Assessing AVI: Information sources and impact roundup

Late last week the City’s Office of Property Assessment sent out new property assessments as part of the Actual Value Initiative (AVI), an ambitious effort to reform Philadelphia’s badly broken property-tax system. There has been so much AVI  coverage in the last few days that we prepared a special roundup of articles and sites to find out useful information about AVI and its impact::


Big Picture Impact:

  • AVI’s impact is a mixed bag: There will be sharp increases in gentrified/gentrifying neighborhoods (think Northern Liberties and Bella Vista, Powelton and Point Breeze), and reductions in long-stable neighborhoods and struggling sections (think Chestnut Hill and Kingsessing respectively). Expect a battle royale over the accuracy of the new assessments and public shock among those who must suddenly adjust to huge increases in their tax burden. But keep this in mind: “AVI is meant to address a property tax system that was once so broken that only 3 percent of homeowners received bills based on their home’s real value.” [Inquirer]
  • The Office of the City Controller prepared this AVI impact breakdown by zipcode. [pdf]
  • Visualize the change in property taxes from 2013-2014 using this map from Axis Philly. The map uses the new assessed values and factors in a 1.34% tax rate and a $30,000 Homestead Exemption. It’s a fascinating peek into the hyper-locality of real estate valuations as well as broader trends across neighborhoods.
  • “No place is facing bigger increases than Councilman Mark Squilla’s First District, which includes the river wards from South Philadelphia to Port Richmond.” And given the doubling and tripling of assessments in his district Squilla fears that folks won’t be able to pay up. “This is going to create more delinquents,” he said. [Inquirer]
  • The city’s 10 biggest commercial taxpayers will get tax breaks. The biggest winner? The investors who own the Franklin Mills Mall, which could see property taxes reduced by an estimated $3.38 million for 2014. “It’s been a great week for the office-building owners. They’ve been getting the shaft for about 20 years, so it’s about time,” said on Philadelphia private real estate appraiser. Overall property tax bills for commercial or industrial properties are expected to drop at least 26 percent.  [Inquirer]
  • Is land massively undervalued?Naked Philly thinks so. Property assessments boil down to the value of the land and the improvements to that land (aka a building). But the land values in many neighborhoods seems to bear little resemblance to what people are willing to pay for a vacant lot. If city land is undervalued, there are two obvious implications: The city will lose out on money from taxpayers who are taking advantage of the 10-year tax abatements (because they still pay taxes on the land despite the abatement), and low values could encourage land speculation. As Bella Vista Town Watch President and Zoning Board of Adjustment member Greg Pastore told the Inquirer: “The winners shouldn’t be people sitting on vacant land.” And Naked Philly suggests that undervalued land could make “land banking ridiculously easy and inexpensive,” contending that could stifle private development.

On the ground:

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