For Immediate Release:
May 8, 2013
Contact: Harvey Rice
Butkovitz Says New Property Assessments
More Inaccurate than Current System
City Controller’s independent study authored by economics professor Dr. Robert Strauss found full-value initiative did not improve accuracy, uniformity & fairness
PHILADELPHIA – City Controller Alan Butkovitz today released an independent review of the City’s 2014 full value reassessment that indicates the actual value initiative (AVI) did not improve accuracy, uniformity and fairness.
The Office of Property Assessment’s 2014 taxable property values are highly variable in quality, which is well beyond the standards set by the International Association of Assessing Officers (IAAO), according to the independent review conducted by Dr. Robert Strauss, a Professor of Economics and Public Policy at Carnegie-Mellon University.
The IAAO recommends that the variability, which is actual value of property in relation to the median sales in a selected area, should not be higher than 15 percent. Dr. Struass found that residential properties actually rose from 82 percent for the 2013 values to 112% for the 2014 proposed values under AVI.
“This report clearly shows that the OPA full value reassessment is actually more inaccurate than assessments under the current system,” said Butkovitz, at today’s press conference. “AVI was supposed to do just the opposite – bring property values closer to their market values.”
The review also found significant evidence that more expensive taxable properties are assessed at lower levels than less expensive taxable properties. The study shows that as zip codes become more African American, the median level of residential assessment rises. As zip code areas become more Caucasian, the median level of residential assessment falls.
“The results raise real, serious important questions for any citizen of Philadelphia,” said Dr. Strauss. “There are lots of reasons to get this right – in the short run, and the long run.”
“This review parallels the very concerns that were raised by numerous people across the city,” said Butkovitz. “I felt it was my Office’s responsibility to evaluate the data to determine whether the citywide reassessment was fair and accurate.”
In addition, the review found that data is missing on crucial property characteristics including the following:
• 97 percent had no floor plan data,
• 30 percent of residential properties are coded as having zero stories or the number of stories is missing,
• 26 percent were missing the total number of rooms in properties
“A reassessment that relies primarily on statistical modeling is only as good as the data about property characteristics that are used to predict the 2014 assessed values,” said Butkovitz.
“Clearly, this initiative has not performed a credible job of improving assessment accuracy, uniformity and fairness,” said Butkovitz.
To view the report entitled, “A Sales Ratio Study of the 2013 Certified & 2014 Proposed Real Estate Assessments – City of Philadelphia,” please visit the City Controller’s website at www.philadelphiacontroller.org