Buying in the city of Ypsilanti? No income tax — but the city's still paying off a big debt

Ypsilanti does not levy a city income tax. City leaders asked voters to approve one in 2007 and again in 2012, but both proposals failed. Each used the standard Michigan structure: 1% on residents and corporations and 0.5% on nonresidents who work in the city.

The proposals came during years of tight city budgets and a long-running debt tied to Water Street. In the early 2000s, the city borrowed roughly $30 million to assemble, clean up, and redevelop riverfront land east of downtown. The planned private development did not happen, leaving the city with the property and the debt.

The current Water Street bonds run through 2031. That debt helps explain why city finances can feel tight even without an income tax. For a buyer, the useful distinction is simple: Ypsilanti has no local income tax, but property taxes and the city’s broader budget pressures still matter.