DETROIT (Michigan News Source) – The city of Detroit has increased the number of tax abatements it grants by nearly three times as much in the past six years.

The city has approved 35 tax abatements in 2023 for a total of $137 million in taxes abated. In 2017, the city granted 13 abatements for a total of $19.4 million in abated taxes, according to a report by the Citizens Research Council.

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“Rooted in the city’s use of tax abatements is an underlying understanding that the city is economically not competitive with larger cities in surrounding states or many of its surrounding suburbs,” the Citizens Research Council report stated. “A history of taxes levied at relatively high rates, high insurance costs, crime, aging infrastructure, and other factors have made this difficult in Detroit.”

The city is using tax abatements as a way to get more affordable housing in the city.

The City Council passed an ordinance in 2016 that required developers to include affordable rental units in residential projects that receive some form of direct financial assistance from the city.

In September, the City Council approved a Payment In Lieu of Taxes ordinance known as PILOT. The city said it needed to streamline the development process as it took between three to five years from abatement application to the start of construction.

The city stated the PILOT program “allows a city to cancel all property taxes for affordable housing projects and substitute a smaller payment to local government.”