Authored by University of Chicago Political Scientist Christopher Berry, the study, “Reassessing the Property Tax,” breaks down four areas (Detroit, New Orleans, New York City and Chicago), examining their property assessments and comparing the selling price of homes to their determined value. In his research, Berry found that homes in the bottom 10 percent of property value pay an effective tax rate over twice that of homes in the top 10 percent.
In Detroit, for instance, a home that sold for $1,700 in 2010 was assessed at $41,000 (30 times its original price). The report attributes this difference to the impact of the 2008 Great Recession, when the assessed value for homes was becoming difficult to keep up with, contributing to a system of overassessment. In one instance, documented in an article by Bloomberg, Detroit resident Di Leshea Scott previously owned her home, but was forced to begin renting it after the Great Recession hit when she could no longer afford the annual tax payment. Berry states that while these things may not seem racist, they carry those same implications.
“There isn’t anybody making explicitly racial decisions to produce these outcomes,” he said. “Nevertheless, they are racially disproportionate.”
In Texas – specifically, Dallas – things are not much different. Stretched across a nine year span (from 2007 to 2016), the Property Tax Fairness tool found that the effective tax rate for the most expensive homes in Dallas remained steady at 2.14% while the least expensive homes fell from 2.28% to 2.21%, which is still 1.03 times more than the rate on the most expensive. In a 70% non-white population, 50% of the lowest value Dallas homes are under-assessed and 53% of the highest value homes are over-assessed.
Berry states that this widespread housing issue cannot be explained through regressive assessments and property taxes. The root of the problem is described as a combination of modeling limits and data. According to him, the system we have established for taxing homes is a backwards one.
“Despite its appealing features in theory,” he says. “Social scientists and policymakers should recognize the property tax as being regressive in practice.”
To find the property assessment of your area, check out the University of Chicago’s property tax fairness tool at propertytaxproject.uchicago.edu/data/.
Published by The Dallas Weekly