Two years ago, I began an “undercover” report on how homeowners can fight rising real estate assessments. I disputed my assessment, intending to write about the hearing process. My hearing was two weeks ago. I attended my Board of Revision of Taxes appeal to see how the process worked and to report.
The simple answer is, it doesn’t work well. Despite Mayor Parker’s order requiring Philadelphia employees to return to in-person work, not a single member of the appeals board showed up in person. Not even the appraiser who determined the value of my home was present. I could not question her.
Real estate assessments are important. Rising assessments lead to increased real estate taxes, making it difficult for people to stay in their homes. Too often, long-time homeowners are punished with higher taxes for fixing their neighborhood.
The Institute for Housing Studies (IHS), a research center, found: “Increased property taxes can be particularly burdensome for long-term owners and modest- or fixed-income households, and can also contribute to affordability and displacement pressures.”
There has been an outcry over the last few years as rising assessments led to rising real estate taxes. Philadelphia City Council developed five plans to help people; none address the cause of the rising real estate taxes: the way assessments are set. In every other part of the Commonwealth, increases in assessments must be “revenue neutral.” If assessments increase, tax rates must decrease. That’s not the case in Philadelphia. Increased assessments are not only back-door tax increases, but they also allow the city to borrow more money without a ballot question.
In Philadelphia, the seat of the American Revolution, a non-elected, non-accountable “assessor” raises taxes.
The five separate programs to help people pay increased RE taxes are: The Homestead Exemption, The Long Time Owner Occupant Program (LOOP), Low-Income Tax Freeze, Senior Tax Freeze, and the Real Estate Tax Installment Plan. How well do they work? Judging by the Homestead Exemption, not well.
The Homestead Exemption is available for owner-occupied homes. It lowers RE taxes in the current year by reducing the assessed value of a home by $100,000. If the assessor says your home is worth $300,000, you would pay taxes on $200,000. At the current tax rate of 1.3998% per $100,000, the exemption saves $1,399.
The city has a financial interest in collecting as much as possible, which might explain why 31% of the homeowners in Philadelphia, almost a third, don’t receive the exemption. They are paying more than they have — $1,399 more — simply because they have not signed up for the exemption. (Do you know anyone who is not getting it?)
As for the hearing, I was not given any information. I did not know how the process would work. I was asked how much I thought my home was worth. I said it is worth what I bought it for; anything else is an estimate.
The city, I was told, had “comparables” it relied upon. Over the two years I was waiting for a hearing, I was never sent a copy. They had to stop the hearing so I could be given a printed copy. As the assessor of my home was not there, I could not ask if the amenities in the buildings she used for comparison were considered. All I was able to discover was that not only had she not visited my home, but she hadn’t been to the building either.
I had 15 questions I tried to ask. The only answer was the assessor’s name. No other questions were answered. When it was clear that the city would not or could not answer my questions, the Chair decided to “continue” the hearing. I asked for a copy of the Zoom recording, which the Chairman said I could get, but he did not know how. When I attempted to object, the city disconnected me from Zoom.
Outside of the hearing room, I was given the name of the company that had the Zoom recording. I called, spoke to two different people, and was told they would not give me the Zoom recording, but would sell me the transcript. When I objected, stating that the Chairman said I could get a copy, the supervisor told me another supervisor would call me back. I am still waiting.
The issue remains: What is a home worth? What did it sell for in a free market? Or what did an unelected, unaccountable assessor say it’s worth? By relying on the assessor, real estate speculators and developers drive up the taxes on long-time owners who have worked to make the neighborhood desirable. A new “town home” selling for $1 million has an impact on the “assessed value” of homes around it.
Should homeowners who worked to make their neighborhood desirable, creating the market for the speculators, be punished with higher RE taxes? If the city needed additional money, it could vote for a tax increase and end the practice of allowing non-elected assessors to do so. Of course, then they may not be re-elected.
Our reporters sit through hours of city council meetings, dig through piles of documents, and ask tough questions other media overlook. Because we’re committed to addressing Philadelphia’s poverty crisis — and challenging those who sustain it. If you think this work is important too, please support our journalism.
We’re counting on readers like you.
