ONWE ONYE
Property tax bills rose
2x more
in communities of color than White neighborhoods.
Assessment equations contribute to the observed racial and economic inequality in property tax bills.
Low-income households pay
18x more
of their income on property tax than high-income households.
Key Findings
New Research Shows Hamilton County’s Property Taxes Are Disproportionately Levied on Communities of Color and Lower-Income Neighborhoods
As widely acknowledged, the 2024 property tax bills rose at an unprecedented rate for some of Hamilton County’s residents. Yet not all residents experienced increases. In fact, one in four residents saw their property tax bills decrease.
A new study co-produced by Housing Opportunities Made Equal of Greater Cincinnati (HOME) and eruka investigates which communities were most effected by the tax changes, the reasons for the changes, and what local and state elected officials can do to create a more equitable tax system.
Dr. Junia Howell (she/her)
Director, eruka
The research finds that tax increases were disproportionately concentrated in communities of color and lower-income neighborhoods. On average, property tax bills increased by $990 (or 83 percent) in communities of color compared to $430 (8 percent) in White neighborhoods. Moreover, those who saw decreases in their tax bills were most likely to live in the county’s most expensive houses in the most affluent neighborhoods.
Unlike often presumed, the racially and economically inequitable changes in tax bills are not due to differences in real estate sales. Rather, they are due to changes in the approach used to estimate property values. Hamilton County’s auditor contracts a private company to derive an equation that determines each property’s value. This equation increased values in communities of color more than White neighborhoods.
Simultaneous to the changes in how property tax assessments are calculated, the growing disconnect between residents’ wages and real estate values is placing an increasing tax burden on residents who have the fewest resources. For example, the average Hamilton County household making less than $25,000 a year will spend 36 percent of their annual income on property taxes in 2024. Conversely, households making more than $150,000 will only spend 2 percent of their income on property taxes. Likewise, homeowners in communities of color and lower income neighborhoods also pay higher tax rates compared to the wealth they gain from owning property.
In short, people of color and lower-income households experienced higher tax hikes and carry a larger tax burden than their more affluent and White neighbors.
“The stark racial inequality in the recent tax increases is troubling,” said Elisabeth Risch, HOME of Greater Cincinnati’s Executive Director. “If we do not address these inequities, they could have devastating impacts on Cincinnati’s Black homeowners and housing affordability.”
Providing property tax relief is one of six recommendations included in HOME’s Roadmap for Increasing Black Homeownership in Hamilton County and Cincinnati. The Roadmap highlights the nearly 40 percent gap between white and Black homeownership in the Cincinnati region and calls for policy solutions to increase and preserve Black homeownership.
The new study acknowledges that state law constrains local leaders’ ability to immediately alter property tax assessments or redistribute tax bills. Yet, it also highlights what local elected officials and community leaders can do to reduce tax inequity. Potential action steps include: increasing enrollment in the Homestead exemption and Owner Occupancy programs through targeted outreach, expanding which properties are protected from tax lien sales, replacing property tax levies with more equitable revenue sources, and working alongside state representatives to allow the county to use new assessment approaches.
“Nearly every local and state legislative body and agency plays some role in property tax bills,” said Dr. Junia Howell, lead author of the study and Director of eruka. “This makes for a very complicated and confusing process. Yet, it also means, everyone has a part to play in ensuring a solution.”
Policy Recommendations
Raise Threshold for Protecting Properties from Lien Sales.
The Treasurer currently does not send owner-occupied properties whose market value is $75,000 or less to lien sales. To continue this protection after the assessment increases, this threshold should be increased to $150,000.
Increase Homestead and Owner-Occupied Enrollments.
Proactively reach out to households via mailers, canvassing, and service organizations with enrollment instructions. Additionally, develop a private-public partnership to update and streamline the application process.
Ensure Aid is Disseminated Swiftly and Strategically.
Allocated aid needs to be distributed. Ideally, racially and economically marginalized households with large tax increases should be prioritized. The $12.8 million generated from the tax roll back could be used to increase aid.
