4 ms·

There is a neighborhood in my area that uses insanely high taxes to redline itself. $325k house in my metro area generally carries a tax of $4500 per year. The

There is a neighborhood in my area that uses insanely high taxes to redline itself. $325k house in my metro area generally carries a tax of $4500 per year. The "redline district," we'll call it, charges $11k per year for the same valuation. That is $930 a month in real estate tax. A desirable neighborhood firmly surrounded by minority communities. The message is clear.

kjjjjjjjjjjjjjj 6y ago
Does that neighborhood also have better schools, police, and fire department? Are you absolutely sure its redlining or are you just assuming that?
- kjjjjjjjjjjjjjj 6y ago
  Adding to this: similar thing seemingly happens in my town. Our taxes are higher than surrounding towns and of course the people are richer and "nicer". Except take 5 minutes to dig into the metrics and you see how much our police are paid (and it shows in their behavior and how much they care), the schools are better, the services and commercial spaces are better, etc.
qzw 6y ago
That seems like a terribly inefficient way of achieving exclusivity, if that’s the goal. If the neighborhood is indeed more desirable, wouldn’t the higher value of the houses themselves (which would also result in higher prop taxes anyway) serve the same function? In fact, the artificially high property tax must have a depressive effect on the house values in that neighborhood. I can’t think of why relatively well off people would voluntarily move into such a neighborhood. If anything, the high tax rate sounds punitive toward those who live there.
- deleted 6y ago
  [deleted]
- Dracophoenix 6y ago
  >>That seems like a terribly inefficient way of achieving exclusivity, if that’s the goal. It's not a goal, it's a secondary consequence that happens often enough to be commented upon. >>If the neighborhood is indeed more desirable, wouldn’t the higher value of the houses themselves (which would also result in higher prop taxes anyway) serve the same function? Yes and no. Some people can save enough money to purchase a house from a middle class job or making it big in short-term/seasonal high-risk, high-reward activities (e.g. professional gambling, oil drilling, undersea welding, etc.) if there is only a large (but not untenable) one-time cost. However a property tax is a subscription fee on the basis of an invented metric that is as elastic as what the tax assessor can get away with. Paying thousands of dollars every year for the "privilege" of living in your own property would make doing the kinds of jobs that were adequate for purchaser, insufficient or unsustainable for a resident. The result, at best, is being house rich and cash poor. >>In fact, the artificially high property tax must have a depressive effect on the house values in that neighborhood. Sometimes they do, sometimes they don't. High property taxes can be seen as a form of economic signaling in areas like Manhattan or Beverly Hills. They can also be a result of local politics run amok. The former creates self-sustaining bubbles that will take a long time to (but will eventually) burst. The second will cause residential flight to lower cost areas as is currently happening with San Franciscans moving to Austin at first sight of a downturn. >>I can’t think of why relatively well off people would voluntarily move into such a neighborhood. If anything, the high tax rate sounds punitive toward those who live there. It's not that people want to move to higher property tax areas because they want higher taxes. These areas tend to be much safer and family-friendly, have better schools and amenities, are (in some cases) closer to one's workplace, and look aesthetically pleasing. A property tax, just like purchase price, is one factor in the equation of "is it worth it?". It's just not the factor, punitiveness notwithstanding.
  - qzw 6y ago
    I agree with most of what you say in a general sense, but the OP seemed to believe that the high tax rate for the neighborhood in question was a deliberate strategy employed by the residents themselves, presumably in order to stand out from surrounding neighborhoods. I found that specific scenario hard to comprehend. But until we get more details from the OP, which isn’t likely, we can only guess at the actual cause of the unusual tax situation.
poochdog 6y ago
Are you saying the minority communities are undesirable? The message is clear. Alternatively why don't they improve their community?
doktorhladnjak 6y ago
In some exclusive, expensive cities around Seattle like Medina, Clyde Hill, Hunt's Point you see the opposite. Tax rates are much lower because against the higher property values the cities are able to collect enough to pay for services. There are some weird downsides though. Some of these cities don't have their own libraries and don't pay into the county library system, so their residents can't checkout books for any library. I guess they can afford to just buy any book they need.

