Avi

[LT4]

With all the recent AVI news in the media lately, I am surprised that there has been no mention here. I wonder why?

There is an interesting article regarding tax abatements in Philly.com today.

For some buyers, tax abatement was a short-lived deal

But more than the abatements ending, I am concerned that myself and others won't be able to afford taxes at the new level. Sure, many of us are paying low taxes. But drastic increases in our tax bills could mean problems.

I think this may also increase rents in this neighborhood.

Any thoughts?

[Mustard]

Just one. It stinks.

[seand]

Might use the search option. There lots and lots of threads about the topic.
The city not doing a better job of collecting from property tax deadbeats stinks. Assuming the new assessments are fairly accurate I'm not sure its fair to say that taxes calculated on actual comparable sales is anything other than fairer than what we have now. For every person that goes up there are probably 5 who are going to go down.

[EJW]

Being discussed here in length:
http://www.philadelphiaspeaks.com/fo...ill-go-up.html

[topogigio]

Close to a half billion dollars is currently owed to the city of Philadelphia in property taxes. Yet, the Mayor and other members of city council think that the only way to solve the current school budget crises is to increase taxes on those who pay their fair share in full. It's time to tell the city to collect from the deadbeats, those who have not paid a dime in RE taxes and have gotten away with not paying for years.

When it comes to uncollected taxes, the Real Estate Tax produces the biggest numbers. With delinquencies that date back more than a decade, it is clear that some of that money will never be collected, but the list of the city’s biggest tax delinquents includes some very recognizable corporations and individuals who would appear to be able to pay their fair share.

Philadelphia must do more to collect revenues from individuals and businesses who "choose" not to pay what they owe the City. Improving enforcement and increasing the penalty for non-compliance will allow the City to finance tax reform and lower the burden faced by all Philadelphia residents and businesses.

While other counties in PA take a year or two, at most, to collect unpaid taxes, Philadelphia lets deadbeats get away with decades of non payment. Why? This is absolutely unacceptable and needs to change.

Sign the petition urging the city to get involved on collecting the $472 Million currently owed.

Petition: The Governor of PA: Collect the $472 million Owed Philly in Overdue Property Taxes | Change.org

[seand]

Sign the petition. But AVI is just a way to assess, the city's crappy job at collection is sort of unrelated. They would need less revenue if they were not so monumentally bad at collection but if your house is worth $500k, your taxes should reflect that and be proportionally more than someone whose house is worth $120k.

[raider.adam]

With all the recent AVI news in the media lately, I am surprised that there has been no mention here. I wonder why?

Because you didn't read the rest of the board.

[EJW]

Sign the petition. But AVI is just a way to assess, the city's crappy job at collection is sort of unrelated. They would need less revenue if they were not so monumentally bad at collection but if your house is worth $500k, your taxes should reflect that and be proportionally more than someone whose house is worth $120k.

My understanding was that AVI, as proposed by Nutter, is built to include $95M of additional revenue from RE taxes. So assuming that is still the case, these two issues are inextricable - in my eyes. Out of principal, the mayor cannot ask the individuals who do pay taxes to shoulder additional burden BEFORE the city gets the $470M owed to it by tax deadbeats.

But yeah, the necessity of a fair assessment process cannot be denied (unless of course you are one of those lucky people who pay like $100 a year). If AVI were ACTUALLY revenue neutral, I think you may have a point, although arguments can be made over exactly how the city is doing the assessing...

[seand]

My understanding was that AVI, as proposed by Nutter, is built to include $95M of additional revenue from RE taxes. So assuming that is still the case, these two issues are inextricable - in my eyes. Out of principal, the mayor cannot ask the individuals who do pay taxes to shoulder additional burden BEFORE the city gets the $470M owed to it by tax deadbeats.

Thats what the mayor wants and City Council wants at least 5 other things right now - with Green's proposal to make AVI neutral for homeowners but to get the extra money by jacking taxes on commercial property owners looking the most likely. Not all of that $470M is recoverable. You can't get back taxes that exceed the value of the land from an abandonned lot with a clouded title, for example. Nor could you sell every tax negligent property at once, but you sure could stop any more from going into arears.

But yeah, the necessity of a fair assessment process cannot be denied (unless of course you are one of those lucky people who pay like $100 a year). If AVI were ACTUALLY revenue neutral, I think you may have a point, although arguments can be made over exactly how the city is doing the assessing...

And that it would be better to have the assessments now before Council has to approve a budget, as opposed to 2.5 months after.

[GraduateFamily]

His house won't be worth $500,000 once the taxes go up...I wonder if you can figure out how much less homes will be worth once AVI kicks in, and base the revised taxes on the "real" market rate. For example, our taxes are $1900 based on a market value of $350,000. Based on that market value, our taxes will be rising to roughly $4500 (at least) which ironically, means our house is probably worth closer to $250,000 in terms of our home's real market value.

I don't think we'll be staying if taxes go up the minimum, or 1.25% of "market" value. The City services we receive are not worth what we pay now but we've stayed because we like our house and neighborhood. And, for what it's worth, I don't credit the City for one dime of our home's increase in value since we moved to Graduate Hospital 15 years ago. We used to take our first child on sleeping tours where we would write down the license plates of abandoned cars, and report them (over, and over, and over again...) We picked up tons of garbage over the years. We posted "Wanted" posters of slumlords on the vacant properties on our street. The changes that have occurred in our neighborhood were due to citizens tired of living in "Escape from New York."

At the end of the day, the cost-benefit of staying declines dramatically with a substantial tax increase, particularly when you consider that even if AVI raises $200 million, the City is just shifting deck chairs on the Titantic unless the feds and state kick in cash on a reliable basis. As it stands, even with a tax increase of just 200%, our kids still won't have schools to attend, the streets will remain filthy, and the law will continue to be applied only to the unfortunate few who actually pay their taxes.

