The Past and Future of the Urban Property Tax

For U.S. cities, the property tax is the single largest source of own-source revenue, but the extent to which different cities rely on property tax revenues varies significantly. Grant Driessen and Steven Sheffrin provide a comprehensive review of the literature on the magnitude and share of property tax revenues across large cities in the United States.

The authors examine municipal property tax revenues both in the context of the housing crisis and Great Recession—which struck a big blow to the fiscal health of cities across the nation—and in the context of various legislative limitations imposed on both property tax rates and assessments. These two challenges have increased pressure on municipalities either to rethink their property tax policies or to seek alternative sources of revenue. Sheffrin and Driessen explore the limited potential for increasing municipal property tax revenues in an era of mounting revenue needs and limits imposed by tax revolt.

This paper was presented at the Lincoln Institute’s annual Land Policy Conference in 2014 and is Chapter 5 of the book Land and the City.