of the assessment growth cap.

Suggested Citation

  • Timothy R. Hodge & Gary Sands & Mark Skidmore, 2015. "Assessment Growth Limits and Mobility: Evidence From Home Sale Data in Detroit, Michigan," National Tax Journal, National Tax Association;National Tax Journal, vol. 68(3), pages 573-600, September.
    • Handle: RePEc:ntj:journl:v:68:y:2015:i:3:p:573-600
    DOI: 10.17310/ntj.2015.3.04
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    File URL: https://doi.org/10.17310/ntj.2015.3.04
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    Cited by:

    1. Hodge, Timothy R. & Komarek, Timothy M., 2016. "Capitalizing on Neighborhood Enterprise Zones: Are Detroit residents paying for the NEZ Homestead exemption?," Regional Science and Urban Economics, Elsevier, vol. 61(C), pages 18-25.
    2. Geoffrey Propheter, 2021. "Sports facilities and the local property tax base in recovery," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(5), pages 1687-1701, October.
    3. William H. Hoyt & Aaron Yelowitz, 2016. "Anticipated Property Tax Increases and the Timing of Home Sales: Evidence from Administrative Data," CESifo Working Paper Series 6264, CESifo.

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