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.” ••