By Eric McClure
Median home values in Kalamazoo were $98,000 on average between 2010 and 2014, according to data collected by the U.S. Census Bureau. This value increased to $107,000 on average for 2015, according to censusreporter.org, a website funded by the Knight Foundation that serves to provide easier access to census data.
A resident’s property value is determined “based on the condition of the property on Dec. 31 (Tax Day) of the previous year,” according to a property tax guide on the city’s website. The city assessor maintains a property report card, which includes sale information and property characteristics for each property. Using the property report card, along with sales studies for the neighborhood and city in which the property is located, the assessor determines the market value of a resident’s property.
Increased home values result in an increase in the amount of property taxes paid by residents. This in turn results in an increased amount of revenue collected through property taxes by the city.
Property taxes were expected to increase by about 3.6 percent during 2016, according to Kalamazoo’s 2016 adopted budget. This followed a 3.5 percent property tax increase in 2015. The growth of residential property values is the primary reason for the increase in property taxes.
Kalamazoo was projected to collect over $28 million in 2016 in operating taxes, which are the property taxes that are paid by residents, according to the budget. This same figure was projected to be over $29 million for 2017, an increase of nearly $700,000.
In addition to the increase in property values, and thus the revenue collected from property taxes, the recent multi-million dollar donation to Kalamazoo is poised to help stabilize the city’s budget.
The donation by local institutions and philanthropists, announced on July 28, will provide $70 million to Kalamazoo over the next three years, and establish a goal to fully fund the endowment after the first three years, according to the city’s Foundation for Excellence website. The website states that the foundation will not only help to stabilize the city budget, but will also help reduce property taxes in the long term and allow for investment in the community. The Kalamazoo City Commission approved an agreement between the city and the donors that included the initial creation of the foundation at a special work session on Oct. 24.
The potential impact of increased home values and property taxes seems to vary, but what unites residents is their hope for what Kalamazoo might do with an increase in revenue.
“I’ve seen a minimal increase in my property taxes, but I do believe that the increase is fair,” said Julie Miller, 45, an event and program manager for the Food Bank of South Central Michigan.
Miller, who has been a resident of Kalamazoo for 18 years, hopes that the increased revenue allows the city to invest in the community. “There are many roads that are still in need of repair. I’d also like to see money put back into the improvement of the infrastructure of schools and more money invested into the parks system,” she said.
Some residents point towards increasing property taxes as a sign of a rebounding housing market.
“Our property values dropped during the housing crisis nine years ago,” said Todd Walker, 54, who delivers parts for Harold Zeigler. “As our property values dropped, so did our property taxes. Both of these have been on a slow increase which is a good thing, because homes in my neighborhood are still undervalued.”
As a 13-year resident of Kalamazoo, Walker hopes that his increased property taxes will help to pay for city services, such as schools, police, transportation and social programs.
Those who rent homes within Kalamazoo are also seeing rising property taxes expressed through higher rent.
“I feel like we do overpay for rent because the property taxes are high,” said Paige Duncan, 19, a stocker at Meijer.
Duncan, who has been a renter for this past year, does see a possible benefit from paying higher rent. “My hope is that with rent and taxes being higher, it will help with keeping the city clean and prevent trash from being left around.”