Can America’s Unfair Property Tax System Ever Be Fixed?
A row of homes in Chicago. (Source: Flickr.)
A bottom-up approach is needed to make change to the multi-billion dollar disparities within the U.S.’s property tax system.
“If it’s not a high-profile issue locally, nobody sees it as an issue to fix,” said Dr. Christopher Berry of the University of Chicago during an interview with Strong Towns.
Dr. Berry has been covered by The New York Times and other publications for the shocking results in his nationwide study of property tax inequities. His study revealed that lower-income homes are being overtaxed, whereas higher income homes are being undertaxed. Overall, he concluded that most Americans are paying more than their fair share in property taxes.
“It’s a pretty obscure topic. Most people—surprisingly, given how expensive property taxes are—most people don't really look carefully at their bill,” said Dr. Berry.
Last year, around the same time Dr. Berry’s work was being published in The New York Times, data analytics firm Urban3 was discovering the issue of property tax disparities on a local level in Western North Carolina. “This is crazy, did we do this right?” were internal remarks within Urban3 as they uncovered multi-billion dollar disparities in property assessment outcomes in North Carolina.
The correlating data with Dr. Berry’s research spurred on Urban3’s local investigation, affirming that, indeed, many homeowners with lower-valued properties are spending hundreds of extra dollars on property taxes, whereas owners of higher-valued properties are more likely to receive a tax break, costing the county millions of dollars in lost revenue.
With such jaw-dropping evidence of inequity, Dr. Berry took his research to the International Association of Assessing Officers (IAAO), where he met resistance to the idea of addressing the problem.
To encapsulate the IAAO’s response, Dr. Berry said they evaded responsibility for the striking disparities, pushing the blame onto others. “They are just an association,” they said, “[and were] not responsible for individual assessments. It was not their job to fix a broken property tax system.” In 2021, Urban3 charged Buncombe Country, North Carolina, with property tax inequities, and was met with the same lack of openness to change. While an Ad Hoc Committee was created to address the inequities in Buncombe County, the recommendations made by the committee shied away from the more deeply rooted issues at hand.
"I think part of the problem is the assessors themselves,” said Dr. Berry. “They don't want to do it because I think, first of all, they don't really know what to do. They rightly say they're not doing this on purpose.”
So, How Do We Actually Change Our Broken System?
With many counties now diving into their own research on property tax inequities and advocating for change (Detroit, Michigan; New York City; Asheville, North Carolina, to name a few), there’s disputes in some areas over what true reform really looks like in such a polluted system. At the national level, mass media has increasingly profiled the broken property tax system in recent years, but for the most part, the “fix” for the issue has been politicians or assessors addressing current complaints with passive policies claiming to make a difference.
“I think the next step is for local people to take this on. I don't think anything will change unless there's pressure coming locally,” said Dr. Berry. “An academic paper is not going to change it and even high profile media attention, like The New York Times or The Washington Post is not going to change it.”
Local action has to occur for governments to work toward a fairer property tax system. Contacting your local assessor to address disparities within your community is always a great starting point, said Dr. Berry. “But in my experience, they're not going to get a lot of response from the assessor.” Many assessors don’t want to admit that a problem exists, so to spur change, Dr. Berry recommended putting pressure on government officials with jurisdiction over assessors, and finding politicians who are more sympathetic to equity issues. He also noted that this cause “can be politically beneficial for an aspiring politician to champion.”
Examples of Steps Toward Change
In Cook County, Chicago, after local journalists caused a stir with “The Tax Divide” investigation published in the Tribune and ProPublica Illinois, reform-level change did not begin until a new assessor, Fritz Kaegi, was elected in 2018.
“And no, he hasn't been able to fix the system,” said Dr. Berry. “But I would say he's cut regressivity by half or two-thirds in his first term.”
Kaegi stepped into the role ready to implement new models and make the information on how assessments are calculated more accessible and transparent—along with acknowledging the historical injustices of the property tax system. The Cook County assessor's website identifies the links between property tax inequities and past practices of "redlining, contract selling, and segregation," acknowledging that "Chicago and Cook County were not alone in this, but the extent to which it happened here could be called unique.”
“True change requires an honest and courageous examination of the machinery that created our current state of inequality and ongoing vigorous discussion of the instruments and interventions needed to establish a more equitable future in Cook County for the good of us all.”
Despite Kaegi’s efforts, local journalists have debated whether or not change is truly occurring. In a 2020 property tax analysis, the county treasurer reported that homeowners of lower-income properties were still disproportionately overtaxed. Many are hopeful this will continue to change for the better, however, as Kaegi works to push the property tax burden back to those who own higher-value properties.
“Luckily, the Tribune has written enough stories that it’s a high-profile issue,” said Dr. Berry. “[Kaegi] knows he's going to be held accountable for that when he goes for reelection, because [property tax inequities are] a big issue.”
The above data from Dr. Berry’s research reflects residential properties that sold between 2006 and 2018 (the most recent years available at the time of this research) in Cook County, Illinois. The maps “show the spatial distribution of sales ratios (top image) and effective tax rates (bottom image), respectively.” (Click to enlarge. Read the full report here.)
When “Change” Doesn’t Seem Like “True Change”
“We need local media to get people thinking about [property tax inequities],” said Dr. Berry. Once the public becomes invested in the issue, local politicians will be more likely to push for true change.
This rang true in Buncombe, North Carolina, when the Commissioners Board chose to not take immediate action on the insufficient recommendations presented by the Ad Hoc Committee. For months, the Ad Hoc Committee debated the process of the Buncombe property tax system and came up with potential steps to make it fairer. When they presented their recommendations, it was clear they had missed the mark in developing solutions that truly addressed the inequities.
“If I think back, when we started and set out with this,” said County Commissioner Al Whitesides, during the recommendations presentation by the Ad Hoc Committee, “one of the big questions was the disparity in the high-income homes for taxes vs the low-income homes specifically in the city. Did I miss this? Did you address this within the report?”
With outside pressure from Urban3 and Just Accounting for Health, local journalists, and the community, the commissioner’s office seems to be interested in continuing to interrogate the broken assessment system and produce better policies to address the issue.
“I do think it is impossible to fix completely,” said Dr. Berry. Still, “the assessors can do a lot better than they are now.”
Local activism is imperative to fixing this nationwide problem. We must hold our politicians and assessors accountable in the work they do to ensure true and equitable changes are implemented. The Just Accounting for Health consortium, which Strong Towns is a part of, is diving into the property tax and health inequities within North Carolina to bring light to the opaque system on a local level. To keep up with the progress and find inspiration for what you can do to spur change in your community, sign up for email alerts here.
Seairra Jones serves as the Lead Story Producer for Strong Towns. In the past, she's worked as a freelance journalist and videographer for a number of different organizations. She currently resides between small-town Illinois and the rural Midwest with her husband, where they help manage a family homestead. When Seairra isn’t focusing on how to make our towns stronger, you can find her outside working on the farm, writing fictional tales in a coffee shop, or reading in a hammock.