The Washington PostDemocracy Dies in Darkness

Black families pay significantly higher property taxes than white families, new analysis shows

Unfair property assessments lead to widespread overtaxation of black Americans’ homes

“It makes sense that a black family who has been disenfranchised from these systems wouldn’t challenge it,” said Damali Vidot, a member of the City Council in Chelsea, Mass. (Adam Glanzman for The Washington Post)

State by state, neighborhood by neighborhood, black families pay 13 percent more in property taxes each year than a white family would in the same situation, a massive new data analysis shows.

Black-owned homes are consistently assessed at higher values, relative to their actual sale price, than white homes, according to a new working paper by economists Troup Howard of the University of Utah and Carlos Avenancio-León of Indiana University.

African Americans have long said they bear a disproportionate burden for taxes that support local police, schools and parks, but nationwide measures of this type of systemic racism are hard to come by.

To expose the structural and historical factors behind these discriminatory property tax assessments, the economists analyzed more than a decade of tax assessment and sales data for 118 million homes throughout the country.

In almost every state, property tax assessments were higher in areas with more black and Hispanic residents. In city after city, the authors show it is not just differences in the buildings or land but also the racial composition of the neighborhood that matters. The gap between white families and minority households remains large — 10 percent — when you combine data for Hispanic and black families. (The authors excluded California because Proposition 13, passed in 1978, drastically changed how property is valued there.)

The findings did not surprise Charles, a Chicago-area general contractor in his mid-60s.

“We’ve always considered that in addition to paying your regular tax, there was a black tax that goes along with it,” said Charles, who spoke on the condition that his last name not be used, citing elevated personal and professional risks faced by black men right now.

Analysis: Redlining was banned 50 years ago. It’s still hurting minorities today.

Eighteen years ago, high and rising taxes drove Charles from his longtime home in a black neighborhood on Chicago’s South Side to a predominantly white neighborhood in Northwest Indiana. His was the only black family on the block, but his property taxes were much lower than in Chicago — and they stayed that way.

But he said he has never escaped what is often called the “black tax.”

“It’s almost like it’s in the soil,” he said. “It stretches all across the board. It’s not just real estate. It’s not just housing. It’s not just food deserts. It’s not just racism on the street. It’s not just that you can’t get a cab at night. It’s everything.”

Dorothy Brown, an Emory University law professor who researches systemic racism in tax policy and was not involved in this study, sees the same pervasive effect. “The structure of the property tax system operates to disadvantage black Americans,” she said. “That’s how structural racism is. It’s built into the system. The property tax system itself discriminates against black Americans.”

Inequities in tax assessment are among many factors weighing on black homeownership rates nationwide. Facing the accumulated disadvantages of centuries of repression and systemic racism, black Americans are likely to earn less than similar white workers in lower-paying service jobs, a dynamic that makes it more difficult to buy a home. Now, by hitting those jobs first and hardest, the coronavirus pandemic has made a bad situation worse. One in five black households have reported missing a mortgage payment since mid-March, compared with about 1 in 20 white ones.

“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,” said University of Virginia historian Andrew Kahrl.

Many county assessors intentionally overvalued black properties, sometimes in direct retaliation for black political action. Kahrl, whose has long researched the history of property tax discrimination against black Americans, has found white officials going to extreme lengths to hike black taxes. In one such case in 1932, a black North Carolina resident was taxed for the value of two stray dogs that had been seen on her property.

As early as 1901, W.E.B. Du Bois showed that because of their unequal tax burden, black people paid more in taxes than they received in public education funds, Kahrl noted. Du Bois worked to counter the racist narrative of white people as “makers” and black people as “takers.”

The fiction that “black people take services but they don’t pay taxes” remains widespread, Brown said. But in recent decades the forces raising black tax bills are more subtle.

The values of black-owned homes tend to grow more slowly than values of white-owned ones. The white people who make up the vast majority of home buyers tend to avoid black neighborhoods, which cuts black sellers off from many potential buyers. That can drive down the sale price of black-owned homes.

