Philadelphia Property Tax - Two Different Stories

There are currently two very different views regarding what is going on with the Philadelphia property tax reform Actual Value Initiative (AVI). At stake is the largest tax reform in recent Philadelphia history and hundreds of millions of dollars.

The Office of Property Assessment and local real-estate expert Kevin Gillen argue that the new assessments are more accurate and more progressive than the old ones.

The Controller's Office argues that new assessments are less accurate and less progressive than the old ones.

An additional complication is that there is a heated primary race for the position of the Controller - so some are treating the AVI as a matter of politics. For instance, my residence got a flyer that charges the incumbent controller with lying about the AVI. Most people don't analyze data themselves - they rely upon trusting other people to run the numbers for them. But now it is hard to trust someone who is your political opponent.

The Office of Property Assessment has not released the data it used to make its assessments or the criteria that it used. This is terrible as it does not allow anyone to verify their findings. It has released part of the data. The Controller's Office has used this partial data to come up with a dramatically different conclusion (and I've verified some of their findings using the same data).

I was planning on writing a report about how the Philadelphia Property Tax system discriminates against low-income, black and hispanic residents but then I ran into this data quality issue. I don't trust the data. So I looked at properties in my neighborhood and found a large number of cases where the last sales price for a house was very low. It looks like the released version of the OPA data included a large number of foreclosure sales without identifying them as such. By contrast, their internal data includes the seller's name -- enabling them to detect bank sales.

I still think there might be a bias against low-income residents. I'm guessing that the OPA over-estimates the quality of low-valued houses and under-estimates the amount of improvements in high-valued houses. However until the OPA releases their full data set (and ideally methodology as well), it is hard to say what is going on!