Houses, apartments, and the incidence of property taxes

Property Taxes and Residential Rents

“…Sexton (2003) andBaer (2003) provide excellent summaries of the property tax relief programs available in each state.7 Recent work byGoodman (2006) using newly available data from the 2001 Residential Finance Survey suggests that effective property tax rates vary by property type (owneroccupied, single-family units versus multiplexes) and property value (low, medium and high). Although a clear pattern does not emerge, Goodman finds that the effective tax rate on apartments differs from that on houses for both low-and high-valued properties.…”

Competitive Cities and Climate Change

“…Multifamily rental housing in the United States, for example, bears an effective tax rate (tax divided by property value) that is considerably higher than the rate for single-family owner-occupied housing: at least 18% in 2001 (Goodman, 2006). The higher tax rate for apartments observed in the national totals holds for 10 of the 12 states that are identified in the Residential Finance Survey data.…”

Property Tax Limitation and Racial Inequality in Effective Tax Rates

“…Although property tax limitations are facially neutral with respect to race, their effects may be unequal in practice because the property tax itself is unequal. Black and Latino homeowners generally pay higher effective property tax rates than white homeowners (Goodman, 2006; Listokin et al, 2006). This inequality does not arise directly from discrimination in the setting of the tax rate: local officials today generally do not have the discretion to apply different nominal property tax rates to different owners.…”

“…Second, owners of expensive real estate may be especially likely to appeal the official valuation of their property, or especially likely to prevail in such appeals. Third, owners of especially valuable property tend to live in the same local jurisdictions; and given any two local jurisdictions, the one that contains the more valuable real estate will be able raise the same amount of revenue with a lower rate of tax (see Goodman, 2006: 16). In the context of a racially segregated housing market, any one of these mechanisms might be sufficient to produce racial inequality in effective property tax rates.…”