Given that difference in price appreciation, if an assessor assumes a black-owned home gains value as quickly as a white-owned home, the assessed value of the black-owned home will quickly outstrip its market value. Every year, the black family pays more in property taxes, even though the sales price of its home is not increasing as quickly. Nearby white families benefit from the opposite trend: Their homes increase in value more rapidly than their assessments, giving them an ever-growing tax break.

While neighborhood and race are the biggest drivers of the property tax gap, the economists found others. In particular, the appeals process illustrates how much of the property tax system functions in a way that penalizes black wealth, even as it appears neutral on its face.

Years after Michael Brown was shot, the neighborhood where he was killed still feels left behind

As part of their study, the economists reviewed 3.4 million property tax appeals from Chicago and surrounding Cook County and found black homeowners were significantly less likely to appeal their property tax assessments. When they did appeal, black homeowners were less likely to win. And when they won, they earned smaller assessment reductions.

Nationwide appeals data does not exist, and Cook County may be exceptional, but the findings ring true to black homeowners and experts throughout the country.

Damali Vidot, a 42-year-old Afro-Latina member of the Chelsea, Mass., city council, is familiar with these tax assessment challenges. She has long fought housing insecurity in her predominantly Latino, predominantly immigrant city just north of Boston.

“White people feel more comfortable working within the system that was set up to make them succeed,” said Vidot, a homeowner and community youth mentor who is running for the state legislature. “It makes sense that a black family who has been disenfranchised from these systems wouldn’t challenge it.” It is also difficult to work within the system for Latinos, many of whom do not speak English as a first language, she added.

Hazel Shakur has sold homes in the well-off, mostly black suburbs of Prince George’s County in Maryland for the better part of two decades. She is one of Redfin’s top-selling agents in the county but still faces the ever-present frustration of potential bidders backing out when they see how high their property tax bills would be.

Shakur has a business degree from American University, earned on a full scholarship, and has negotiated nearly 500 real estate transactions, yet said it had not occurred to her to challenge her own property taxes. She grew up in a renter household and was not taught about appealing property taxes or any of the other small strategies white homeowners have used to accumulate generational wealth.

“Sometimes you’re so glad to finally get somewhere that you don’t want to make a lot of noise and create any unwanted attention — you’re just grateful to have arrived and made it, and you pay your bills,” she said. “Even if you’re not happy about your property taxes, it doesn’t occur to you to question.”

Both economists behind the study first heard of overtaxation when talking with black and Hispanic homeowners in their prior work. Before he studied economics, Avenancio-León provided legal support at a Bay Area housing clinic. When he worked with other people of color, many told him they were not able to afford taxes and other housing costs.

“They feel their property taxes were being used to push them out of their places, especially when communities started gentrifying,” Avenancio-León said. It helped him see how property taxation can be used as a means of social engineering.

Around the same time, Howard was working in minority communities around Chicago, where people said they were being overtaxed and underserved by local governments. The feeling was pervasive, but nobody had been able to measure it nationally.

So the duo, then working on doctorate degrees at the University of California at Berkeley, combined 118 million real estate transactions and assessments from 2005 to 2016 with maps of more than 75,000 local taxing entities — such as counties, school districts, airport authorities and utility districts.

They used the maps to sort homes into areas that faced the same property tax burdens, identified the races of homeowners using federal mortgage data, and looked at every time a dwelling was assessed and then sold in the same year. That allowed them to compare a home’s assessed value and its market value, alongside the homeowner’s race and ethnicity.

The property tax gaps are worst for low earners, but even the highest-earning black Americans pay more on average in property taxes than similarly well-off white peers living nearby.

While the analysis is not designed to show “active” discrimination, it cannot be ruled out, Howard said. But, he said, “you can equally tell the story that assessors don’t realize how unequally the burden is landing along racial and ethnic lines.”

Whether or not these gaps were caused by explicit racism, Brown said, “you should be just as outraged that this is going on, and we should find a way to fix it.”

Michelle Singletary contributed to this report.