Following two years of property assessment increases and tax hikes for hundreds of thousands of Philadelphia homeowners, values will remain largely unchanged for 2021.
Mayor Jim Kenney’s administration decided this month not to complete a planned reassessment, which would have been finalized in March.
Rob Dubow, the city’s director of finance, said assessments are based in part on trends in the real estate market, but the city had questions about the accuracy of the method it had planned to use to value properties. So, instead, the values assigned earlier this year will simply “carry forward” through 2021.
For property owners, that means that 2020 values, for which they received notices in April and tax bills this month, will also be used to calculate their 2021 tax bills. In cases of renovation, new construction, errors, or expiring 10-year tax abatements, the assessments will still change.
The Office of Property Assessment will complete its next citywide revaluation next year, to take effect in tax year 2022, Dubow said.
“There will be accurate assessments for ’22,” Dubow said. "And they’ll capture where the market is.”
But the lack of reassessment does not necessarily mean that property tax bills will remain the same; that will depend on whether Kenney proposes a tax rate hike as part of next year’s budget, and whether City Council votes to approve it in June.
The decision not to reassess properties for 2021 comes at the end of a year in which OPA faced ongoing scrutiny and criticism from residents and City Council members. The median value of a single family home in the city increased 10.5% in 2019, resulting in tax hikesfor hundreds of thousands of homeowners. The median value climbed by another 3.1% under the 2020 assessments.
An independent audit commissioned by City Council and released in January found flaws in the city’s assessment practices. While the Kenney administration has defended OPA, the mayor gave in to calls from Council to replace the agency’s embattled leader; the search for a new chief assessor is ongoing. In July, a judge ruled that the city and School District must repay nearly $50 million in taxes because OPA unconstitutionally targeted commercial properties in a 2018 reassessment. (The city has appealed that ruling to Commonwealth Court.)
Next year will mark the first time since 2014 that new values will not be assigned to at least some categories of Philadelphia properties, when the city overhauled its assessment system and began the Actual Value Initiative to value property at 100% of its market value, or the amount for which it could sell.
OPA had planned to use a so-called trending methodology to complete a 2021 assessment, which would have been completed by the end of March. That method, which was also used to assign 2020 values, involves studying trends in the real estate market and applying them to geographic zones in the city.
The administration announced in January, in response to City Council’s audit, that it would use trending methodology for 2021 because it would free up assessors’ time to work on other needed improvements at OPA. Dubow said the trending work for 2021 had been about 90% complete when OPA determined that it would not meet industry standards for accuracy.
“If you build on it by doing [trending] multiple years then you run the risk of having the kind of anomalies we saw," he said.
Without a revaluation to complete, OPA will instead spend more time implementing a long-delayed technology project known as Computer Assisted Mass Appraisal (CAMA). It is on track to go live in February, Dubow said. That will allow the agency to complete mass appraisals for 2022 instead of using the trending method.
Most other large cities already have CAMA systems, which make the assessing process more effective and allow for easier communication between city departments. The city paid about $9 million for a contract with Texas-based Tyler Technologies to implement the new system.
OPA has also worked on other improvements this year, as recommended by a consultant hired after City Council released its audit. Dubow said OPA hired a few more employees to work on its modeling team to improve accuracy, and the city will soon select a vendor to improve accuracy of OPA’s tracking of building condition and construction quality — two factors that affect the value of a property.
By the time the city completes its 2022 assessment, Dubow said CAMA should be in place and the other improvements complete. OPA will also likely have a new chief assessor; Dubow said he hopes to hire someone in the first half of next year.