If you live in or around Ann Arbor long enough, you will inevitably hear the “gameday home” or “football pad.” For those unaware, a gameday home is a second home owned by wealthy alumni who use them to stay in town weekends during football season, and have them sit empty for the rest of the year. MLive reported on this in January, reporting “reviewed tax records for a dozen high-end condo developments built in the downtown area and near the Big House in the last decade, finding 70 of 176 units — 40% — do not have principal residence exemptions, meaning they are not primary homes for the owners.”
Because of this, some have suggested Ann Arbor institute a pied-à-terre tax, similar to the tax that just was enacted in New York City by Zohran Mamdani. This tax would affect condos valued over $1 million and single family homes valued over $5 million, and is estimated to generate $500 million in tax revenue. There are three issues with MLive’s reporting and what that would mean to instituting a similar tax in Ann Arbor, assuming we would be able to overcome current state law that would prohibit such a tax: The first is that they are only looking at select homes, the second is that they are insinuating that if a home is not a principal residence exemption that no one lives, ignoring that these units can be rentals. The third and biggest issue is that such a tax will just not affect many homes, nor will make any sort of dent in the city’s housing.
To address the first two, we must take a holistic view of the city. There are currently 28676
parcels in Ann Arbor classified as residential (meaning they have some sort of home, as opposed to having a grocery store or a restaurant or an office building, which would be classified as commercial or industrial, or an empty lot, which would be classified as vacant). Of those homes there are currently 2024 homes assessed at being worth over $1 million. Of those homes, only 268 have no PRE. Of those homes, 116 have rental licenses, meaning that someone does live there, they just aren’t the owner. That leaves just 152 homes, or 0.53% of the residential homes in the city.
Of those 152 homes, there are new developments, like the Detroit Street Condos, which have not transferred to its new owner yet, parcels set to be redeveloped, like 1680 Dhu Varren Rd, are currently being sold by their owner, or are listed for rent, despite not having a rental certificate, or are being used for commercial purposes, such as a day care. All together, I was able to find 42 of these units, bringing our count down to 110 homes. Of these 110 homes, some are gameday homes (this includes single family homes, not just condos). But others are owned by parents of students that go to Michigan, homes owned by irrevocable trusts (which means the home doesn’t qualify for PRE, even if the owner lives in the home full time), and some are homes that recently sold, and the new owner hasn’t moved to Ann Arbor yet. All of these are homes to someone, and not just places that stay year round, minus 8 football weekends.
Would a pied-à-terre tax help bring in money for the city while only affecting the most affluent? Maybe. Would it bring in that much money? I don’t believe so.
We can also take a closer look at the MLive article, and see their calculations were also wrong in addition to their methodology
“At Kingsley Condominiums, 218 W. Kingsley St., 17 of 50 units are not owners’ primary residences”
To start, MLive says there are 50 units. There are 50 parcels at 218 W. Kingsley St, but one of those parcels is a personal property parcel. Personal property refers to business equipment, like furniture or office equipment, so this wouldn’t be a home someone can live in. Taking that out, there are only 14 of 49 parcels that don’t have PREs, not 17. And none of them have a PRE effective date in 2026, so this is not a timing issue. To go further, of those 14 parcels, two have rental licenses, so it’s incorrect to say those are second homes; those are someone’s home, just not the property owner. Four more have been listed for rent while owned by the current owner, and are possible unlicensed rentals. One is a unit that hadn’t sold to an owner yet (EDIT: this unit sold in May, and now has a PRE). That leaves seven units that could potentially be second homes, which is much smaller than the alleged 17 in the above MLive article.
“There is always a well-known solution to every human problem — neat, plausible, and wrong” - H.L. Mencken
Why does this matter? That’s the third reason I mentioned earlier. It is an oversimplification of a larger problem. For some, our current housing crisis is clear. There are bad actors, acting poorly, and this causes all of our problems. If we could just stop the wealthy out-of-town alumni from buying the homes, we would fix the housing crisis. Or better, if we could just stop the developers from making homes for those wealthy people, we would all be able to afford homes. This is Scooby Doo logic, where if we simply find the unambiguous bad guy, and remove their mask, we will fix the problem.
The reality is we do need more housing. Period. We need more housing of all kinds. We need more affordable housing, and I’m glad that all candidates in the upcoming elections believe this, and I’m glad that Ann Arbor is currently making historic investments in affordable housing,with places like Dunbar Tower and the old Y Lot. But building affordable housing is much easier said than done, and isn’t going to be enough on its own.
We need more market rate housing to fix the housing crisis. Yes, even the expensive condos help fix the housing crisis. The housing market is not a few tweaks away from getting fixed. It would be very comforting if all we had to do was take a couple of homes away from the rich out-of-towners. It would be very comforting if that was all we had to do, and Ann Arbor could just stay the same forever. But it’s just not true. We need more housing, and the only way to do that is by building more housing. It might feel good to go after some hypothetical rich alumni, but that’s not going to help people.
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