Northeast Times

Talking taxes

— 10,000 callers de­luge City Hall over AVI

Re­altor Chris Ar­tur next to a bill­board at Har­bison and Cot­tage. The prop­erty has been as­sessed at $50,000, Thursday, Feb­ru­ary 21, 2013, Phil­adelphia, Pa. (Maria Pouch­nikova)

The phones in City Hall star­ted ringing off the hook last week as res­id­ents across the city re­ceived their new prop­erty as­sess­ments and were con­fused about what they meant or were angered by the num­bers they saw.

The city’s Of­fice of Prop­erty As­sess­ment, which mailed out the new prop­erty val­ues, re­ceived al­most 10,000 phone calls and voice­mails over two days, Feb. 19 and 20, ac­cord­ing to Mar­isa Wax­man, the of­fice’s dir­ect­or of policy and pro­grams. Many of the ques­tions were about the homestead ex­emp­tion, which would al­low homeown­er-oc­cu­pants to re­duce the as­sessed mar­ket val­ues of their homes.

The volume was less, but the ap­pre­hen­sion among callers just as high at City Coun­cil of­fices.

Coun­cil­man Mark Squilla (D-1st dist.) on Feb. 20 said he got so many calls about the new, fair mar­ket value as­sess­ments — a pro­gram called the Ac­tu­al Value Ini­ti­at­ive — that he asked some vo­lun­teers to help to an­swer the phones.

“We knew we would get many calls, but didn’t real­ize there would be so many prob­lems with the num­bers,” Squilla said.

Many of the calls were ques­tions about what the as­sess­ments mean, the coun­cil­man said on Feb. 21 in an e-mail to the North­east Times.

City Coun­cil­man Bri­an O’Neill (R-10th dist.) said he had got­ten about 80 phone calls on the AVI as­sess­ments by 12:30 p.m. on Feb. 20, five days after they were mailed. About a dozen people walked in­to his of­fice at Bustleton and Bowl­er, too, he ad­ded.

Most who con­tac­ted O’Neill’s of­fice were con­fused about what the num­bers mean, the coun­cil­man said. Some saw they had not been ap­proved for homestead ex­emp­tions and now must re­apply. Just two had con­cerns about the val­ues as­signed to their prop­er­ties, O’Neill said.

Last year, the state le­gis­lature gave the city the power to ad­opt a homestead ex­emp­tion. About 200,000 people have ap­plied for the ex­emp­tions.

If City Coun­cil goes ahead with the homestead ex­emp­tion and the fig­ure is set at $30,000, a homeown­er as­sessed at $130,000 could sub­tract $30,000 from that value be­fore mul­tiply­ing it by the tax rate. Coun­cil has yet to set the tax rate, but May­or Nut­ter has asked for a rate of 1.25 mills on $100,000 of as­sessed value, or $1,250.

Also, if you think that the OPA no­tice is a bill, it’s not.

“I think folks are try­ing to un­der­stand the in­creased value,” Coun­cil­wo­man Maria Quinones Sanc­hez (D-7th dist.) stated in an e-mail to the North­east Times.

At OPA, Wax­man said many of the callers had ques­tions about their homestead ex­emp­tions.

“Either folks who ap­plied were denied and are now re­apply­ing, or nev­er ap­plied and are seek­ing in­form­a­tion and ap­ply­ing. After that, it’s a gen­er­al mix of com­plaints.”

Wax­man said people called with is­sues about lis­ted own­ers. Some people had de­ceased spouses or changed their last names. There were callers who wanted to know how the new as­sess­ments would af­fect what they pay. Oth­ers wanted to know about get­ting their as­sess­ments re­viewed. 

As­sessors looked at homes from the out­side. Ac­cord­ing to the OPA’s Web site, they con­sidered a prop­erty’s loc­a­tion, age, con­di­tion and its use as well as nearby sale prices to ar­rive at an as­sess­ment. The new num­ber should re­flect a prop­erty’s ac­tu­al mar­ket value. 

Pre­vi­ously, the city used a for­mula to ar­rive at as­sessed val­ues, and many prop­erty own­ers com­plained that sys­tem was out­dated and lacked fair­ness. Some own­ers felt they were pay­ing too much while oth­ers were get­ting large tax breaks. Some homeown­ers have been un­der­pay­ing for many years and know that their mar­ket val­ues have in­creased, Quinones Sanc­hez said.

“We need folks to be out­raged about that,” she said.

Earli­er this month, City Coun­cil mem­bers and City Con­trol­ler Alan Butkovitz said North­east homeown­ers gen­er­ally would not see their taxes go up by very much and some would even de­cline un­der the new as­sess­ments if the tax rate that City Coun­cil ad­opts were kept low.

Hard­est hit un­der AVI will be prop­er­ties in and around Cen­ter City and South Philly as well as parts of North Philly and the river wards, the con­trol­ler said.

Big tax in­creases af­fect sales, Chris Ar­tur, a Re­altor at Frank­ford and Har­bison, said in a phone in­ter­view.

