DISCLAIMER: If you’re unfamiliar with the market value appeal process, I recommend you hire / work with someone that has had success reviewing market values and filing market value appeals. If you do file an appeal yourself (even if you hire an expert) - the following steps do NOT guarantee that your appeal will be approved. This information is based on my own individual experience and expertise. Consult with an expert if you have any questions or need assistance.

This blog post is dedicated to anyone that owns property. The title is not an exaggeration. This message is URGENT and if this information is ignored, we as a culture could continue to experience significant negative generational impact.

***Contributor: Kasturi Pananjady & Max Marin Via Philadelphia Inquirer***

If we don’t get in front of inaccurate overassessed market values, if we don’t identify a solution at scale, we could see a significant increase in real estate tax delinquencies and subsequently a significant decline in ownership within our communities. The wealth that we’ve built, that our family has built, that our ancestors built and obtained through real estate could be lost.

***Contributor: Tremain Prioleau II via*** ***https://www.pushblackfinance.com***

***Contributor: Margaret Newkirk via Bloomberg.com***

I encourage you to share this information with anyone that will listen. Whether you are a homeowner, investor, know someone that is, or you currently rent. Regardless of where you are at this information is relevant.

If you’re wondering how inaccurate market values affect homeowners, Investors and renters…here is an example.

Imagine being in the position of both the landlord and tenant:

A property owner became a landlord 5 years ago by leasing his first home out to a new tenant. The landlord lives in North Philadelphia, is paying $1000 annually for real estate taxes, and has been paying the same amount for the last 5 years.

The monthly real estate tax fee calculates to $83.33 and is included in the landlords monthly mortgage payment. The total monthly mortgage and annual tax payment is $1255.

The landlord is currently charging the tenant $1,750 a month for rent. The tenant has been living at the property for the last 5 years and the landlord increases their rent by 7% each year.

The landlord gets a new 2023 Market Value Assessment in the mail showing a drastic increase in market value causing the annual real estate taxes to increase from $1,000 to $6,580 which increases the monthly real estate tax payment to $548.33 and the monthly mortgage from $1255 to $1720.

The tenant loves the house and wants to continue to stay and renew their lease. The landlord wants to maintain the same tenant but due to the recent market value / real estate tax changes, the landlord has to adjust rent from $1750 to $2,450.

This scenario impacts both landlord and tenant significantly…. in this example the landlords market value is actually inaccurate and should be appealed at the Board of Revision of Taxes before the appeal deadline. All of the landlords neighbors with comparable properties did not experience market value increases and their taxes stayed the same while the landlords increased more than 600%.

“Ive been working with homeowners, investors, developers, community organizations and the City of Philadelphia since 2014 to secure real estate tax exemptions for my clients and address inaccurate market values throughout our black neighborhoods. Over the years i’ve compiled a significant amount of data. I’ve realized that despite many efforts to create positive change, we still have so much work to do. This cant be addressed by individual people. We have to create a movement. We have to identify and implement solutions at scale. Our communities are already suffering. We cant continue to unfairly lose site control. We have to stop this cycle. We can stop this cycle. ”

— Alexis Miles

Philadelphia Case Study

Thank you for taking the time to review the first section of this blog about the importance of understanding Market Values and Real Estate Taxes. This is urgent and I am grateful that you’ve taken the time to access the information. I appreciate you!

In this section of the blog, I decided to share some information that I compiled over the years for the purpose of giving more insight into what is going on with market values and real estate taxes in black neighborhoods, specifically in Philadelphia.

Many neighborhoods throughout Philadelphia suffer from unfair assessments but the community I am choosing to highlight in this case study is the neighborhood I personally invest in. The neighborhood is called Tioga and has an 85.5% black population all living amidst vacant houses, stores, and lots. The health of this community has been forgotten where 43 percent live in poverty, $17,052 is the median household income, 45 percent have high blood pressure, 77 percent have high cholesterol, 43.3 percent obesity, 19.3 percent diabetes and 18 percent were unemployed pre-COVID-19.

My partners and I have a large-scale community redevelopment project within this community that we have been cultivating for the last 8 years. Tioga is very special to me and the community has suffered entirely too much. The fact that this neighborhood and its residents continue to be subjected to unfair treatment is urgent. This has to be addressed without it negatively impacting the the existing demographic of the community.

