Philly to scale back assessment plans as it improves practices, mayor’s office announces
Property owners who may be paying more than their fair share in property taxes could have to wait years for relief while the city attempts to improve its assessment practices and implements a long-delayed computer system.
Philadelphia will not undertake another major reassessment of all its properties until it implements needed changes in its Office of Property Assessment, Mayor Jim Kenney’s administration said Tuesday in response to an audit that found flaws in the city’s assessment methods.
That means property owners who may be paying more than their fair share in property taxes could have to wait years for relief, while the city’s politicians argue about who should run the Office of Property Assessment and while necessary improvements — such as a long-delayed computer system for the assessments — are implemented.
While the mayor’s office acknowledged Tuesday that some changes are needed, OPA remains at the center of a political feud between Kenney and Council President Darrell L. Clarke, who called last week for a change in OPA leadership and the hiring of an outside company to help improve assessment methods. The Kenney administration, meanwhile, simultaneously disputed the results of the audit commissioned by City Council and announced an improvement plan for OPA.
Delaying a mass appraisal does not mean values will remain frozen. OPA will halt an assessment project already underway and instead will issue new values for properties this spring based on market trends, “in an effort to keep property values tied to the market while OPA implements the expert recommendations.” New market values issued this spring will be used to calculate real estate tax bills in 2020.
OPA has faced mounting scrutiny since a revaluation of all residential properties released last spring increased the median value of a single-family home by 10.5 percent. Many homeowners received steep increases in their assessments, with thousands receiving 2019 tax bills that are more than double the amount they were previously billed. An Inquirer and Daily News analysis found that more than 35 percent of single-family homes are overassessed, which means their owners are paying more than their fair share in property taxes.
An audit commissioned by City Council and released last week found that assessments for residential homes are off by an average of 20 percent and determined that the city’s assessments do not meet industry standards. Along with a list of its own recommendations for reforms for OPA, Kenney’s office released a 28-page report Tuesday disagreeing with many of the audit’s findings and defending the city’s practices.
The mayor’s office also hired its own consultant to review the audit and make recommendations for improvement.
Both the expert hired by City Council for the audit and the consultant hired by the mayor’s office appear to agree, however, that OPA bases assessments on insufficient and sometimes erroneous data, lacks routine reports to analyze the quality of assessments, and does not adequately explain its methods to the public.
Robert Gloudemans, the consultant hired by the mayor’s office, wrote in his report that OPA has made “huge improvements” in recent years. Yet he noted that the audit, completed by J.F. Ryan Associates Inc., “is realistic in its forthright description of the current situation and remaining deficiencies.”
Both experts hired to weigh in on OPA practices suggested that the city could improve property valuations by implementing a Computer Assisted Mass Appraisal (CAMA) program. Officials first contracted with a company to launch such a system in 2006; the city has since spent millions of dollars on various contracts and years of delay. The CAMA system is currently expected to launch in early 2020, OPA said in its response to the audit issued Tuesday, and will be used for 2021 assessments.
Implementing CAMA will be a daunting task, Gloudemans acknowledged in his report.
“How is OPA to properly implement needed improvements and the new CAMA system on top of its everyday work commitments?” Gloudemans wrote. “Some breathing time is needed to address these legitimate concerns.”
Gloudemans suggested that the city suspend revaluations — as well as appeals — for one year and launch the next mass revaluation effective in tax year 2022.
The Kenney administration said it would not suspend appeals and did not commit to a timeline for its list of reforms, stating that the city “will resume mass assessment valuations when the above recommendations have been completed.”
Among those recommendations that OPA said it intends to implement:
Establish a team to validate sales upon which assessments are based.
Hire more staff with expertise in data analysis, appraisal, and computer systems.
Assign construction-quality grades and condition codes to both residential and commercial properties. Those designations are not currently noted in the city’s assessment process.
Develop a better public explanation of the assessment process and publish reports analyzing assessment accuracy.
The fate of the city’s chief assessment officer, Michael Piper, whose term expired in June, remains in limbo. Under the city code, the mayor appoints chief assessment officers to four-year terms, and the appointments must be approved by a majority of City Council members. Kenney’s office submitted a resolution to reappoint him to another four-year term, but no council member has introduced it for a vote.
The Kenney administration’s response to the audit did not address Clarke’s demand to replace Piper. A spokesperson for Kenney said last week that it would be unfair for OPA’s leaders to become political scapegoats.