Our focus on the new edited volume, Shaped by the State: Toward a New Political History of the Twentieth Century continues as we discuss race and property tax assessments with University of Virginia historian, Andrew Kahrl who contributed the essay, “The Short Ends of Both Sticks: Property Assessments and Black Taxpayer Disadvantage in Urban America.” You can see The Metropole’s overview of Shaped by the State here. 

In 2017, housing expert Richard Rothstein published The Color of Law: A Forgotten History of How Our Government Segregated America. Whatever one thinks of the title – historians haven’t “forgotten” that the government segregated America, they’ve spent the last four decades revealing it – Rothstein deftly synthesizes decades of scholarship on housing, economic development, and school segregation, demonstrating the ways the government pulled multiple levers to ensure that black homeowners and communities remained secondary to their white counterparts.

This government project united American political leaders across ideological lines. “Racial segregation in housing was not merely a project of southerners in the former slaveholding Confederacy,” Rothstein writes. “It was a nationwide project of the federal government in the twentieth century, designed and implemented by its most liberal leaders.” It took a constellation of laws, policies, and regulations to establish and maintain: the apotheosis of deliberateness across ideology.[1] This is a position with which the editors and contributors to the edited volume Shaped by the State would largely agree. “Jim Crow was liberalism,” writes Nathan D.B. Connolly in his essay for the collection. “We would do well to consider fundamental elements in liberalism, writ long and writ large: the primacy of private clubs, property ownership, extralegal violence, and state sponsored segregation.” Call it classical liberalism, growth liberalism, civil rights liberalism, or neoliberalism, but they are all supported by the same unequal structure.[2]

As evidenced by Rothstein’s bibliography, he drew upon a wealth of scholarship in his research. Yet, even as historians, sociologists, and others have devoted millions of hours and pages to the issue of segregation, at least one area remains understudied: the history of property tax assessments. “African Americans could save less from their wages because in some (perhaps many) cities, discriminatory property assessments left them with less disposable income than white’s with similar earnings,” notes Rothstein. Excessive property tax assessments carry with them harsh compounding effects: an inability to reinvest in homes for renovation or upkeep, greater vulnerability to tax delinquency and liens, and a general muzzle on black wealth. Despite such pervasive consequences, “no contemporary studies of assessed-to-market value ratios by community and race [exist],” observes Rothstein, “so we cannot say whether discriminatory tax assessments persist to the present time, and if so, in which communities.” [3]

Enter University of Virginia historian Andrew Kahrl, whose contribution to Shaped by the State explores the issue of property tax assessments mostly in Black Chicago, but also their impact in Gary (Indiana), Atlanta, New York, and Detroit—and in doing so begins to address the very blind spot that Rothstein laments. Undoubtedly, in the post World War II U.S., federal, state, and municipal housing and school policies institutionalized segregation on the American landscape, and the assessment process no less so: “biased assessments played an instrumental role in the uneven development of American cities from the 1950s through the 1970s … [and] helped build and populate” suburbia, notes Kahrl.[4]

Part of a larger project on the effects of property tax assessments in Chicago, in his article for Shaped by the State Kahrl draws upon several of the municipal reports cited by Rothstein, as well as scholarship by historians and sociologists—particularly Isaac Martin and his 2008 work The Permanent Tax Revolt: How Property Tax Transformed American Politics—and several Chicago archives including Special Collections at the University of Illinois Chicago, the Chicago History Museum Research Center, the Center for Economic and Policy Analysis, and Harold Washington Archives and Collections.

Kahrl’s first book The Land was Ours explored the history of African American landownership and leisure industry in the coastal Southeast. While conducting research for the book, he discovered a peculiar consistency: assessments persistently increased on black businesses and homes when they competed or interfered with the economic interests of white investors and entrepreneurs. What appeared on its face to be an impartial instrument of measurement, a “supposed tool of observation,” morphed into an state implement “prone to manipulation [and] weaponized … against African American homeowners [and] black owned and operated enterprises,” Kahrl told The Metropole in a recent phone interview.[5]  

Kahrl discovered clues in the black press, where anecdotal evidence abounded—particularly in how often such publications “made references to discriminatory” taxes. Following breadcrumbs dropped by black journalists led him to legal records and tax rolls, where he found a veritable “hidden archive in plain sight” that clearly documented structural bias in property taxes. Moreover, discriminatory assessments not only served as a means to observe the impact and consequences of segregation, they drove it; excessive property taxes deprived black homeowners and communities of resources and wealth thereby putting black property owners at greater risk of tax delinquency, foreclosure, and loss.[6]

How do property taxes and assessments work? First, county tax assessors, often acting as elected officials, appraise the value of a home and then multiply that value by a tax rate set by various municipal government agencies, such as the fire department, police department, schools, and so forth. The total tax rate results from the sum of these rates.[7] While these taxes affect homeowners most directly, tenants often pay higher rents when landlords raise them to make up for property tax increases.

