In yesterday’s post about a proposal in Philadelphia to mandate adherence to certain “visitability” standards in new residential construction, but only for multifamily units, I asked if anyone knew of any other burdens that are heaped unfairly on apartment-dwellers. Regular commenter Alon Levy rose to the task, and pointed to a huge one: property taxes. He linked to this great explanation of New York City’s arcade property tax regime that favors outer-borough owner-occupied properties over apartment and condo dwellers, but after just a little bit of digging I found that these property tax differentials are in no way unique to NYC. Here’s (most of) the abstract to a 2006 paper published in the journal Housing Policy Debate (.pdf):
The study finds that for the nation as a whole, multifamily rental housing bears an effective tax rate (tax divided by property value) that is at least 18 percent higher than the rate on single-family owner-occupied housing. This gap appears to have arisen during the 1990s. The level of taxation and the apartment/house differential vary considerably by location. Much—but not all—of the differential is associated with the fact that apartments have a lower average property value per unit than houses. The residential property tax, as implemented, promotes low-density development, disproportionately burdens lower-value properties, and may impose higher taxes on apartment residents than on homeowners with identical incomes.
This is on top of the fact that the vast majority of property taxes in the US are used to fund local roads and schools (right?), which apartment-dwellers surely make lesser use of. So even if the taxes were levied across the board, they’d still be redistributing wealth from poorer apartment dwellers to richer homeowners.
I should also emphasize that these are local property taxes, and are completely separate from the mortgage interest deduction that homeowners can also use to lower their federal tax burdens. We hear a lot about that one, but this is the first time that I’m hearing about property tax differentials. I’m guessing the reason for this is that national journalists find it much easier to cover federal issues that apply nationwide, but this this is a shame, because although local issues are more heterogenous and difficult to research, I think they’re ultimately more important than federal ones when it comes to land use and transportation. I’d like to say that the urbanism blogosphere is immune to this pro-federal bias, but unfortunately I don’t think that’s the case.
So again, thanks to Alon Levy for pointing this out, and for his steady stream of insightful comments. Every so often I fear that I’ll soon uncover every possible tool that governments use to favor suburbs over cities and run out of things to blog about, but then I snap out of it and remember that the possibilities are truly endless.