Taxed “Beyond Sanity”—And Not Getting the Services Promised
For almost 30 years, Asheville, North Carolina, tore apart its Black communities in the name of urban renewal. In the Southside neighborhood, 4,000 Black residents were displaced—half of the city’s Black community at the time—according to recent research. The city and housing authority acquired $6.4 million of property, almost none of which ultimately returned to the hands of longtime Southside residents. Freeway construction beginning in 1957 disrupted a swath of historically Black neighborhoods, as well.
In 2020, nearly 60 years later, Asheville received national recognition for its steps toward repairing the damage caused by decades of public and private racism. The reparations program approved by the city council promised to provide funding to support Black homeownership and entrepreneurship. However, as the city bolsters its reparations rhetoric with promises of making up for its past mistakes, it glosses over one significant and ongoing disparity: less-wealthy homeowners (who are disproportionately Black) are overpaying on their property taxes, while the richest homeowners in Asheville, on average, underpay. And this pattern of unequal assessment is not matched by where the city spends tax dollars, according to one longtime Black resident.
“If you live in the corporate city limits of Asheville, you're paying your taxes and we're getting taxed beyond reality—beyond sanity, today,” said Lawrence Gilliam, Vietnam veteran and Southside resident of Asheville for about 50 years. “And yet in certain neighborhoods, and mine happens to be one of them, we do not get a lot of the services that more prominent neighborhoods have, such as getting the streets repaved.”
The purpose of the property tax system is to collect sufficient funds to provide public services for city residents. In North Carolina, by law, a property’s assessed value should be equivalent to market value—in other words, property owners should be paying taxes on the full value that the property could fetch if sold on the open market. But in Asheville, the city loses out on billions of taxable dollars a year because of a flawed system that underassess expensive homes. And on average, low-valued homes are assessed at a rate 1.4 times higher than the expensive homes, according to research done by geoanalytics firm Urban3 and the Just Accounting for Health consortium.
“There’s a true connection to urban renewal, reparations, the tax appraisal system, and just property taxes, in general,” said Erin Barksdale, outreach and engagement director with Asheville Racial Justice Coalition. Inequities that disproportionately affect the Black community have been a continuous theme in Asheville. Urban renewal displaced thousands of families from their homes, destroyed thriving historic communities, and widened the racial wealth gap. Now, the property tax system places a heavy burden on those least able to withstand it.
“It's frustrating to pay taxes and not get the same benefits as other homeowners in the city,” said Gilliam.
Lawrence Gilliam, Vietnam veteran and Southside resident of Asheville for about 50 years. (Source: Asheville Racial Justice Coalition/Sparrow.)
In contrast to the city’s high-profile reparations efforts, which have been slow to take concrete shape, the inequities of the property tax system have been brushed under the rug. In 2021, a local ad hoc committee was formed on charges of inequitable property taxes. While the committee ended with a handful of different recommendations, such as increasing community education and outreach, none of their resolutions fully addressed the inequity issues of the property tax system. The committee loudly and openly opposed research from the international data analytics firm Urban3, and oversimplified the issues in such a way as to minimize them.
This, along with the reparations committee being slow to take significant action, has locals like Gilliam questioning the true intentions of their local government.
“It seems to be all talk,” said Gilliam. “No action. And I recognize that you got to have a plan [for reparations] and that should be viable and well thought out before you try implementing anything. Maybe they’re just not there yet.”
Asheville has a long history of false promises. In the 1950s, when urban renewal began, property tax paying citizens were displaced from their homes under eminent domain—which is the power of the government to take private property and convert it into public use. Highways replaced thriving neighborhoods, and real estate developers took claim to homes sold by the city at rock-bottom prices. When residents were first displaced from their homes during the urban renewal process, they were promised opportunities to rebuild for a cheaper rate. But that never happened. Many people had no other option but to stay in public housing, while others purchased less expensive homes throughout the city.
Gilliam showing a photo of Biltmore Ave, near Eagle Street, a neighborhood that has gone under gentrification and urban renewal.(Source: Asheville Racial Justice Coalition/Sparrow.)
“When there's an opportunity to potentially bring justice to a specific system, or bring equity to a specific institution, people are hesitant,” said Barksdale. “And if I'm being totally honest, I wouldn't even say that I blame the local politicians or people in office. I think, honestly, everyone is scared.”
Making changes to a centuries-old system is not an easy task. But tax disparities are one specific source of financial burden on Asheville’s poorest communities. “A lot of people are affected by property tax,” said Barksdale. “When you're living paycheck to paycheck, and you have a home, that 75 or 100 extra dollars makes a difference when property taxes come up.” A flawed property tax assessment thus contributes to issues with housing affordability and displacement, and it affects the individual wellbeing of homeowners.
“We don't know the way in which someone got their home, you know,” said Barksdale. “Maybe they inherited their house, and now they're paying property tax. That doesn't necessarily mean that they could have bought their house based on their own credit and their own income.”
The weight of a property tax bill is felt throughout the year as homeowners create budgets for their families; plan for future retirement; and use property-tax-funded services such as roads, storm drainage, and water resources.
In an anonymous North Carolina Buncombe County reappraisal community survey, many residents shared their experience with the property tax system. One resident told how they may lose their inherited multi-unit rental property his family lives in because of rising property taxes: “Every year our taxes increase along with the cost of living. … So we are left with the option of either increasing rents on longtime tenants, which would become a hardship on them, or just absorbing the cost increases, which we have been doing. Our last option is to just sell the property. We live on the property and it has been in my wife's family for many years and she is very sentimental and does not wish to sell.”
Feedback from other anonymous survey respondents included the following comments:
“Our property taxes have roughly tripled since we bought this home in 2008. I would like to know how that is justified. We still don't have sidewalks or storm drainage on our street and those would be the bare minimum services we expect.”
“My value went up over 40% this time. There have been no improvements to the home since the last appraisal.”
“I understand that values and taxes will go up, but this drastic of an increase in one year is crazy and very hard to adjust our finances around.”
“I have lived in and cared for my home for 22 years during which time my property taxes have tripled. I'm nearing retirement age and am concerned about taxes further increasing to the point where I may not be able to afford to live in my home as long as I would like to.”
Property tax inequities are not present in just Asheville—the entire nation is burdened with a similar “assessment gap.” Dr. Christopher Berry, professor of public policy and municipal finance from the University of Chicago, performed an extensive analysis detailing the inequalities in the property tax assessment system. He discovered that the majority of local governments are failing at their job of accurately assessing property values: lower-priced homes are being assessed at a higher value relative to their actual sale price, and higher-priced homes are being assessed at a lower value.
“The property tax system should be fair for everyone,” said Barksdale. “It shouldn't be this thing that sometimes is inaccurate and negatively affects an already disenfranchised group of people.”
The Just Accounting for Health coalition (JAfH), based in Western North Carolina, is one advocacy group of many that is fighting to make a property tax system that is fair, transparent, and good for the health and wealth of everyone.
Thanks to Options Real Estate for sponsoring the upcoming Strong Towns National Gathering. Learn more about Options Real Estate at optionsre.com.
On this episode of the Strong Towns Podcast, Chuck answers housing questions submitted by Ohio State University students, covering topics from the history of the housing market to financing housing development.