The Property Tax and Housing*

Abstract

PRIOR TO THE ENTRY of the United States into the first World War, there had been-so far as I am aware-no proposals that the government should erect housing for able-bodied private citizens. In other words, selffinancing individuals and corporations had managed to provide during almost three centuries housing sufficient to accommodate a population with an abnormally rapid rate of increase. The increase was due not only to a high birth rate, but also to an immigration which in volume and long duration was unprecedented in modern history. This is all the more remarkable because, at the height of the immigration movement, the immigrants included large numbers drawn from the underprivileged and the impoverished from many nations. During this period, New York was the port at which most of the newcomers landed, and the city in which many of them settled. The real estate tax as we know it, of course, is a variant of the local tax system which had been developed in England during the reign of the first Queen Elizabeth, shortly before the first colonists sailed for America. At that time in the Mother Country, land and buildings were closely held by a few big landlords. Sales were rare. Most people lived in rented homes. The men who had to compile for their parishes the rolls of properties which were to be taxed at a uniform rate in proportion to their value, therefore, found it easiest to use annual value as the tax base. Although vestiges of the annual value system survived in this country until after the revolution, the wholly different situation in a society where most men could own real estate, and where the great mobility of the people meant that sales of property were frequent, eventually made it easier to replace annual value with capital value as the tax base when rolls had to be compiled. It is in that form that lands and buildings have appeared on the local tax roll for well over a century and a half. In short, local governments in this country have for a long time been taxing buildings, supposedly in proportion to their value, at a rate applied uniformly to all the many types of property which the assessor was required by law to list on his roll. How then did it happen that private builders managed to keep the supply of new housing reasonably abreast of the growing demand until, say, about 1914? What has happened