Turns Out City Probably Will Make a Profit Off AVI

Profiting off our property tax increases?! Outrageous! Oh wait, that’s what we want. When the Nutter administration decided that his AVI plan would be revenue neutral, (executed instead in the name of property tax fairness), many likely had this thought: “You’re raising property taxes on 60% of the population and not brining in any new money? What’s the point?” Well, according to real estate experts, it seems that based on market forces, the city will indeed make some money from AVI, beginning in 2015. (Next year’s assessments won’t affect revenue.)

Kevin Gillen, a real-estate expert who worked as a consultant for the city on AVI, said the real-estate market usually grows one or two percentage points faster than overall inflation…”Revenue will rise because [the city’s] property-tax base is growing and not because its property-tax rate is growing,” he said.

In other words, as long as the city doesn’t dip its tax rate, suffer through another housing crash, or drastically rejigger its assessments again (it plans on re-assessing properties each year, though its unclear how that’ll affect tax bills), AVI should help pad the city’s bank account. And from there, perhaps, better fund the broke school district, which relies on property taxes. [Daily News]