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An essay published by Conversable Economist on Sept. 28, 2026, discusses property-tax reforms examined in economist David Schleicher’s paper. Such reforms can lower taxes for owner-occupied homes, but may shift costs to businesses, other taxes or state budgets—and may raise home prices by reducing the cost of ownership.
A Sept. 28, 2026, post by Conversable Economist examines a tension at the center of recent property-tax reform: homeowners may want rising home values to build wealth while also seeking lower taxes on those homes. Drawing on a paper by economist David Schleicher, the post says tax cuts can shift costs to other taxpayers and may push housing prices higher by lowering the ongoing cost of owning a home.
Schleicher’s paper, “The Great American Property Tax Freak Out,” was posted online at SSRN on Sept. 1, 2026. As summarized by Conversable Economist, it describes several states making substantial changes to property-tax systems over the previous three years. Those changes have provided large tax benefits to owner-occupied homes while moving more of the burden to commercial property, other local taxes or state funding.
The post names Florida, Ohio, North Dakota and Texas as states that have considered going further, including proposals to eliminate property taxes on owner-occupied housing or abolish property taxes altogether. The source does not provide the status or details of each proposal, so consideration should not be read as enactment.
Schleicher argues that rising home values, particularly in suburbs after the pandemic, have contributed to homeowner anger because property taxes rise with assessed wealth. He says some reforms raise rates on commercial property owners, whose property values have declined in the same period. These are the paper’s analysis and characterization; the post does not supply state-by-state tax figures or a measurement of the reforms’ effects.
Who Pays When Home Taxes Fall
Property taxes are a major locally raised revenue source in the United States and are a main source of funding for local schools, according to the post. Many local governments have also traditionally used them to support police and other services. Cutting the tax on homes therefore does not automatically remove the cost of those services: the bill may instead fall on commercial property, other local taxes or state budgets.
That shift can affect renters and businesses as well as homeowners. Schleicher’s paper, as described in the post, treats the reforms as a move away from a system in which residents collectively fund local services through property taxes and toward a more redistributive arrangement. The post does not establish how much any particular group’s costs would change.
There is also a housing-market consequence. If lower property taxes reduce the cost of owning a home, buyers may be willing to pay more for the property itself. The analysis warns that this could benefit current owners while making it harder for prospective buyers to enter the market. That is a possible effect described by the economist, not a reported price change already measured across the states named.
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Why Homeowners Seek Tax Relief
Property taxes differ widely among US communities, and local governments rely on them to varying degrees. The post says that, broadly, they are the principal own-source revenue for local governments and the main funding source for local schools. State-level limits on local property taxes can therefore affect how much control communities have over their budgets.
A property tax can also be difficult to pay when an asset’s value rises without a matching increase in household income. A home may gain value on paper, but that appreciation does not necessarily provide cash to cover a larger annual bill. The post says older homeowners can be a particularly sympathetic constituency because they may have substantial accumulated wealth, including home equity, alongside lower current income.
The original post uses this tension to explain why a homeowner may welcome appreciation as a source of wealth yet oppose the tax bill tied to that value. It also notes that homeowners may want other homes to become cheaper so they can trade up. Those desires can conflict, especially when policies that reduce ownership costs also support higher market prices.
““In the last three years, a number of states have substantially reformed their property tax systems, providing huge tax benefits to owner-occupied homes.””
— David Schleicher, in “The Great American Property Tax Freak Out,” as quoted by Conversable Economist
The Scale of the Tax Shifts
The post does not identify the exact provisions, implementation dates or fiscal effects of reforms in each state. It also does not specify which proposals in Florida, Ohio, North Dakota and Texas remain under consideration, or whether any have since advanced. Its description of changes over the preceding three years is not accompanied by a state-by-state accounting.
It is also unclear how local governments would replace lost property-tax revenue in each case, how service budgets would respond, or how much of any tax cut would be passed through to renters and business customers. Schleicher’s prediction that reforms could raise housing costs is an economic argument; no price forecast or causal estimate is provided in the source material. The post likewise does not quantify effects on construction, zoning or local government finances.
Track State Plans and Local Budgets
The next developments to watch are the status of proposed state laws and the rules local governments adopt under them. Budget decisions will show whether revenue losses are covered by state aid, other taxes, service reductions or some combination. Any changes to assessments, tax rates or exemptions will also matter for the distribution of bills between homeowners and commercial property owners.
For housing-market effects, readers would need later evidence on home prices, rents and ownership costs in places that change their tax systems, compared with places that do not. The material provided does not set out a next legislative date or a scheduled follow-up to Schleicher’s paper, so the timing and eventual effects remain uncertain.
Key Questions
What is the development discussed in the report?
A Sept. 28, 2026, Conversable Economist post discusses state property-tax reforms and summarizes economist David Schleicher’s paper on their trade-offs. It is an analysis of the issue, not an announcement that a particular tax plan has taken effect.
Can a home’s value rise while its property taxes fall?
Yes. A home’s market value and its tax bill are affected by different factors, including local tax rules, assessments and rates. The post’s central point is that reducing taxes on owner-occupied homes can lower ownership costs even as home values rise, though it does not quantify that effect.
Who may pay more if homeowners receive tax cuts?
Depending on the policy, costs may shift to commercial property owners, other local taxes or state funding. The post does not specify the replacement funding for each state or establish how costs would reach renters and customers.
Which states are considering broader changes?
The post names Florida, Ohio, North Dakota and Texas as states that have considered eliminating property taxes on owner-occupied housing or, in some cases, property taxes altogether. It does not give the proposals’ current status, so the reference does not mean the plans were enacted.
Why might lower property taxes push home prices up?
If taxes fall, the recurring cost of owning a home may fall too. Schleicher argues that buyers could then be willing to pay more for a home, potentially benefiting current owners while raising the purchase price for future buyers; the source provides no measured estimate of the effect.
Source: hn
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