The research comes at a time when there is a marked divide in homeownership between young buyers and older members of the baby boomer generation.

The Washington Examiner spoke with one of the authors of the study, Baruch College’s Joshua Coven, who said he and his team weren’t necessarily surprised by the findings.

“The project was started from this really interesting core idea, and the core idea is that property taxes can reallocate housing across the life cycle from the elderly to the young,” Coven said.

He explained that property taxes can act like an additional mortgage, in a sense.

If one were to think of two properties that are identical in every respect, but one has a higher property tax bill, a prospective homebuyer would want to pay less for the property with higher property taxes. So in that way, higher property taxes can help lower housing prices, and a lower price means a smaller down payment is needed from potential homebuyers.

“This functions exactly like a mortgage does in terms of shifting payments from the present into the future … it benefits different generations differently because different generations are differently able to pay the down payment — and in return differently able to pay this higher monthly cost,” Coven explained.

Younger people tend to have less wealth and need more support for a down payment to buy a home, but they often have higher annual incomes that they can use to pay the higher flow costs. Higher property taxes can thus benefit younger people.

“Whereas the elderly are more likely to have higher wealth but lower income, so this lower price but higher per period payment is more likely to make it more difficult for them to own homes,” Coven said. “So that’s the core idea.”

There could be some key takeaways from the study for policymakers, especially given the push in certain parts of the country to lower or even eliminate property taxes.

“So it’s important for policymakers to understand that this would raise property values and make it harder for young people to buy homes and benefit incumbents,” Coven said.

Alex Brill, a senior fellow at the American Enterprise Institute, said that, logically speaking, higher property taxes could cause older people to sell their homes and downsize, thus increasing supply in the market and lowering home prices for younger people.

“The same thing would be true if you had a baseball card collection, and we imposed a tax on holding baseball cards and old people had baseball card collections — they would all sell their baseball cards, and the prices would collapse, and young people might be more willing to buy baseball cards,” Brill told the Washington Examiner.

And there is evidence that tax policy in some states is contributing to the generational divide in housing, according to Jared Walczak, vice president of state projects at the Tax Foundation.

Housing has become much more expensive since the pandemic. In recent years, assessed values of homes across the country have risen close to 30%.

Walczak pointed out that, given the big increases, if local officials don’t cut rates or the mill levy, that has led to substantial property tax increases, which has led to discontent. But he said that discontent has spilled over from simply wanting relief to, in some cases, calls for major tax reductions or even the elimination of the property tax.

“And personally, that’s throwing the baby out with the bathwater,” he told the Washington Examiner.

But certain state tax laws have made things more difficult for younger homebuyers in light of the big home price increases.

Walczak pointed to laws like Florida’s “Save Our Homes” amendment to the Florida Constitution, which made it so that the assessed value of someone’s homestead property can increase by no more than 3% above the previous year’s assessed value.

For instance, if a young homebuyer purchases a home for $600,000 in Florida this year, he or she will end up having to pay property taxes on $600,000 worth of that property. But if a homebuyer had bought that same property back in 1995, he or she is more likely facing an assessed value of about $225,000.

“You’re paying only a little more than a third of what a new homeowner is, and this is contributing to a significant generational divide where newer, younger homeowners face much higher property tax burdens than older existing homeowners, and those existing homeowners are often disincentivized from selling even when they would like to because downsizing could increase their property tax burden,” Walczak explained.

Housing affordability has been a major issue in the United States, and property taxes are but one consideration in the generational divide in homeownership.

This year, lawmakers mounted a bipartisan push at the federal level to boost housing supply, which most economists argue is the biggest problem when it comes to housing.

TOP REPUBLICAN OUTLINES HOUSING PRIORITIES AFTER MAJOR BIPARTISAN BILL

The housing legislation, the 21st Century ROAD to Housing Act, became law last month.

The legislation streamlines environmental reviews to speed up affordable housing development and makes it cheaper and easier to build manufactured homes. In addition to easing federal regulations, the bill also encourages states and cities to reform their land use rules, which would mark a significant change in the federalist system with respect to city planning.