New Report Shows Unintentional, Systemic Bias in Philadelphia Property Assessments
Today, Community Legal Services of Philadelphia (CLS) announced the publication of a new report, “Examining the Accuracy, Uniformity & Equity of Philadelphia’s 2023 Real Estate Tax Assessments.”
The report, commissioned by CLS, and researched and authored by the Reinvestment Fund, in partnership with CLS and the Center for Economic Policy Analysis (CEPA), examines data from the Office of Property Assessments (OPA) and contains analysis that finds statistical evidence of unintentional, systemic bias in some residential assessments done by the OPA. These value assessments matter because they determine the value of each home, and ultimately the dollar amount of the tax bill that will be mailed out to homeowners each year.
For many years, homeowners have come to CLS complaining that their property tax bills had increased dramatically and that the valuation of their home by the OPA is inaccurate for a variety of reasons. Homeowners often complained that their assessment was significantly different from their neighbor’s assessment – despite living in nearly identical row homes just down the block and they often wondered if these problems were more frequent in Black and Hispanic neighborhoods.
These types of complaints skyrocketed in 2023 when new City-wide valuations were done for the first time since the pandemic and residential assessment increased by an average of 31%. Many CLS clients saw much higher increases in their tax valuations, including one CLS client, Sandra Carter, whose assessment rose from $90,000 dollars in 2020 to just over $513,000 dollars in 2023. Every single one of these clients was concerned with keeping their home, and many of them wondered if their valuation was fair and accurate.
The analysis, conducted over the last three years, sought to determine if CLS clients’ experiences were part of a larger pattern of unintentional, systemic bias in residential assessments, as evidenced by statistical data.
The report found that the accuracy of residential assessments by the OPA, which ultimately determine people’s property tax bills, has significantly improved in recent years.
“It is likely that the OPA is more accurate now than it has ever been,” said Monty Wilson, Supervising Attorney at Community Legal Services. “Much of the credit for this improvement goes to James Aros, the City’s Chief Assessment Officer, and his staff at the OPA, whom we met with several times while working on this Report, and who took our concerns seriously.”
However, the analysis also demonstrated that there is still work to be done and problems to be faced, including that:
- There are “hotspot” neighborhoods in Philadelphia where property assessments are not sufficiently accurate, or uniform based on professional standards set by the International Association of Assessing Officers.
- Within these “hotspots,” residential assessments by the OPA are more likely to be inaccurate and non-uniform; and these mistakes are more likely to happen in lower-income Black and Hispanic neighborhoods in North and West Philadelphia.
- Even within these “hotspot” neighborhoods, if you own a higher priced home in these neighborhoods, you are more likely to be under-assessed; if you own a lower priced home, you are more likely to be over-assessed.
- This means that within these hotspots, the owner of a lower priced home in a predominately Black or Hispanic neighborhood will sometimes pay more than their fair share when compared to their neighbor down the street with a higher value home or in a White neighborhood.
Due to these findings, CLS issues the following recommendations to the City and City Council:
- Commission an annual Racial Equity Study by an independent third-party to test for systemic bias in residential assessments and recommend appropriate reforms.
- Develop an action plan for evaluating each step of the OPA’s assessment process for systemic bias and identifying remedial steps.
- Increase transparency by publicly releasing all data used to determine individual property assessment valuations.
- Increase transparency by making the OPA’s methodology determining property condition grades publicly available.
- Ensure that no sales of properties with tax abatements are included in the data used to determine property valuations.
- Convene a stakeholder group including representatives from OPA, City Administration, City Council, legal services organizations, and other interested parties to participate in developing the action plan to remedy the systemic bias in assessments and develop and implement a public awareness campaign about the importance of a strong and uniformly administered property tax system.
- Commission a similar study of Philadelphia’s assessment appeals system run by the Board of Revision of Taxes (BRT). Just as city residents need a clear understanding of OPA and its work, so also do they need an understanding of BRT.
In response to the report, Mayor Cherelle Parker announced the formation of an Equity Assessments Task Force, which she has charged with examining the City’s own system for setting property values and offering solutions to promote equity and accuracy in the property assessment system.
This is especially important right now since new residential assessments for 2025 are coming soon and it is likely that many homeowners will see an increase – making it even more important that the City takes steps to ensure that the assessment process is fair and accurate.
Said Community Legal Services Executive Director Debby Freedman, “We are grateful to Mayor Parker and her administration for its commitment to fairness in property tax assessments. Her careful consideration of the assessment equity report and recommendations made by CLS and The Reinvestment Fund, and the formation of this task force, is an important first step to ensure that no homeowner pays more than their fair share. CLS is proud to be included in this process and we look forward to continuing to work with the Mayor, City Council, and James Aros and the OPA on ways to address this legacy of systemic racial and ethnic bias in Philadelphia residential assessments.”
About Community Legal Services of Philadelphia: CLS’s mission is to Our mission is to fight poverty, challenge systems that perpetuate injustice, and change lives through cutting-edge advocacy and exceptional legal representation.
Since its founding in 1966, CLS has provided free civil legal assistance to more than one million low-income Philadelphians. Almost 13,000 clients were represented by CLS in the past year. CLS assists clients when they face the threat of losing their homes, incomes, health care, and even their families. CLS attorneys and other staff provide a full range of legal services, from individual representation to administrative advocacy to class action litigation, as well as community education and social work. CLS is nationally recognized as a model legal services program.
