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Would AVI gentrification protection bail out Rittenhouse gentry?
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Would AVI gentrification protection bail out Rittenhouse gentry?
Yesterday, Philadelphia City Council passed a bill designed to protect residents from the full force of gentrification if and when the mayor's Actual Value Initiative (AVI) goes into effect.
The bill will go a long way to reduce the impact of AVI on some neighborhoods that have seen rapid gentrification, including Fishtown, Mantua, and Spruce Hill.
But it will also reduce taxes for residents of Rittenhouse Square — not exactly the folks you might think of as needing an anti-gentrification bailout.
The bill, which passed out of committee yesterday and has the support of Council President Darrell Clarke, would exempt homeowners of ten years or more from paying taxes on more than three times their current assessed value. In other words, if your property assessment quadruples, you'd only pay taxes on triple the assessment. The idea, of course, is to protected longtime homeowners whose neighborhoods have seen gentrification, the effect of which has been effectively masked by the city's broken and frozen assessment system.
Here's the catch: the exemption makes no distinction as to a resident's home value, income, or other measures of actual wealth and ability to pay.
In other words, while gentrification relief will offer huge relief to folks like lifetime Fishtowners whose property values are about to skyrocket, it will also protect high-income longtime Rittenhouse Square residents — all paid for by an estimated 2% hike in the real estate tax for the average city taxpayer.
Here's the breakdown:
According to numbers supplied to Council by the administration, the average residential property in Rittenhouse is valued at about 177K, but really worth about 554k, which would become its actual assessed value under AVI.
Because the value will more than triple (177k X 3 = 531K), the Rittenhouse homeowner qualifies for gentrification relief, and wouldn't have to pay taxes on more than triple the current assessment, or about $23,000 worth of value).
A resident in Central Roxborough, on the other hand, has a current average home value of about $80k, and that value is likely to rise to $233k — just under the cutoff for gentrification relief.
The amount the gentrification relief is allowed to cost is capped at $30 million citywide, so taxpayers will have to make up that difference, to the tune of an increased tax rate of about a two per cent.
That applies to everyone, but the result is that gentrification relief winds up saving money for wealthier Rittenhouse residents and costing money for less-wealthy Roxborough residents — a scenario that doesn't necessarily bring to mind the usual narrative of gentrification displacing low-income residents.
The problem is the current values are not actual values, but politically manipulated, made-up numbers.
Despite it being unconstitutional, city council is trying to keep the fraudulent status-quo alive.— samac- An awful bill.— tsarstruck
- I think a homeowner in Rittenhouse Square would not be eligible for Gentrification Relief, because the proposed relief eligibility criteria reads it is for neighborhoods that are Gentrifying . Rittenhouse Square is not a Gentrifying neighborhood. Graduate Hospital is a neighborhood near Rittenhouse and Graduate Hospital is Gentrifying, so a homeowner in Graduate would be eligible to apply.
Also, the criteria for eligibility requires ten year residency and ownership, that would obstacle a lot of the very expensive properties in Graduate and other Gentrifying neighborhoods from applying and thus reduce the amount of homeowners who should not receive relief, due to a great under-Assessment in prior years.
I strongly approve of a Gentrification relief with No "means testing", because the great number of homeowners in Gentrified neighborhoods who are due this relief far outweighs the few who might get it who are not due it. Also, a means test for income would prevent eligibility for a great many middle income homeowners. They bought their homes many years ago, sometimes more than twenty years; working class homeowners who over the decades have continued to care for their home and the neighborhood while they themselves strove to work themselves up the economic ladder from being low income. The Government should not now punish these homeowners who built the neighborhood and sustained it to be the quality area that the elite chose to move into. It is the expensive homes of the newcomers (most with 10-Year Tax Abatements) that consequent in AVI inaccurate high Assessment of the middle income to low incomes ordinary homes.— emmadan
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