Last week, City Council President Darrell Clarke (D-5th dist.) held an information session at the Fishtown Recreation Center about the city’s Actual Value Initiative. About 30 people attended the meeting.
They gave him an earful.
Flanked by staff, Clarke listened as neighbors questioned the methodology of AVI, criticized the lack of prosecution of tax-delinquent property-owners, and complained that ultimately, many of them may be forced to pay more taxes because property values in Fishtown are soaring as the neighborhood becomes increasingly attractive for owners and renters.
“I feel like I’m getting run out of the neighborhood,” said Hoode, the owner of Black Vulture Gallery on East Girard Avenue.
Hoode, who goes by that name alone, said property taxes on his Frankford Avenue home will increase from $800 a year to $5,000 under AVI, which he said he can’t afford. He said that many of his friends who also own and operate small businesses in the neighborhood fear they will be forced to leave.
“We helped make this area what it is,” Hoode said.
The talk at the Fishtown Recreation Center was Clarke’s fourth stop on a series of visits to neighborhoods throughout his district, which includes Brewerytown, parts of North Philly, and Fishtown.
The final information sessions will be held tonight, August 14, at the Cecil B Moore Recreation Center, 2551 N. 22nd St., at 6 p.m.
“What surprised me was finding out that a lot of people have not filled out their homestead exemption forms,” Clarke said. “I think it’s very important to take advantage of a $30,000 credit. A lot of the seniors are very confused about the paperwork, and I’m concerned about that.”
The Homestead Exemption Act reduces the taxable value of a property by $30,000 if it is the owner’s primary residence. So, a property re-assessed through AVI at a value of $100,000, would be treated as having a value of $70,000.
But in neighborhoods like Fishtown, real estate values have climbed so rapidly in recent years that even the homestead exemption might not help long-time residents.
One woman at the meeting said she is retired and lives on a fixed income, and cannot afford to pay any additional tax. Another said she is a city employee, and also cannot afford to pay a higher tax.
“There are communities where a $30,000 homestead exemption is not enough,” Clarke acknowledged.
Clarke said the Gentrification Protection Plan would help combat this problem. City Council Bill 120340 offers protection to long-time owner-occupants (10 years or more; five years or more for those in government-subsidized housing) whose income is equal to or less than 150 percent of the Area Median Income (which is established by the U.S. Department of Housing and Urban Development). Re-assessments of the properties of eligible homeowners will be capped at 300 percent of their original values, meaning that their properties cannot be reassessed at more than three times their last assessed value.
This bill has been enacted as law, but the official application for homeowners to file for the Gentrification Protection Plan is still pending.
Clarke also acknowledged the inconsistencies in the AVI re-assessments, which in some neighborhoods varied widely block by block.
“There are a lot of mistakes, and we have to correct it,” Clarke said. “That’s why I’m urging people: if you don’t think it’s accurate, you should appeal it.”
Clarke said that in the future, the city’s Office of Property Assessment would be required to publicly post the AVI formula online, so that homeowners can understand how their re-assessments were calculated. There is also a planned task force that will monitor AVI and attempt to correct the value assessments if mistakes were made. In three years, the assessments of Philadelphia properties should be 100 percent accurate, Clarke said.
Other pending legislation Clarke mentioned at the meeting included a bill to allow homeowners to pay their taxes in installments, and the “enhanced tax lien program,” which he said would strengthen city efforts to crack down on tax-delinquent property owners.
“We’re going after them – big time,” Clarke promised.
However, some people in attendance left angry, calling the meeting “useless.”
“It was just surface talking,” said William Giddins, a Wynnefield homeowner who said he came to Fishtown for the opportunity to hear Council President Clarke speak about AVI.
“In areas where once it was just natural living, now they’re becoming fashionable, and we have to pay the expenses and feel it in our taxes. It’s all due to people moving back from the suburbs,” Giddins said.
Clarke urged residents who have concerns about AVI, or who know senior citizens or disabled people who may need a representative of his office to visit them at their home for assistance with applying for Homestead Exemption, to contact his office at 215-686-3442. ••