November 16, 2022
Hikes in property tax assessments due to the pandemic-era housing boom have raised concerns for homeowners already squeezed by inflation across the U.S. In May of this year, CBS News anticipated a coming “shock” to homeowners as potentially larger property tax bills add to already escalating household costs. And in places from Minneapolis to Philadelphia, residents have expressed concerns about being able to stay in their homes as new property tax assessments arrive in mailboxes, putting many residents at risk of footing the bill for a greater share of city budgets than they can currently afford.
Like with most things involving real estate, even as rapidly escalating property tax assessments affect nearly every homeowner in this housing boom, they most profoundly impact Black owner-occupants. Relative to the market value of their homes, Black residents across the U.S. on average pay 10-13 percent more than their white peers in property taxes. This means that though Black homes are typically undervalued when it comes to home lending appraisals and sales compared to homes of white peers (thus leading to lower equity gains), higher tax burdens relative to the value of those homes further exacerbates the racial wealth gap. Essentially, and as our latest policy brief on the relationship between segregation and property tax assessments explains in greater detail: Black homeowners make less off their homes than white homeowners while they are charged more money relative to those homes’ value to live in them. To fix this, we must implement a range of policies including smaller assessment areas, tax foreclosure diversion programs, and shorter assessment intervals…in addition, of course, to redress!
Beyond our own research on the relationship between racial equity and property tax assessments, we can recommend a number of recent insightful articles on this subject, some of which are cited in our policy brief. They include a case study in Shelterforce of how an unfair property tax assessment system has affected Asheville, North Carolina, which potentially lost out on $4 million in tax dollars from higher-income homeowners while over-taxing low-income homeowners by $1.5 million due to inequalities in its 2021 assessments. We’d further suggest the Center Community Progress’ latest brief on how to equitably deal with tax delinquent properties so that they do not result in the further devaluation of Black neighborhoods.
Without redressing the forces of segregation that empower the devaluation of Black homes and embolden the over-taxation of Black property owners, the U.S. will continue to face a widening racial wealth gap. Without redressing how unequal property tax assessments impact lower-income households, and particularly households of color, the U.S. will also see a continued widening of inequality between thriving homeowners and a renter class increasingly unable to afford home purchases or the taxes required to stay in purchased homes.
At the Redress Movement, we are interested in building community power to address these and other issues related to segregation by agitating for actions of redress responsive to segregation’s history. To engage with more news stories related to redress and to hear more about our work, sign up to join our mailing list and keep an eye out for news updates in this section of our website. Also be sure to explore our resource pages where you can learn more about the history and consequences of segregation, read through the vocabulary of segregation, use our Citizens’ Guide to discover how segregation affects your community, or download one of our policy briefs on current segregation-related housing issues.