The Kenney administration is forgoing a citywide property reassessment for the upcoming tax year, ensuring the bulk of property taxes will remain flat as home values soar in Philadelphia.
The coronavirus pandemic disrupted the city’s ability to conduct citywide property assessments for tax year 2022, leading officials to delay the reassessment for another year, City Chief Assessor James “AJ” Aros Jr. said. The delay also allows the city more time to upgrade to its new computer system.
“When looking at everything, we thought it would be a better idea to wait one more year to give us a little more time to complete the reassessments … due to the unanticipated effects that the pandemic had on the office,” said Aros, who took over the role earlier this year.
This marks the second year in a row that the Kenney administration did not conduct property tax reassessments. New property assessments can result in property tax increases or decreases depending on changes in market values, among other things.
The city’s property tax rate is 1.3998% of the assessed property value. Property tax bills are typically sent out in December and are due March 31 of each year.
The city will conduct property assessments for certain properties, including new construction, expiring tax abatements, renovations, subdivisions and more. Those properties represent a fraction of the city’s overall properties.
Philadelphia housing prices rose an average of 12.8% in 2020, nearly tripling the city’s historic average house-price appreciation (4.5%), according to a report from Kevin Gillen, an economist at Drexel University.
The last time Philadelphia’s housing price index rose by double-digits was 2006, according to Gillen. The report also found that Philadelphia’s housing price increases were outpacing most other large U.S. cities.
Aros said it was too soon to determine how current market values will affect property reassessments next year. He noted that the city’s property reassessments do take into account market sales.
“It’s just certainly way too early to predict what those numbers will end up looking like,” Aros said, but he added, “The longer you wait between reassessments, the potential for a larger swing either way becomes greater depending on how the market is moving during that time period.”
The last time the city conducted new property reassessments for tax year 2020, property values increased 5% overall and the value of a median single-family home rose by 3.9%.
The Kenney administration continues to overhaul the Office of Property Assessment’s record keeping to the new digital system known as the Computer Assisted Mass Appraisal system, or CAMA. The system, launched in February 2020, has been delayed for years.
Aros expected CAMA to be fully operational in fiscal year 2022. The CAMA system will create a single property assessment database, end the use of some paper documents, and provide a mobile app for property inspectors to use for inspections, among other things.
The Kenney administration revealed in September that it would forgo new property assessments due to the pandemic.
The OPA continues to process First-Level Review requests for property assessment appeals. As of March 1, OPA has made decisions on more than 75% of the 11,728 applications for tax year 2020 and 90% of the 591 applications for tax year 2021, according to a Kenney administration spokesperson.
In 2018, property values skyrocketed 10.5% for a median single-family home for tax year 2019. The property tax increases resulting from those new assessments led city legislators to scrutinize the OPA and its process for calculating property values.
A 2019 report from City Council found substantial inaccuracies and deficiencies with the city’s property assessments, leading to reforms. Chief Assessment Officer Michael Piper lost his job after City Council did not support his reappointment for another term.