Opinion | How Lower-Income Americans Get Cheated on Property Taxes
Some reasons are fairly easy to identify, like the boundaries of school districts. Others, like proximity to a particular house of worship, may be harder to discern. But assessors don’t need to figure out these details. Statistical techniques are readily available to account for variations without inquiring into causes.
Daniel McMillen, a professor at the University of Illinois, Chicago, who has reviewed the recent studies, said that the geographical pattern of the errors indicates that many assessors simply aren’t trying very hard to deliver accurate numbers. Mr. Berry estimates that statistical best practices could reduce the inequities by roughly one-third.
Assessors face a more difficult task in accounting for differences inside homes. Robert Ross, a data scientist who has led an effort to improve Cook County’s assessments, said the county has made significant progress in accounting for location, but still struggles to assess homes in the bottom 30 percent of property values. Using the available data, the county can’t reliably distinguish between a home that will sell for $100,000 and a home that will sell for $150,000. The relevant differences, like new kitchens and old roofs, are often invisible from the street.
Mortgage lenders, whose profits depend on accurate assessments, rely on appraisals that include internal inspections. But emulating that practice would require the consent of the homeowners, and even then it would be dauntingly expensive and politically unpopular.
Fortunately, there are other ways to make progress. Assessors can incorporate data from building permits and real-estate listings. They can make it easier for property owners to submit relevant information. They can seek patterns in the data.
Homestead exemptions, which shelter a portion of the assessed value of a primary residence from taxation, can help to offset the systemic overvaluation of low-end properties. Many homeowners, particularly in lower-income communities, do not claim those exemptions. Local governments can encourage use of the exemptions, or apply them automatically.
Local governments also need to reconsider the process that allows homeowners to appeal assessments. That system is meant to rectify inequities, but it often widens them.
