Though it seemed like something of a relief when City Council chose to delay implementing Mayor Nutter's Actual Value Initiative (AVI)—which would have required the reassessment of every property—It's Our Money reporter Holly Otterbein argues that kicking that particular can down the road will have consequences all those hand-wringing homeowners, landlords and business owners did not anticipate.
As quick background, Philadelphia's homes and businesses have long been either undervalued or overvalued, resulting in property owners paying taxes that bear little relation to reality. AVI was supposed to fix that. But there was panic in the streets, and without the reassessments being complete, Council didn't feel it could approve the plan. It was, after all, fairly unpopular.
As Otterbein points out, the panic was probably misplaced. Pretty much every person who heard about AVI assumed it meant the worst: their taxes would go up. But it's actually the delay in AVI that makes that a fait accompli, while the implementation of the plan could have lowered taxes for many (particularly in the neighborhoods of Elmwood, Cobbs Creek, Germantown, Fern Rock and Nicetown).
Otterbein cites two representative cases of buyers who get hurt by the delay. One bought a house in Point Breeze for $13,000 that the city assessed at $22,000. Another bought a home—a, um, "fixer-upper"—in South Philly for $5,000 that the city valued at $22,300. In both cases, their property taxes will be wildly out of step with what their homes are worth. AVI might have had them paying 1.8 percent instead of (in the South Philly case) 13 percent.
· With AVI debate delayed, city's property tax unfairness continues [philly.com]