Policy Over People: Tax Lien Sales and the Hidden Tools of Displacement in Black Communities

• In Event: Policy With versus Policy On: Collaborative Decision-Making and Equity

Abstract

Tax foreclosures result from tax lien sales— a legal process through which municipalities transfer tax- and fee-delinquent properties to private individuals or entities to recover unpaid debts (Rao, 2012). This enables local governments to recoup revenue, with the potential for developers to flip properties and increase their taxable value. While often framed as neutral tax collection (Kahrl, 2017), tax lien sales generate neighborhood inequities that correlate with race (Stokes, 2023). As a policy, they enforce compliance through intimidation, particularly of Black residents, in the service of urban renewal (Kahrl, 2017). This “policy over” approach erodes generational wealth, destabilizes neighborhoods, and undermines racial equity.

This study asks: In a context less extreme than Detroit, where do tax foreclosures spatially cluster, and what administrative motivations shape these patterns?

Because property taxes comprise a large share of city revenues (Enright, 2020), municipalities are incentivized to maximize taxable property. Development is often pursued to attract wealthier residents assumed to strengthen the tax base (Nachmany & Hananel, 2022). When properties threaten capital interests, cities default to urban renewal policies that protect central business districts—often at the expense of Black neighborhoods (Hyra, 2012). Over time, these policies have expanded municipal control (Blessett, 2020), enabling cities to extract land under the guise of public interest. While slum clearance (Gotham, 2014), highway construction (Rothstein, 2017), and eminent domain (Blessett, 2020) are classic urban renewal tools, I argue that tax lien sales now function as everyday, hidden mechanisms of this legacy. They exemplify “policy over” communities— where administrative actions favor capital over collaboration.

While legal scholarship has examined tax foreclosure (e.g., Atuahene, 2020; Baskett & Bradley, 2021; Taddonio, 2021), urban policy literature has focused heavily on Detroit (e.g., Akers & Seymour, 2018; Dewar et al., 2015). This study centers on Marion County, Indiana— a consolidated city-county that includes Indianapolis. Marion County offers broader insight, as its economic recovery after the 2008 financial crisis reflects national trends (Prescott & Paulson Gjerde, 2023)—a period marked by widespread housing instability.

Using spatial and temporal descriptive analysis of tax sale, census, and administrative data, I find that tax lien sales disproportionately occur in neighborhoods of color. Individual-owned properties are targeted more frequently than corporate-owned ones, raising concerns about the targeted displacement of Black residents. Clusters are also evident in Neighborhood Investment Analysis (NIA) areas— zones the city earmarked for economic development. These patterns reflect how cities use administrative tools to reinforce uneven development and racialized dispossession.

Findings highlight how routine policy mechanisms perpetuate spatial inequality. By treating tax lien sales as standard governance, local governments wield disproportionate power over Black communities. This underscores the urgent need for equity-focused, community-centered reforms in local government.

Author

• Noelle Broughton, University of Kansas
  Presenting Author