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Taxable Values Reduced by Southfield Bank Owned Homes

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By : Allana Castro    99 or more times read
Taxable property values dropped in Southfield by around 28 percent this year as Southfield bank owned homes and distressed commercial properties continued to surge.

As a result, the proposed city budget of $150 million for fiscal year 2010 to 2011 has a projected short fall of $7.5 million. Some officials have proposed eliminating the shortfall by using reserve funds, but others oppose the move as unsustainable. Increasing property tax rates is also not an option.

The general fund has already been cut down by $1.4 million to $67.2 million, as the attrition program resulted in total savings of around $2.8 million. Travel budgets for city officials have also been reduced from around $3,400 to $2,600.

The number of Southfield bank owned homes increased in April, following the statewide trend. In Oakland, where Southfield is located, more than 3,000 homes entered foreclosure, with almost 1,200 units becoming bank REO homes for sale.

In Greater Detroit, which also includes Southfield, more than 4,100 homes became REO units in April, almost double the 2,072 units repossessed in April 2009. Detroit and Southfield though are trying their best to contain these foreclosures by using the power of private-public partnerships.

In May, the number of bank owned properties in Michigan spiked to more than 8,000 units, up sharply by 28 percent from 6,252 in April. With one foreclosure for every 223 homes in Michigan, the state ranking climbed up from seventh in April to fifth in May.

The numbers have certainly discouraged public officials who were hoping for continued recovery when the unemployment rate dropped in April to 14 percent, from the December rate of 14.5 percent. Michigan still posted the highest jobless rate in the country, with Nevada second with 13.7 percent.

To contain the effects of Southfield bank owned homes and other distressed properties on city operations, city officials proposed making a 5-year stabilization scheme so the city does not have to rely on municipal reserves whenever money gets tight.
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