City reassessment hurting African Americans and seniors on fixed incomes

Stephen Williams Tribune Staff Writer

May 26, 2022


In Penntown, a mostly Black Neighborhood in North Philadelphia, new million-dollars townhomes have raised the values of home across the street, in some cases doubling their tax bills. --Tribune Photo/ Adbul R. Sulayman


Rosalee Cooper, president of the Ridge Allegheny Hunting Park Association, says many of her neighbors are worried and confused about the city’s reassessment of their homes. When she checked on the city’s website, the value of her home was $127,000, about double from last year, when it was $64,000.


“That means my tax bill will double,” Cooper said. “A lot of them are complaining that with the taxes going up that they are not going to have money to fix up their houses because they have to pay whatever the taxes come to be and we know that they are going up high. We have a lot of seniors on fixed incomes. They are barely making it. Some have to choose between their medicine and their taxes.”


According to Cooper, most of her neighbors have seen similar increases and some who can’t qualify for home equity loans are turning to reverse mortgages, which often result in a family losing the home if their heirs can’t pay the interest that accrues until the borrower dies or leaves the home. The community group has held a half-dozen meetings with city officials to discuss the reassessments.


They are not alone.


Earlier this month, Mayor Jim Kenney said the average residential property value in the city increased by 31%, in the first citywide reassessment in three years. The tax bills are due March 31, 2023.


According to a review by the office of City Controller Rebecca Rhynhart, the largest percent increases are concentrated in neighborhoods in North Philadelphia, West Philadelphia and South Philadelphia.


Those communities have large concentrations of Black, brown and fixed-income residents.


In addition, the controller’s review noticed inconsistencies in valuations. For example, 4,200 properties, including 3,300 residential properties, had valuations of $0. The controller’s office put out an interactive map that details the increases in every section of the city.


“When we looked at property assessments in 2019, we found that our poorest neighborhoods had the worst assessments — our most vulnerable residents were paying more than their fair share of property taxes, compared to wealthier neighborhoods,” Rhynhart said. “At this point, the Office of Property Assessment has not released its methodology or data to show these earlier issues were addressed.”


According to Rhynhart, while it is possible that there are large increases in assessed values for tax year 2023, it is unlikely that the market changes over the last three years alone account for the doubling of assessed values in certain parts of the city.


“Couple that with the opaque process and inconsistencies in land valuation and one thing is clear: the reassessment process needs to be better,” Rhynhart said.


Kevin Lassard, a spokesperson for Kenney, said the city’s rapid growth has made reassessment difficult, but the city has programs designed to give residents relief.


“We recognize that accurately capturing the city’s extraordinary property value growth — which reflects well on Philadelphia being a place of choice — may at the same time present financial hardships for many Philadelphians, which is exactly why the administration has proposed relief measures that return to taxpayers every city general fund dollar the new assessments are projected to generate,” he said. “Those measures include increasing the homestead exemption by more than 40%, increasing the amount dedicated to LOOP by 20%, reducing the wage tax to its lowest rate in over 40 years, increasing outreach funding to sign people up for already extensive relief measures, and working to ensure that more seniors enroll in the senior tax freeze.”


Residents will receive notices from the city about the new valuations by Sept. 1. Appeals must be filed with the board of revision of taxes by Oct. 3.


More info is available at www.phila.gov/2022-05-03-property-reassessments-and-relief-programs-what-you-need-to-know/.



“Many of these homeowners — living in working and middle class neighborhoods — that are facing increased assessments have been the backbone of Philadelphia’s tax base for decades,” said Councilmember Cherrelle L. Parker. “What really angers me though is that these homeowners are likely being over-assessed by the public sector, while at the same time, they are being under-appraised by the private sector. This means they are being over-taxed while also facing stifled generational wealth accumulation. Working with my Council colleagues, I will do everything in my power to ensure that these increased assessments do not translate to increased taxes for working and middle class Philadelphians. Nothing is off the table — whether that means increasing and expanding programs such as LOOP (Long-Term Owned Occupant Program) and the Homestead Exemption, or lowering the tax rate.”


Several property owners said they had already seen higher tax bills in the past few years due to the explosive growth of development targeting residents with higher incomes, compared with the average neighborhood income.


For example, residents in the Yorktown section of North Philadelphia had already seen similar increases in the last few years because of investors buying up multiple properties and renting them out to multiple Temple University students, driving up values and taxes. Now their tax bills are doubling again.


Sandra Mills, a retired union organizer who lives in Southwest Philadelphia, said the unfairness of the latest assessment pointed out in the city controller’s map is atrocious.


“What I am hearing is about a bunch of programs that nobody is going to qualify for. Everything has an asterisk by it, or is based on income-eligible,” Mills said. “That assessment is totally unfair, it’s racially biased. We need a clean sweep movement in this town. It is a betrayal. The people we sent down there to represent us they haven’t done that.”


For a property owner in North and West Philadelphia, the reassessment has caused rent increases of 4%, instead of 2%, which is still barely keeping up with inflation and hurts the owner’s chances of keeping and attracting tenants.


In Penn Town, a neighborhood in North Philadelphia near Sixth and Popular streets, new million-dollar townhomes have driven up values and taxes for homes across the street in the past few years, said Jake Adams, who lives there and owns Barber’s Hall in North Philadelphia.


But it is a double-edged sword. Some in the neighborhood have sold homes for close to a million dollars, he said.


The average American considers property taxes as the “least fair,” according to a May 2022 report on property tax equity in the city by the Federal Reserve Bank of Philadelphia, because lower value properties often have higher assessments and tax burdens, compared with higher value properties.


In addition, Pennsylvania, like many states, doesn’t require regular revaluation cycles — at least not short, regular cycles.


“During long intervals between assessments, property values in urban centers diverge widely,” the report stated. “Those in gentrifying neighborhoods and prime locations often appreciate quickly, whereas those in poor neighborhoods and less desirable locations rise very little, if at all. Recessions could also exacerbate the quality of overall property assessment when assessments do not keep up with sharper declines in property.”


The Fed advocates more frequent and regular reassessments.


One problem in Philadelphia is that much of the explosion in development is happening in low and moderate income areas that typically have large numbers of African Americans and other people of color.


“In Philadelphia, historical lags in property assessment had resulted in systematic inequities in the city’s property tax system,” the Fed report said. “Between the 1980s and 2013, Philadelphia did not conduct any comprehensive reassessment. As a result, the assessed value listed on most property tax bills was significantly lower than the true market value and properties with similar market values were often assessed and taxed with dramatically different values.”


This article was originally posted on May 26, 2022 by the Philadelphia Tribune. You can read the original article here.

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