Tag Archives: property taxes

Regressive Property Taxes Slam Lower Income Families

property tax, property tax assessment, property evaluation

April 5, 2021

New Orleans               Once you start looking at property tax assessments, you don’t know what you might end up doing when the stark reality of the inequity of regressive taxation hits you full in the face. At least that’s what happened to us almost fifty years ago when we first started sparring with Pulaski County officials in Little Rock, Arkansas over the inability to achieve updated and fair assessments for lower income property owners. ACORN members who were fortunate enough to own their homes were constantly complaining about the amount of their property taxes. We buried our researchers in the offices of the county assessor and found nothing but contradictions, as corporate properties and homes in more upper income areas in western Little Rock and the county were assessed at lower evaluations than in the neighborhoods where we had been organizing the Save the City campaign in 1972. One thing led to another, and the next thing you know we engineered an ACORN and allies take over of the governing body, the Quorum Court, in 1974 to force change.

A campaign like that teaches young organizers and their leaders and members indelible lessons about the policy differences between regressive taxes like those on property and basic purchases, like sales taxes, which hit hardest on inflexible and reduced incomes, compared to progressive taxes, like income taxes, which equitably distribute the burden and dilute the adverse burdens of regressive taxation. In modern politics, even more impacted by corporate and wealthy campaign contributions, where is the incentive for politicians and assessors to do the hard work of guaranteeing equitable property evaluations?

Hard fought experience made the reading of a New York Times appraisal of the continuing injustice of assessments on lower income and minority families all the more painful. It was déjà vu all over again, and painful to see how little progress had been made across the country. Citing a recent national research study, the Times reported that, “Nationwide, from 2007 to 2016, homes in the bottom 10 percent of property values in a given county were taxed, on average, at an effective rate that was twice as high as the rate for homes in the top 10 percent of property values.” In Chicago’s Cook County, researchers “…calculated that from 2011 to 2015, inequities in property assessment resulted in the improper billing of $2.2 billion in taxes.”

There are a lot of excuses, many of them I remember from ACORN’s first tax campaign. It’s expensive. It’s only mandated irregularly and takes a lot of time. Assessors can only judge by the outside and comparable sales, which may be misleading. In fact, some jurisdictions, like Houston’s Harris County, Phoenix’s Maricopa County, and others have solved this problem. Systematically reviewing building permits can determine many internal improvements. Weighing homestead exemptions more favorably for lower income neighborhoods would also make a difference. Making the appeals process more accessible would help. Using modern technology to better assess the value of location would be another.

Unfortunately, the hard nut of the problem is the same as ACORN found in one campaign after another. Assessors and politicians have to want to deliver fair and equitable assessments to everyone, not just to the few and favored, and that turns out to be the nagging problem still resisting success. They don’t care, so we pay more.


Some Good News for Low-Income Families Hoping for Homes in Cincy & Detroit

New Orleans       For lower income and working families in these days of escalating rents and no money flowing in the credit deserts, the old saying that if it “weren’t for bad news, there wouldn’t be any news at all” feels too much like an everyday story.  In Detroit and Cincinnati recently, there was some good news that should create some hope for some families trying to keep homes out of foreclosure or buy homes through installment land contracts.

The Detroit story is a hard one to get your arms around, like so many things in Detroit.  The topline is that a suit led by the ACLU reached a settlement with the City of Detroit that may allow some families to stay in their homes.  As the Detroit News summarized,

The ACLU sued the city in Wayne County Circuit Court two years ago over how it administered the state-mandated property tax break for the poor, arguing it was inaccessible to the vast majority of homeowners who were needlessly losing their homes to foreclosure.

To be clear, the city didn’t allow lower income families to get the property tax exemption approved in state law and instead tallied the delinquent property taxes for several years and then after being in arrears for more than three years, foreclosed on the houses and put them up for sale at tax auction.  Nothing pretty about that story.  It’s almost a Ripley “believe or not” tale.

The settlement forces the city to have to step up.  As the Detroit News reports:

Under the plan, a group of homes headed to this year’s fall tax auction will instead be bought by the city and sold to owner-occupants who prove they qualified for the city’s poverty tax exemption, which lowers or eliminates tax bills.

All good so far, though it gets tricky.  Families that can prove that they were wronged have to buy back the homes for $1000, which, frankly, I don’t understand at all.  The money they say is going to come from private foundations.  The whole affair is being administered by some fantastic folks the ACORN Home Savers Campaign was privileged to meet earlier in the campaign at the United Community Housing Coalition.  UCHC has already qualified about one-hundred families.  There are more than 4000 homes scheduled for the fall auction with over 2000 occupied by owners or renters, so of course there is concern that there may be more people trying to win justice under the settlement than there is money available from foundations, but fingers crossed.  This is still good news and the city can’t claim to be protecting home owners from foreclosure even while cheating them earlier so I’m sure there will be a fix if there’s a shortfall.

In Cincinnati, an ordinance was passed unanimously to assure that any house offered under an installment land contract had to first establish that it was up to code.  Given the history of how companies have operated there, this is also a good step forward.

In both cities these are steps forward and offer hope of more progress for lower income tenants, potential homeowners, and existing homeowners in the future.