Abstract

This study examines the role of natural disasters in prompting property assessments and their combined effects on homeowners and local government finance. Using the 2017 Hurricane Harvey as a quasi-experiment, we employ a difference-in-differences hedonic model and data of Harris County, Texas to analyze the changes in assessed and market values, assessment ratios, and effective tax rates for affected properties.

Results show that Harvey caused an approximate 1.5% decline in assessed values, averaging $4927 per house and $2.6 billion reduction in tax base. The greater decline in assessed values relative to market values resulted in lower effective tax rates for affected homeowners after the storm.

Houses in the Special Flood Hazard Areas experienced the largest declines in market and assessed values, closely mirroring value decreases among flooded houses. The storm effects varied across property value brackets, with lower-valued houses experiencing the most adverse shocks and also receiving proportionally greater tax relief than higher-valued ones.

Though Harvey slashed property values, its effects were largely reversed within a year, revealing the resilience of the local housing market and the importance of fair tax policy in post-disaster recovery.