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Study shows black homeowners pay higher property taxes

By Mike Wheatley | July 11, 2020

A new analysis from economists Troup Howard of the University of Utah and Carlos Avenancio-Leon of Indiana University has found that black households on average pay 13% more in property taxes every year than white households with similar finances.

The analysis, published in a working paper, says that homes owned by black families tend to be assessed at higher values than their actual sales price. The findings came after an analysis of more than a decade’s worth of tax assessments and sales data from 118 million homes in the U.S. The researchers found that property tax assessments were higher in areas predominantly populated by blacks and also Hispanics in almost every U.S. state.

The researchers concluded that inequities in tax assessment have been built into the system over several decades.

“During the Jim Crow era, local white officials routinely manipulated property tax assessments to overburden and punish black populations and as a hidden tax break to landowning white gentry,” University of Virginia historian Andrew Kahrl told The Washington Post.

Kahrl, who has carried out extensive research into the history of property discrimination against black Americans, added that some county assessors overvalue black-owned homes intentionally in those days.

The analysis found that black-owned homes tend to be valued more moderately than white-owned homes in general. But if an assessor assumes that a black-owned home increases its value at the same pace as a white-owned home, then its assessed value can be higher than its actual value. That results in the homeowner paying more in property taxes than they actually should be paying.

The economists also took into account some 3.4 million property tax appeals filed in Chicago and its surrounding areas, and found that black homeowners were much less likely to appeal than whites. And for those that did file an appeal, they were significantly less likely to win it.

Howard told the Washington Post that the study wasn’t designed to show what he called “active discrimination”, but said that can’t be ruled out either.

“You can equally tell the story that assessors don’t realize how unequally the burden is landing along racial and ethnic lines,” Howard said.

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected].
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