Philadelphia's first citywide revaluation in decades inadvertently under assessed land values for 69% of the city's residential properties, according to a new report.
The city once again is planning a revaluation of all commercial real estate, scheduled to begin next year. It's unclear whether the same problems with under assessed land will be an issue for commercial properties.
Philadelphia's Actual Value Initiative (AVI) had the goal of valuing homes and businesses at 100% of market value, making assessments more fair, accurate, and uniform.
However, chief assessment officer Michael Piper said AVI has proven inaccurate when assigning value to the land portion of real estate. "We had problems in some areas - in fact a lot of areas - where the land portion of the assessment didn't look like what the market was showing us it should be," Piper said.
Despite the underassessment of land, the revaluation has resulted in an additional $2 billion in total assessed value and an additional $31 million in property tax revenue.
To keep values current, Philadelphia would like to revalue all properties every year. The city plans to spend over $7 million on new software that will make annual revaluations possible.
Once the new system is up and running in 2018, officials anticipate property tax revenues will increase about 3% annually through 2020.