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Study: Black, Hispanic Homeowners Pay Higher Property Taxes

A study by Indiana University and the University of California-Berkley found black and Hispanic homeowners pay 10%-13% more than white ones in the same tax jurisdiction.

LOS ANGELES – According to a joint study by Indiana University and the University of California-Berkley, black and Hispanic homeowners pay 10% to 13% more than white homeowners in the same tax jurisdiction.

Based on panel data for 118 million homes and geolocation data for 75,000 taxing entities, researchers Carlos Avenancio-León and Troup Howard found the tax burden stemmed from disparities in property assessment and tax appeals protocols. Avenancio-León and Howard said assessments “are insufficiently sensitive to neighborhood-level attributes,” and because of the lingering effects of state-sanctioned housing segregation, “minority residents face, on average, different neighborhood characteristics than white residents.”

The result is a higher property tax bill for black and Hispanic homeowners, with black homeowners shelling out 12.9% more per year than white homeowners in the same tax jurisdiction. At the median, researchers explained, this assessment gap results in a black homeowner paying approximately $390 dollars more each year.  For black or Hispanic residents in aggregate, the average assessment gap is 9.8%, the study found.

The average assessment gap translates to an additional $300 to $390 in property taxes for the median minority homeowner. However, the tax burden can quickly balloon for minority homeowners who live in tax jurisdictions with bigger assessment gaps.

Vermont, Oregon, Indiana and Kansas were the only states that didn’t over-assess black and Hispanic homeowners, while Illinois, Missouri and Ohio had the largest overassessment gaps.

Avenancio-León and Howard say that linking assessment growth to ZIP-code-level indices could reduce racial inequality by 55% to 70%.

Source: Inman (07/06/20) McPherson, Marian

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