The city of Philadelphia is in the thick of its Actual Value Initiative — an effort to revamp the property tax system.
The AVI touched home for Josh Uretsky who had a surprise waiting when he arrived at his apartment one night last week.
“I saw a note under the door and opened it up. It was a letter from my landlord telling me that, due to the increases in the property tax, that my rent was going up 60 bucks,” he said.
Philadelphia has just released new assessments of the value of every property in the city, including the area where Uretsky lives — West Philadelphia — and some of those assessed values have gone up a lot.
“I knew what was going on. I thought that since I wasn’t a property owner, it wouldn’t affect me,” says Uretsky. “I mean, who wants to pay more?”
He will pay more. And so likely will many others. But some property owners say they can’t pass on their costs to renters.
Jim Sims says he and other landlords have many tenants who have lost jobs.
“I had one lady, she was making around $19, $20 an hour. She lost her job, so now she’s making $12 an hour,” Sims said. “And as a result of it, I had to lower rents.”
People call Philadelphia a city of homeowners but, in fact, almost half of its households rent.
Renters also tend to have lower incomes. According to the 2011 American Community Survey, 40 percent of renting households in Philadelphia are below the poverty line. For homeowners, that rate is just 12 percent.
Victor Pinckney, a vice president of the Homeowners Association of Philadelphia, says some rents just can’t go up.
“Those of us who deal with low- to moderate-income tenants … most of our tenants are using 50 percent of their incomes to pay rent,” he said.
Pinckney singles out one element of the tax plan in particular. Called the homestead exemption, it would lower taxes for people who own their homes. That means the rate will need to be a little higher for everyone else to raise the same amount of money for the city.
The city invites seniors and other eligible low-income renters to apply for an existing state rebate program. The office of City Council President Darrell Clarke says he’s still exploring relief measures for property owners who are in for the worst sticker shock.
|Median Philadelphia Household Income Over 12 Months|
|Data from the 2011 American Community Survey|