Assessments were as much political decisions as economic ones; assessors used them to curry political favor. “When it comes to property taxes, who you are has often been just as important as what you own in determining what you pay,” Kahrl pointed out, which meant black communities marginalized from the political process carried a heavier tax burden than their white counterparts. For example, during the 1960s and 1970s, Bridgeport, the home of Chicago Mayor Richard J. Daley and the “nucleus of the local Democratic Party Machine,” had one of the lowest assessment rates in the city, while comparable black communities often paid three times as much in property taxes. Even a heavily biased municipal report on the subject from the 1980s, produced in the interest of the municipal government, acknowledged that more than 40 percent of black communities endured “assessment regressivity.”[8]

 

Ironically, black homeowners have been an oft ignored actor in metropolitan history despite playing a central role, yet Kahrl reveals one of Shaped by the State’s larger points by focusing on their battles: the larger system of American governance rests on inequalities, often racial, and that when neoliberal policies took hold over this structure, it reified them. In the face of deindustrialization, cities handed out reduced assessments to corporations and industries, which in turn encouraged competition between metropolitan regions to hand out the best underassessment. A race to the bottom ensued. “Many of the features of urban governance that critics today describe as neoliberal are rooted in the administrative practices and prerogatives of the Jim Crow state,” writes Kahrl, which “then bloomed during the apex of postwar liberalism – a period and a politics often framed as the counterpoint to our neoliberal present – serving as instruments of racial segregation, white middle class homeowner advantage, and corporate capital accumulation.”[9]

During the 1960s and 1970s, the white homeowner identity (which at least rhetorically embodied the great Silent Majority) wielded its political power deftly uniting across ideological lines and lobbying to maintain a system based on racial inequality in colorblind language of property rights, free markets and individualism. African American property holders did not receive the same hearing from government officials or the broader public.

During the 1970s, Illinois State Senator and future mayor Harold Washington organized black homeowners in protest over the disproportionate tax burden shouldered by African American communities. Chicago officials greeted them with indifference. Municipal leaders labeled the “black tax” a myth; the newly elected County Assessor Thomas Hynes responded to the protest with a “a message tailored to appeal to white suburban voters,” Kahrl writes, “many of whom viewed urban minorities strictly as tax recipients (not taxpayers), scoffed at claims of institutional racism (especially those issued by outspoken black politicians), and equated progressive tax reform with tax hikes and increased aid for the ‘undeserving poor.’”[10]

Part of what made the assessment issue so controversial was that it coincided with deindustrialization, white backlash to school integration, and distrust in government (notably due to the Watergate scandal). Municipalities struggled to keep white homeowners, businesses, and industries within city limits, thus gearing much of their public and taxation policies toward these entities. To compete, cities adopted neoliberal politics “characterized by tax breaks, concessions, and non-enforcement for corporations and developers as well as a benefits-received principle, in which levels of services correspond with individuals’ tax contributions for everyone else.” In order to make up for declining city coffers, municipalities adopted new “revenue collection schemes” to make up for loss while ignoring rampant “corporate tax avoidance.” In particular, many of these new revenue schemes targeted middle- and working-class communities of color.[11]

The opaque nature of assessments masks their pernicious effects. Often, the assessed value of a home used by officials falls well short of market value, giving a homeowner the idea that he or she is “getting a deal.” Arcane rules and a complicated bureaucracy make appealing assessments a complex process beyond the means of many low-income residents, Kahrl asserted in his interview. Along with the selective nature of the actual assessments and with the use of fractional assessments, the system is “designed to shield the Assessor’s Office from public scrutiny,” he noted. A recent 2018 report by the Illinois Policy Institute came to a similar, simple conclusion: “a needlessly complex appraisal system often resulting in unfair or inaccurate property assessments.”

For black families, be they renters or homeowners, this assessment process—in conjunction with housing segregation—highlighted the limits placed on their economic and social mobility. Lending discrimination and a panoply of exclusionary practices meant black homeowners lacked the mobility of their white counterparts, Kahrl pointed out, making them targeted, captive communities who are more vulnerable to these sorts of tax regimes. The ability of middle-class whites to decamp for rival cities or surrounding suburbs meant that government policies would be aimed at retaining them, since their African American counterparts lacked similar options. Tax expert Diane Paul summarized the system simply and darkly: “If [the] goal [of the assessor] is to maximize revenue, then discrimination against blacks … is rational.”[12]

Due to these complexities, tax reform, though necessary, came at the expense of white homeowners who benefitted from the larger racially biased infrastructure of housing markets. Federal and state policies naturalized the benefits white owners accrued at the expense of their minority counterparts, which meant property tax reforms would impact middle- and working-class white homeowners.