kjjjjjjjjjjjjjj 6y ago

Does that neighborhood also have better schools, police, and fire department? Are you absolutely sure its redlining or are you just assuming that?

kjjjjjjjjjjjjjj 6y ago
Adding to this: similar thing seemingly happens in my town. Our taxes are higher than surrounding towns and of course the people are richer and "nicer". Except take 5 minutes to dig into the metrics and you see how much our police are paid (and it shows in their behavior and how much they care), the schools are better, the services and commercial spaces are better, etc.

qzw 6y ago

That seems like a terribly inefficient way of achieving exclusivity, if that’s the goal. If the neighborhood is indeed more desirable, wouldn’t the higher value of the houses themselves (which would also result in higher prop taxes anyway) serve the same function? In fact, the artificially high property tax must have a depressive effect on the house values in that neighborhood. I can’t think of why relatively well off people would voluntarily move into such a neighborhood. If anything, the high tax rate sounds punitive toward those who live there.

deleted 6y ago
[deleted]
Dracophoenix 6y ago
>>That seems like a terribly inefficient way of achieving exclusivity, if that’s the goal. It's not a goal, it's a secondary consequence that happens often enough to be commented upon. >>If the neighborhood is indeed more desirable, wouldn’t the higher value of the houses themselves (which would also result in higher prop taxes anyway) serve the same function? Yes and no. Some people can save enough money to purchase a house from a middle class job or making it big in short-term/seasonal high-risk, high-reward activities (e.g. professional gambling, oil drilling, undersea welding, etc.) if there is only a large (but not untenable) one-time cost. However a property tax is a subscription fee on the basis of an invented metric that is as elastic as what the tax assessor can get away with. Paying thousands of dollars every year for the "privilege" of living in your own property would make doing the kinds of jobs that were adequate for purchaser, insufficient or unsustainable for a resident. The result, at best, is being house rich and cash poor. >>In fact, the artificially high property tax must have a depressive effect on the house values in that neighborhood. Sometimes they do, sometimes they don't. High property taxes can be seen as a form of economic signaling in areas like Manhattan or Beverly Hills. They can also be a result of local politics run amok. The former creates self-sustaining bubbles that will take a long time to (but will eventually) burst. The second will cause residential flight to lower cost areas as is currently happening with San Franciscans moving to Austin at first sight of a downturn. >>I can’t think of why relatively well off people would voluntarily move into such a neighborhood. If anything, the high tax rate sounds punitive toward those who live there. It's not that people want to move to higher property tax areas because they want higher taxes. These areas tend to be much safer and family-friendly, have better schools and amenities, are (in some cases) closer to one's workplace, and look aesthetically pleasing. A property tax, just like purchase price, is one factor in the equation of "is it worth it?". It's just not the factor, punitiveness notwithstanding.
- qzw 6y ago
  I agree with most of what you say in a general sense, but the OP seemed to believe that the high tax rate for the neighborhood in question was a deliberate strategy employed by the residents themselves, presumably in order to stand out from surrounding neighborhoods. I found that specific scenario hard to comprehend. But until we get more details from the OP, which isn’t likely, we can only guess at the actual cause of the unusual tax situation.

poochdog 6y ago

Are you saying the minority communities are undesirable? The message is clear. Alternatively why don't they improve their community?

doktorhladnjak 6y ago

In some exclusive, expensive cities around Seattle like Medina, Clyde Hill, Hunt's Point you see the opposite. Tax rates are much lower because against the higher property values the cities are able to collect enough to pay for services. There are some weird downsides though. Some of these cities don't have their own libraries and don't pay into the county library system, so their residents can't checkout books for any library. I guess they can afford to just buy any book they need.