Morning Headlines: Daily News Trumpets Mini AVI Results

Property tax reform wasn’t put into place to bring everyone’s taxes down. Sorry.

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Philly.com has a story today that offers mixed messages about the results of the Actual Value Initiative, the property tax program that was put into place to fix a broken system. What was broken about it? The assessments were all wrong, and many of them were wrong because they were too low. Many homeowners were paying property taxes that were dreamy and terrific because they were a pittance, and that was great for them. But they were not an accurate reflection of the marketplace of the value of their home. A program to reassess was a long time coming, but it was Mayor Nutter who finally had the cojones to make it happen.

Now philly.com has two headlines (for a single story) that are sure to piss people off, but not for the right reasons.




Headline No. 1: Thousands of Philly home owners missing out on tax break
Headline No. 2: Final score on AVI: 54 percent received property tax increases

Let's start with that second one. You might find yourself outraged. Fifty-four percent is a majority! A lot of people are paying more money in taxes! That, my friends, was part of the point of AVI. It was a corrective measure, and not a particularly draconian one given the remedies that City Council put into place to mitigate the effects on residents who were longterm residents, who had financial hardships, or who might get a crappy increase they didn't want.

Which leads us to the information behind the second headline.

If everyone who is eligible enrolled in the new "homestead exemption" tax break, which deducts $30,000 from city assessments for primary residences, then 70 percent of residential properties would have seen decreases.

Only about 30 percent of eligible owners have signed up, however, and Dubow said the administration is still encouraging homeowners to apply.

I'm not sure what the administration could have done to promote the homestead exemption other than send the mayor door to door to hand people the forms personally. In addition, the city not only extended the deadline multiple times, they've now just thrown the deadline out the window and said people can keep applying for the exemption future forever.

Here's a good example of AVI in action. Someone I spoke with bought his home in East Passyunk in 2008. He was paying property taxes on that home that were too low for its market value. He received information about an increase, applied for a homestead exemption, and got one. He was not eligible for the so-called gentrification relief.

Even after the exemption, his property taxes have increased. But he says, "I knew I was underpaying. The increase is not insignificant, but I believe it's right."

I had virtually the same conversation with a homeowner in the Art Museum area, who laughed when she told me what her property taxes were before because they were so low. She felt the increase was fair given the actual value of her home.

Neither of these people are wealthy. They're doing okay. They have jobs and health insurance but take SEPTA and try to economize. They understand the property tax process and their role in it as homeowners in Philadelphia County. Their new tax burden will go to the schools. I admire their attitude.

What is outrageous is this:

The Daily News requested the information on the tax bills, which were due in March, for three months. Dubow provided the figures yesterday after being told the newspaper planned to publish a story on the administration's reluctance to release them.

When a news outlet requests information, it shouldn't take three months to provide it. It should take three days. The Nutter administration excels at deferring responses. I don't admire that attitude.

Final score on AVI: 54 percent received property tax increases [Daily News]

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Study: Millennials Will Soon Boost the Housing Industry [Planetizen]

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  • Rocco Lamagela

    My RE taxes went up 50%…good bye Philly!