In Illinois, following post-1967 reforms, homes in largely white “appreciating markets” received property tax bills two to three times larger than the previous year.[13] Future-Mayor Harold Washington, who led Chicago’s black homeowners in protest – even uniting the historically divided political leadership of the city’s black communities on the south and west side – directly acknowledged this reality. “All you’re saying is that you’ve been unjustly enriched with our money, and you don’t want to put it back … In plain simple English[,] if your taxes are lower, because mine are higher, then you [have been] unjustly enriched. I don’t expect you to give it up willingly, no I expect you to go kicking, screaming and yelling, into the twentieth century, but you’re going there one way or another.”[14]

Some critics might suggest that grounding a study of government malfeasance and exploitation in a city renowned for segregation, graft, and political corruption serves to highlight the exception rather than the rule. Kahrl disagrees. Chicago boasts a “thriving industry of predatory tax buyers … a whole class of investors who buy tax liens on property, and not coincidentally often in overtaxed neighborhoods that end up over-represented on tax rolls.” Illinois law allows for third-party sales of tax liens, creating a large market for the sale of debt; all aspects of the American economy that one sees replicated at the national level. Frequently, homes sold at tax sales were homes victimized by over-assessments, Kahrl contends.

If anything, the city’s history of corruption encourages awareness and activism. Chicago citizens might be cynical but they are very “observant to these discrepancies,” placing offices like the Cook County Assessor’s under greater scrutiny then elsewhere. “In many ways, Chicago might just be a more visible manifestation of the issue that ails” so many black, brown, and gradually, but increasingly, some white communities.[15]

The value of Kahrl’s study, and really the larger Shaped by the State volume, lies in its ability to use the various examples marshaled by Kahrl and others to demonstrate the “lived experience of the neoliberal present.” Agreeing with fellow contributor Nathan D.B. Connolly, Kahrl emphasizes that, under segregation, black Americans have long lived the austere neoliberal reality.[16] For Kahrl, African American history, particularly in regard to cities, operates as “the canary in the coal mine”; “conditions in black America alert us to the structural problems” that will eventually afflict all of us. The exploitation of property taxes illustrate the long-term effects of tax cuts at the top that fail to trickle down, leaving the most vulnerable populations to be ravaged by exploitative practices. As a result, governments have to cut services to their communities—casting aside the public to chase capital. Starved of revenue due to decades of tax cuts and subsidies for the wealthy, politically connected, and industry, cities increasingly depended on the over taxation of minority communities and regressive forms of taxation. Ferguson Missouri’s police department, as evidenced by a 2015 Department of Justice report, extracted revenue from its black population through tickets and fees levied at will. Such taxation policies are regrettably common.

“We need to look beyond politics and focus on the policies of the administrative state,” Kahrl asserts.[17] Indeed, one way or another, we all pay property taxes, and the reality is that we are all being taken. Understanding this commonality and focusing on the overarching structures that exploit us, rather than the less pervasive “politics” that divide us, will yield a more promising understanding of the past and the present. All politics is local, as Tip O’Neill once opined, but maybe not quite the way he meant it.

Featured image (at top): Harold Washington on the campaign trail during the 1983 Chicago Mayoral Election. 

[1] Richard Rothstein, The Color of Law: A Forgotten History of How Our Government Segregated America, (NY: Liveright Publishing, 2017), xii.

[2] Nathan D.B. Connolly, “The Strange Career of American Liberalism,” in Shaped by the State, Eds. Brent Cebul, Lily Geismer, and Mason B. Williams, (Chicago: University of Chicago Press, 2019), 64-65.

[3] Rothstein, The Color of Law, 169-172.

[4] Andrew Kahrl, “The Short End of Both Sticks: Property Assessments and Black Taxpayer Disadvantage in Urban America,” in Shaped by the State, Eds. Brent Cebul, Lily Geismer, and Mason B. Williams, (Chicago: University of Chicago Press, 2019), 191-192.

[5] Andrew Kahrl, interview with author, May 6, 2019.

[6] Andrew Kahrl, interview with author, May 6, 2019

[7] Rothstein, The Color of Law, 169.

[8] Kahrl, “The Short End of Both Sticks,” 208, 201; Andrew Kahrl, interview with the author, May 6, 2019.

[9] Kahrl, “The Short End of Both Sticks,” 192.

[10] Andrew Kahrl, “The Short Ends of Both Sticks,” 204.

[11] Andrew Kahrl, “The Short Ends of Both Sticks,” 206-207; Andrew Kahrl, interview with the author, May 6, 2019.

[12] Andrew Kahrl, “The Short Ends of Both Sticks,” 197.

[13] Andrew Kahrl, “The Short Ends of Both Sticks,” 206.

[14] Andrew Kahrl, “The Short Ends of Both Sticks,” 205.

[15] Andrew Kahrl, interview with the author, May 6, 2019.

[16] Nathan D.B. Connolly, “The Strange Career of American Liberalism,” in Shaped by the State, Eds. Brent Cebul, Lily Geismer, and Mason B. Williams, (Chicago: University of Chicago Press, 2019), 62-95.

[17] Andrew Kahrl, interview with the author, May 6, 2019.