Low-income neighborhoods close to gentrified areas of West Philly see biggest spikes in property assessments

City property assessments are rising most rapidly in a handful of low-income neighborhoods that are near heavily gentrified areas in West Philadelphia, according to an Inquirer analysis.

Homeowners in Kingsessing and Parkside this year will see some of the sharpest spikes in their real estate assessments, which the city uses to determine property tax bills. In Kingsessing, the average assessment increased just over 50%, the highest increase of any neighborhood in the analysis, which was focused on single-family homes and was based on data the city posted online Wednesday.

But for now, tax bills will remain relatively low for most homeowners in those neighborhoods, at less than $500 for many residential properties. That’s because property values are lower there than other parts of the city and because City Council this year increased the homestead exemption tax break so that owners of homes worth less than $100,000 owe nothing.

Preventing the displacement of Black and brown neighborhoods by gentrification is a major priority for local elected officials in Philadelphia, which has an unusually high number of low-income residents who are homeowners.

The real estate boom over the last 20 years in the neighborhoods that form a collar around Center City has dramatically reshaped the city, and the new city assessment data is the latest indication that market pressures are extending further out from places like University City, Fishtown, and Brewerytown.

In the census tracts where assessment growth was higher than the city average, 58% of residents are Black, and 25% are white, the analysis found. (Overall, Philadelphia is 40% Black and 37% white.)

“Homeowners who have the lowest income by far are Black and brown people, so we could not sit by and let people be displaced essentially by the city and their tax assessment process,” said City Councilmember Jamie Gauthier, who pushed for tax relief measures during city budget negotiations. “The whole reason why I ran for Council in the first place is because I’m from the district and I’ve seen the changes that have been happening in terms of gentrification and displacement.”

The new valuations are the result of the first citywide reassessment since 2022. Consequently they capture two years of growth in the real estate market, likely resulting in sticker shock for many. The city on Wednesday started mailing out notices to property owners.

» READ MORE: Philly’s new property tax assessments are out. Here’s everything you need to know about your bill

Mayor Cherelle L. Parker announced Monday that the tax bill for the average homeowner will increase about $330 to about $2,300 — assuming they are signed up for the homestead exemption, a free program that reduces the assessed value of owner-occupied properties by $100,000.

The tax bill for the average residential property without the exemption will increase by $614, according to an administration document obtained by The Inquirer.

The property tax rate is 1.3998% of assessed value.

Northeast Philadelphia was also hit hard by the new valuations, with a 31% average increase in assessments in Frankford and a 26% average jump in Somerton. The increasingly diverse part of the city saw similar increases in neighborhoods across the socioeconomic spectrum.

Residents of tony Chestnut Hill, meanwhile, will see the highest increases in their tax bills in terms of dollar figures. Many homeowners there will pay $1,500 more than last year due to a 19% average increase in assessments in an area where property values are already high.

Concerned about rising assessments, Council President Kenyatta Johnson this spring led an effort to increase the homestead exemption, which was previously $80,000, and he embraced Gauthier’s new program, a tax freeze program for low-income homeowners.

The Kingsessing neighborhood, where assessments are spiking most severely, is on the border of their districts in Southwest Philly.

Johnson said it’s “imperative” that the city educate residents about how to sign up for relief programs.

“Any time an individual receives an increase in their taxes, it’s always a concern because we live in the No. 1 big city in the country when it comes to poverty,” Johnson said. “It’s going to be imperative that we make sure that our constituents that we represent have access to all of the tax relief measures that we have implemented.”

Over the last decade, Philadelphia’s property tax rolls have become much more accurate and its appraisal processes more professionalized thanks to a reform effort started under former Mayor Michael A. Nutter.

But as is the case in jurisdictions across the country, Philadelphia’s assessments are biased against Black and low-income homeowners. Although it is illegal for the city to take race into account when valuing properties, systematic biases in standard assessment practices lead to over-assessments in poorer neighborhoods where Black and brown people are more likely to live and under-assessments in wealthier, whiter areas.

“The city is definitely increasing its accuracy, but in lower-value neighborhoods and African American neighborhoods like North Philly, lower-value properties are more likely to be over assessed than higher-value properties in whiter neighborhoods,” said Montgomery Wilson, an attorney with Community Legal Services. “A homeowner who is African American and lives in a property worth $100,000 has more reason to wonder whether they are being overassessed than someone who is white and lives in Chestnut Hill.”

Property owners who believe their assessments are too high can file an appeal with the Board of Revision of Taxes by Oct. 7. They can also request an informal First Level Review with the Office of Property Assessment.

That Oct. 7 deadline is established in state law, and property owners this year have a relatively short two-month period to appeal because the city was four months late in releasing the reassessment numbers.

Finance Director Rob Dubow said Monday that the delay was caused by OPA needing to finish studies that verify the assessments meet industry standards for fairness and accuracy and to allow the city to develop outreach programs aimed at making more property owners aware of the city’s tax relief programs, such as the homestead exemption.

Peter Kelsen, a real estate attorney with Blank Rome, said he expects most commercial property owners won’t have a problem meeting the deadline. But he’s concerned about individual homeowners, who may not realize there is such a quick turnaround.

“For the business community and property owners that are pretty well versed with the process, there’s time to file the appeals,” Kelsen said. “Where I worry, frankly, is all the single-family residential owners that are not as familiar with the process. Will they understand what the deadlines are and be able to get the paperwork in?”