Urban Studies and Planning Commons^™

Tax Equity Effects Of Creative Financing: Empirical Evidence, James G. Strathman, Morton Paglin

Center for Urban Studies Publications and Reports

This paper argues that tax inequities are produced when property assessments fail to account for the effects of creative financing . Changes in equity resulting from the capitalization of creative financing in housing prices are estimated from a sample of properties in Portland, Oregon using the Paglin-Fogarty model. The principal findings of the analysis indicate that : 1) on average, creatively financed houses have a higher mean assessment ratio than conventionally financed houses; 2) the assessment penalty for creative financing is systematically related to the market value of houses, and is both absolutely and relatively larger for houses with lower …