Race tax harms African Americans
In Quartz, I described a rarely noticed but devastating development that is undermining African American working and middle class families—a racially disparate property tax system that, in many cities, extorts a premium from African American homeowners. This premium can be so large that families lose homes when cities foreclose on properties where taxes have become unaffordable.
This discriminatory race tax has arisen because homes in African American neighborhoods that lost value following the housing price bubble collapse in 2008 have, in the subsequent recovery, been slower to recover value than properties in white neighborhoods. In most cities, assessors are required to re-assess properties on a regular basis, but when they have failed to do so, homeowners in African American neighborhoods wind up paying more tax relative to their home values than homeowners in white neighborhoods.
There is a long history of such unlawful and unconstitutional inequities. My forthcoming book, The Color of Law, describes how in major metropolitan areas in the mid-twentieth century, homes in African American neighborhoods were over-assessed, while homes in white neighborhoods were under-assessed, resulting in a substantial race tax that depressed the incomes of African American homeowners. For example, a late 1970s study of property tax policies in Chicago found that in the white neighborhood where Mayor Richard J. Daley resided, homes were assessed at half of the legally prescribed ratio of assessed-to-market value, while in the nearby African American North Lawndale neighborhood, assessments were about three times the legally-prescribed ratio. Researchers who studied this pattern and controlled for other possible causes concluded that race was the only conceivable explanation.
Today, homeowners in many African American neighborhoods face an epidemic of foreclosures resulting, in part, from an unlawful racially disparate property tax system. The NAACP Legal Defense and Educational Fund (at whose research arm, the Thurgood Marshall Institute, I am a fellow) recently filed suit regarding the over-assessment of African American properties in Detroit, and the resulting epidemic of foreclosures and evictions.