Thousands of Philly homeowners are challenging their property values. Lower-value homes are underrepresented.
An Inquirer analysis found equity issues in which homeowners use the appeals system.
Owners of more than 26,000 Philadelphia properties have challenged the city’s real estate valuations following sharp jumps in this year’s real estate tax bills.
But those most in need of help are least likely to appeal.
The appeals process is meant as a recourse for homeowners whose assessments don’t reflect their property’s market value. It requires the city or an independent judicial body to review property values and make adjustments, if warranted. But an Inquirer analysis of this year’s appeals data found that equity issues persist in who makes use of the system:
Owners of higher-value properties are more likely to appeal than owners of lower-value properties.
But owners of lower-valued properties generally have the most cause to file appeals, because they are systemically more likely to be over-assessed — and bear a higher share of the tax burden — in the first place.
Because lower-valued properties are under-represented in appeals, lower-income homeowners miss out on opportunities to correct city data and improve the accuracy of future assessments for them and their neighbors.
These findings layer additional issues on a city assessment process that already has inequities.
The city’s latest round of assessments, released in 2022, resulted in an average increase of 31% across residential properties in the city starting this year. While the city stresses that the assessments met industry standards for accuracy, not every property in Philadelphia is correctly assessed. An Inquirer analysis previously found that the latest assessments were least accurate in low-income and majority-Black neighborhoods across the city.
The Inquirer analyzed appeal data since 2014, when the current system for challenging assessments was put in place. Here’s what we found:
Philadelphia received the most property assessment appeals since 2014
In total, the city received more than 30,000 appeals: about 12,000 to the Board of Revision of Taxes, and about 20,000 to the Office of Property Assessment.
OPA is tasked with assigning values to properties that are used to calculate tax bills. BRT is an independent oversight body that solely handles appeals. About 5,000 appeals were filed to both agencies simultaneously.
OPA decisions can be overruled by the BRT; the reverse is impossible. Homeowners who get the outcomes they seek through OPA’s informal “first-level review” process can withdraw their formal appeals to the BRT.
The city received the highest number of appeals under its current system in 2014, when Philadelphia implemented the controversial Actual Value Initiative and significantly increased property values across the city. Before last year’s revaluation, OPA had last released new values citywide in 2019. The three-year gap resulted in a sharp increase for homeowners citywide.
Such irregular assessments don’t simply result in large spikes — they reduce the likelihood that assessments will be accurate and fair.
The majority of homeowners who appealed this year did so for the first time
Residential properties make up the vast majority of this year’s appeals, and more than half were filed by homeowners who hadn’t challenged their assessments before.
That’s consistent with what attorney Monty Wilson has seen in his work with Community Legal Services, which helps lower-income homeowners put together their cases. The process can be complicated, Wilson said, requiring homeowners to identify comparable properties that were assessed or sold for a lower price. In the case of BRT appeals, homeowners may be required to make their case in person and defend their position before an attorney representing the city.
Wilson said the sticker shock from the new assessments drove his clients to fight back.
Citywide, homeowners who filed appeals experienced sharper jumps in their assessments than those who did not, the Inquirer analysis found. Homeowners who appealed saw an average percentage increase of about 41%, compared with about 31% overall for residential properties in the city.
Owners of lower-valued properties were less likely to appeal — even though they have more cause to
Although 55% of residential properties in Philadelphia are valued under $200,000, those properties make up only 36% of the property appeals submitted to the city.
That’s particularly notable because owners of lower-valued properties were more likely to have cause to appeal. A previous Inquirer analysis found that lower-valued properties are more likely to be overassessed, which means their owners generally shoulder more than their fair share of the tax burden. By contrast, higher-valued properties are more likely to be underassessed, which means the city is under-taxing them already.
The Board of Revision of Taxes said low-income homeowners might not appeal because of tax relief programs that limit increases to their tax bills when their assessments increase. Last year, officials beefed up the city’s most popular relief option, the homestead exemption, in an attempt to offset their soaring assessments. (Many homeowners still stand to lose money by enrolling in the wrong program.)
“Many homeowners that have the homestead exemption forgo an appeal if they believe the market value is slightly off,” a BRT spokesperson said. Appellants are sometimes asked in hearings whether they have the homestead exemption, prompting some to withdraw their appeal if they can reduce the tax bills through exemptions instead.
But the city’s chief assessor tells residents to appeal anyway. It’s not just about the current tax bill.
When homeowners enrolled in relief programs transfer deeds to relatives, or become ineligible for tax relief for any reason, they’ll reap the benefits of making sure their assessments are accurate, said James Aros Jr., the city’s chief assessment officer.
And the appeal can help the city get more accurate data, which also helps them assess other properties in the neighborhood.
“We do get some improvement in our data as properties file [appeals],” Aros said, “because if someone is filing and they feel that there’s an inaccuracy in their favor, they’re going to try to bring that to our attention.”
Homeowners are more likely to appeal to the Office of Property Assessment than the Board of Revision of Taxes
This year, the city officials encouraged owners to maximize their chances of success by filing appeals with both agencies, but only about 5,000 applicants did — consistent with what the city has seen in previous years, Aros said.
The OPA appeals process is simpler and doesn’t require applicants to make their case at a hearing, and it attracts the most applicants each year. The application and live hearing portion of the BRT process is a time commitment.
But the BRT is far more likely to accept an appeal than the OPA is. Councilmember David Oh advises constituents to skip OPA altogether.
“I find it useless,” Oh said of the OPA appeals, adding that homeowners should focus on the most effective route.
Since 2014, 65% of BRT appeals resulted in a reduction in property assessments, vs. 26% of cases before OPA, according to an analysis by the Pew Charitable Trusts.
That may partly be because the BRT process requires more detail than OPA’s does, said Aros: “If you’re going to the BRT and you’re going to the panel, you’re going to come more prepared to make an argument.
Most people don’t know much about their appeal options, and when they do, they may not know how to make their case, said Wilson, the Community Legal Services attorney.
“You need to know what counts as evidence of my assessment being high, what to say in [to OPA], what to say when you get before the Board of Revision of Taxes,” he said. “It’s not a question of saying my assessments are too high.”
Both OPA and BRT have begun resolving appeals and will continue for months.
The Philadelphia Inquirer is one of more than 20 news organizations producing Broke in Philly, a collaborative reporting project on solutions to poverty and the city’s push toward economic justice. See all of our reporting at brokeinphilly.org.