by Pete Mazzaccaro
New property assessments have been made in Philadelphia and most people in Chestnut Hill and West Mt. Airy appear to be in for a pretty big tax hike.
A lengthy story on Sunday in The Philadelphia Inquirer reported on an extensive analysis of reassessments for the entire city and identified the Northwest neighborhoods among a group in which property tax hikes are more than 30 percent. Those neighborhoods include South Philadelphia, Powelton, Point Breeze and Northern Liberties. In the Inquirer’s story, one South Philadelphia block saw an average tax bill increase of more than 70 percent.
Chestnut Hill and West Mt. Airy, according to the Inquirer’s analysis, will see average tax bill hikes between $500 and $1,752. The paper also reported that the median market value of single-family homes increased 10.5 percent from 2018, with median valuations increasing from $112,800 to $124,600. The median tax bill increase across the city is $165.
Hill residents were just learning of the increases this week and processing a mixture of shock, disappointment and anger. Many reacted not only to the hikes to their assessments but also to Mayor Kenney’s proposal to raise the tax rates. One Mermaid Lane resident, who asked that the Local not share his name, said his property taxes have risen by 45 percent since he bought his home in 2002.
“When I looked at the new valuations, I almost had an anxiety attack,” he said. “Our assessment went up about $70,000. What makes it even more perplexing is that we just had to have our house appraised for a home equity loan, and the bank gave an appraisal that was just about $100,000 less than what the city has appraised.”
His neighbors, he said, have seen even steeper hikes, and he’s afraid an appeal to the city might hike his taxes even higher.
“The reason I’m worried is that maybe the city looks at our house and says, ‘We made a mistake’ and assesses it at an even higher value,” he said. “I’m scared to appeal for the same reason.”
Another Hill resident, who asked the Local not use her name, said that the ever-increasing tax bills were her invitation to leave for the suburbs.
“As a retiree to Chestnut Hill, I am astounded by the proposed tax increase by our Mayor,” one Hill resident said. “I already called his office expressing my displeasure. I just want to know why in the world the city is not going after the millions of dollars from the owners of abandoned buildings rather than raising our taxes. It is getting crazy here with his tax increases particularly with his latest folly to increase the transfer tax. Truthfully we are out of here.”
The new assessments are the result of the city’s Actual Value Initiative, a policy instituted under the administration of Mayor Michael Nutter. The principle of AVI, as it is widely known, was for property assessments to much more accurately reflect the actual value of a home. Between 2013 and 2014, many homes in Chestnut Hill saw their property assessments double in value. The current crop of new assessments are in keeping with the city’s promise to keep assessments on pace with actual market value.
The Local examined one block in Chestnut Hill to get a sense of the average tax hikes in a relatively average Hill block. The median sales price of a home in Chestnut Hill is approximately $570,000 according to Zillow. The 8400 block of Ardleigh Street is a mix of homes valued by the city at a median worth $488,100, $363,500 more than the city average.
Of the 18 properties listed on the 8400 block of Ardleigh Street, property value assessments rose by an average of $113,578 between this year and last for a median tax bill increase of $1,567. That’s $1,402 more than the average city increase. For that block, the median property tax bill will be $6,433.
According to data shared with the Local by Bruce Glendinning, senior vice president/region sales manager of Berkshire Hathaway, Fox and Roach Realtors in Chestnut Hill, home values have been on the rise but at a rate below the increases seen on the 8400 block of Ardleigh Street and across Chestnut Hill and Mt. Airy.
According to that data, average home sales prices have risen an average of 18 percent over the two-year period between March 2016 and March 2018.
Glendinning noted that the assessments made by the city are based on a formula intended only for tax purposes and don’t influence the sale value of a home. If the city values a home at $488,000 it could sell for more, or it could sell for less.
The new assessments, Glendinning said, are the result of a real estate market in Chestnut Hill that has been particularly good recently. As prices have risen in Center City, he said, people have been looking to buy in Chestnut Hill as well as other neighborhoods that have seen hikes like Point Breeze and Northern Liberties.
“The city sees a lot of things taking place in the market and is taking advantage of that for tax purposes in these neighborhoods,” he said. “It’s not the best system. Some people will push back and they should.”
Asked about the impact of rising taxes on home resale value, Glendinning acknowledged that it could affect the market.
“Chestnut Hill has long been a tremendous value,” he said. “If people see taxes rising and are not willing to pay, it could have an impact.”
Anyone interested in changes to their property’s assessment can easily find their home’s valuation history and current status online at property.phila.gov. It’s also possible to appeal by filing an appeal form with the board of revision of taxes. The latest forms have yet to be released, but information on the process can be found at phila.gov/brt/appeals/Pages/default.aspx
Next, we’ll talk to the city and city officials about this round of assessment hikes and what it means for Mayor Kenney’s proposed property tax rate increase.