“If your taxes go up sub­stan­tially, your buy­ing power goes down,” he said. “If taxes skyrock­et, the [hous­ing] in­vent­ory in­creases and, if de­mand doesn’t in­crease, there will be a neg­at­ive im­pact on real es­tate in North­east Phil­adelphia.”

“Any time things are changed, it’s a scary thing for people,” said Alan Stas­son of Re­max Af­fil­i­ates, on the 9200 block of Frank­ford Ave.

The city has been try­ing for years to make its prop­erty sys­tem fair, he said.

“And that’s the ques­tion,” he said. “Was it done fairly?” ••

Re­altor calls Value Ini­ti­at­ive ‘crap’

 

North­east Philly Re­altor Chris Ar­tur had noth­ing but bad things to say about Ac­tu­al Value Ini­ti­at­ive, the city’s prop­erty tax over­haul that was sup­posed to make as­sess­ments fairer.

“It’s all crap!” he said in a phone in­ter­view on Feb. 20. “There should be a fed­er­al in­vest­ig­a­tion of this. It should be scrapped.”

Res­id­ents last week began re­ceiv­ing let­ters in the mail that told them what city as­sessors had de­cided were the fair mar­ket val­ues of their prop­er­ties. May­or Nut­ter and City Coun­cil want AVI to up­date the cur­rent scat­ter­shot sys­tem of prop­erty as­sess­ments and make them fairer. Over two years, res­id­en­tial prop­er­ties were re-eval­u­ated, block by block, by as­sessors who mostly looked at them only from the out­side. 

Ar­tur, who has 37 years of ex­per­i­ence in the North­east real es­tate mar­ket, gives a couple of ex­amples of why he thinks AVI should be jet­tisoned.

First is a 3,300-square-foot, wedge-shaped par­cel he owns at Har­bison Av­en­ue and Cot­tage Street that is too small to build any­thing on. He de­rives a small in­come — about $2,900 a year — by rent­ing space on it to a bill­board com­pany.

That prop­erty was re­as­sessed at  more than $50,000.

“It has zero value,” he said.

An­oth­er prop­erty he owns on the 2700 block of Stevens St. has been re­as­sessed at $101,500. In the past year, the highest price paid for a row house on that block was about $85,000, Ar­tur said.

In both ex­amples, the val­ues seem ar­bit­rary, he said. 

Who­ever did the as­sess­ments doesn’t know the mar­ket, he said.

“It’s amaz­ing the crappy in­form­a­tion they’re us­ing,” Ar­tur said. “The val­ues are over­in­flated.”

Even so, he ex­pects to see his tax bills on both prop­er­ties to dip in 2014 if City Coun­cil sets the tax rate at about $1,250 per $100,000 of as­sessed value, as the may­or has asked.

But that’s not really the point, he said. The city has over­val­ued the prop­er­ties, and, be­sides, he has seen taxes skyrock­et in the past few years. And high taxes, he said, chase people out of the city.

Al­though most large com­mer­cial prop­er­ties in the city are ex­pec­ted to see de­creases in taxes un­der AVI, Ar­tur said he knows of two com­mer­cial prop­er­ties whose new val­ues are be­ing set at more than triple what they were. One Cottman Av­en­ue prop­erty is go­ing from $250,000 to $827,100. An­oth­er on Tyson Av­en­ue is go­ing from $114,600 to $461,500. 

Ar­tur says he’ll prob­ably file an ap­peal of the new value for his Stevens Street house. As for the Har­bison Av­en­ue tri­angle, he says he’s not go­ing to pay any taxes at all.

In fact, he hasn’t been pay­ing on it for a few years. Ar­tur’s been de­lib­er­ately de­lin­quent.

“This ground is worth $5,000,” he said. “I haven’t paid taxes on it since 2010. I’m not go­ing to pay. … I would pay if it was fair.”

Why would a busi­ness­man with years of real es­tate busi­ness just say no? Well, there’s some re­sent­ment in­volved.

The land, which was as­sessed be­fore AVI at about $14,000, is not suit­able for any kind of de­vel­op­ment, he said. The 2009 taxes were $502, he said. In 2010, they doubled. Taxes cur­rently are $1,375. He said he pays about $600 a year in li­ab­il­ity in­sur­ance.

Then, the city’s Wa­ter De­part­ment star­ted char­ging about $30 monthly for wa­ter run­off. There is no wa­ter con­nec­tion on that prop­erty. He com­plained to the city, but got no sat­is­fac­tion.

Ac­cord­ing to the Wa­ter De­part­ment, there are about 2,000 prop­er­ties in the city that have no wa­ter con­nec­tions but are billed for wa­ter run­off.

The city’s on­line re­cords show there are two li­ens on the small Har­bison Av­en­ue prop­erty for the taxes, in­terest and pen­al­ties Ar­tur owes, and the city has en­gaged a col­lec­tions agency to go after the money.

“This is a protest. Even if my taxes go down next year, I’m not pay­ing,” Ar­tur said. “The city can fore­close. Good luck.” ••

Re­port­er John Loftus can be reached at 215-354-3110 or 
jloftus@bsmphilly.com

You can reach at jloftus@bsmphilly.com.

comments powered by Disqus