[LT4]

I am sorry for not being more explicit.

I am particularly interested in how it will affect our neighborhood. I know the fairmount board is active... But ours hasn't been lately.

There what have been posts in the past, but I didn't see one recently (after a few stories on Philly.com)

[seand]

His house won't be worth $500,000 once the taxes go up...I wonder if you can figure out how much less homes will be worth once AVI kicks in, and base the revised taxes on the "real" market rate. For example, our taxes are $1900 based on a market value of $350,000. Based on that market value, our taxes will be rising to roughly $4500 (at least) which ironically, means our house is probably worth closer to $250,000 in terms of our home's real market value.

Your market value won't drop nearly that much from AVI and even if it does, they reassess by law in 4 years or you appeal. Thats the good thing about AVI, you can use three nearby comparables to appeal a bad assessment. If houses are actually selling for less, thats what you appeal and get your assessment based on.

The lady in that story bought a 10-year-abatement as if it was a forever-abatement. You can blame the city for its stupidity. You can't blame it for that kind of stupidity.

[seand]

I am sorry for not being more explicit.

I am particularly interested in how it will affect our neighborhood. I know the fairmount board is active... But ours hasn't been lately.

There what have been posts in the past, but I didn't see one recently (after a few stories on Philly.com)

And why would it be different - per se. Fairmount, or some parts, got fixed up earlier so less active 10-year abatements but gentrification/raising home values is gentrification/raising home values - across the city.

Many of us in rapidly gentrifying neighborhoods have gotten a deal, some of our longer term neighbors have gotten a huge deal, a lot of people in NE and declining neighborhoods have been overpaying for even crappier schools and streets for a long time and gotten stiffed. Whats wrong with paying proportional to what a house is actually worth? Assuming we all want to get more of the deadbeats.

[nuosc]

Might use the search option. There lots and lots of threads about the topic.
The city not doing a better job of collecting from property tax deadbeats stinks. Assuming the new assessments are fairly accurate I'm not sure its fair to say that taxes calculated on actual comparable sales is anything other than fairer than what we have now. For every person that goes up there are probably 5 who are going to go down.

The math doesn't really work if it was 5-to-1 going down versus up. The tax increase (oops, sorry, I mean `re-assessment') will raise $95M or so, and while I don't know the shape of the current tax distribution, it seems hard to imagine you could shift the mean revenue upward by $95M while moving the median so far downward to accommodate 5-to-1. In fact, I think it would be hard to even have it break even and raise $95M.

On the other hand, for any of us who moved in to renovated properties that haven't been assessed in a while, a tripling or quadrupling of our property taxes looks reasonably likely, and maybe that is enough to yield an equal number of people with lower taxes even while providing the extra $95M. I guess we'll see.

[seand]

The total revenue the city expects to get from real estate taxes, AVI or no AVI, is around $900 million. Whether the $94 million comes from there or some other tax, or yet more schools get shut down, more quickly is not what is going to cause anyone's individual taxes to double or triple, its that they have been in effect stiffing five or ten other taxpayers that have been overpaying for years. Its no different than if you broke into their house and took the money yourself. The sense of entitlement on this topic can be shocking.

By the same token, all those people who have been not paying for decades can be thought of as taking the money directly from all of us, in both neighborhoods that are over valued and under valued currently.

[GraduateFamily]

Sean, unfortunately, your optimism is not contagious. Like the Zoning Board, the BRT are appointees with no particular expertise and no vested interest in the appointment except to stay appointed. I have as much faith in a fair hearing from the BRT or OPA or whomever would hear my appeal on a bad assessment as I do in the City's criminal justice system (which appoints the members of the BRT.) Bottom line is that for us, at least, what the City has to sell isn't worth the price they plan on charging.

[seand]

And you are different from those who have been overpaying to live in even crappier neighborhoods for the last 20 years on that front how exactly?

Why is your suffering worse than theirs? Or mine?

Paying taxes suck. Having police and fireman and parks and sewers and schools is nice. Thats the way of the world.

On the bad side, if you live in an improving neighborhood your taxes will go up. On the good side, so will the taxes on the one hold-out drug house, by a lot more than yours do.

[GraduateFamily]

Sean, I am not complaining. I am just not willing to pay 200% more for absolutely nothing, particularly when the likelihood that AVI will be done in a fair and equitable manner would be a unique circumstance in the history of the City of Philadelphia. Having a low assessment bought us low to no service. Having a high assessment will buy us low to no service. For us, it's just not worth it.

[seand]

What it bought you was some very expensive pension debt that City Council didn't pay for for decades while it also did not push for fixing property taxes, either in assessment or collection. I fail to see how bitching about finally fixing assessment changes the other two problems, collection or crippling pension debt.

[GraduateFamily]

With regard to the "one hold out drug house" being forced out by a tax increase, that supposes the City will figure out a way to foreclose on properties that don't pay their taxes. Currently, it takes eight months for a property to go to Sheriff's Sale and several years, if ever, before the foreclosure process begins. Once it does begin, the lowly assessed property in the "gentrified" neighborhood has the ability to pay one-half down up until the day before the sale, and an "arrangement" to pay the rest. However, if payments are not made on time, and assuming that the City discovers that the agreement has been breached, you can enter into another agreement. A house can hold off foreclosure for years...AVI is not intended to fix a broken system and will not indirectly improve anything. It is intended to make money. An example would be if AVI was a fancy sports car, and the old assessment system a run down jalopy, but there still isn't anyone who knows how to drive...