TABLE OF CONTENTS:

THE BASICS
THE PROBLEM
THE SOLUTION
STEPS TO APPEAL
MY CONTRIBUTION
RESOURCES

#1 - The Basics

Based on preliminarily research I found that, “most local governments in the United States impose a property tax, also known as a millage rate, as a principal source of revenue. This tax may be imposed on real estate or personal property. The tax is nearly always computed as the fair market value of the property times an assessment ratio times a tax rate, and is generally an obligation of the owner of the property. Values are determined by local officials, and may be disputed by property owners.” Due to the fact that real estate taxes are based on your properties market value, it’s very important to make sure your market value is accurate. If you notice your value is significantly higher than comparable neighboring properties…research the market value appeal process in your city.

Philadelphia homeowners and investors!!! Please go to www.property.phila.gov, type in your property address and review your Market Value / Taxable Land Values for 2023 and all years prior!

#2 - The Problem

The problem is there are a significant amount of inaccurate market value and taxable land value assessments. The problem is there is a disproportionately large amount of discrepancies in black neighborhoods - a disproportionately large amount of discrepancies in underserved communities.

We are not in control of our market values and real estate taxes due. Who is? Office of Property Assessment. However, we are in control of advocating for fair assessments. We are in control of sharing this information and doing what we can to make sure our family, friends neighbors, communities and colleagues are aware of whats going on and what needs to be done to work to create the change. We are in control of recognizing the problem so we can implement the solution.

#3 - The Solution

I don’t have all of the solutions but I have identified some of them:

Communicate with residents and share the importance of knowing your Market Value.

Work together within our communities to make sure we are aware of what’s going on and what’s against us.
Address the discrepancies at scale by creating City-wide solutions, State-wide solutions, Nation-wide solutions, Global solutions and Generational Solutions.
Work with like-minded individuals and organizations to put the infrastructure together to compile the data needed to support the change occurring.
Create a proof of concept. Prove / quantify / measure the negative impact. Connect with people and organizations that care about preventing the negative affects.
For example, calculate the poverty in the communities that are experiencing high increases, prove statistically they can’t keep up with the taxes at 500-10,000% annual increases, predict displacement, measure impact, align with social impact investors and funding that have the resources to INVEST in solutions that positively impact black communities.
Community organizations, investors, developers and stakeholders secure capital from social impact funds / private equity funds to curate custom grant program for members of the community within impacted areas to provide assistance / support for individuals / businesses that experienced high increases as neighborhoods transition. (This strategy could stabilize residents and prevent displacement)
There will be different levels of solutions. Ultimately the source (Office of Property Assessment) needs to address the inaccurate assessments but owners need to do what they can in the meantime which is educate themselves about the process, file an appeal if they qualify to do so and work to implement solutions and change.

From a broader perspective….a lot of the communities that have been hit with significant increases are under served and for years the property values were under assessed. The neighborhoods were intentionally devalued and that had a generational impact in the neighborhood. Schools , infrastructure etc were all impacted by the fact that minimal tax contributions were circulating back into our neighborhoods.

For the infrastructure of the schools, businesses, streetscape, sanitation, etc….For us to progress and for the community to thrive, market values do have to increase, taxes have to increase so our neighborhoods have more resources - so the facilities can improve and the environment can start to change in a positive direction .

That has to be done strategically. If it’s not, and the City tries to correct the decades of ‘under-assessments’ in 1-3 years, the residents will suffer, many could experience delinquency, landlords will be forced to drastically increase rents, all which could cause significant displacement.

Growth is good but when you are creating change in black neighborhoods - when you are creating change in underserved communities, you have to be intentional and responsible. It’s unfair to NOT acknowledge the negative impact of unfair assessments. This is something we have to work together to mitigate the risk as much as possible.

#4 - Steps To Appeal

STEP 1 - IDENTIFY IF YOUR MARKET VALUE IS ACCURATE

PHILLY PROPERTY SEARCH

Go to www.property.phila.gov
Search Property Address
Scroll Down To View Market Value & Taxable Land Value
Compare Current / Previous Years
(The significant increase in the example below is a RED FLAG but doesn’t mean the market value or taxable land value is inaccurate.)
See below for two houses on the same street, 2 properties apart, same land size, same improvement (building size) that have very different market value and taxable land values. In my opinion, this is a clear indication that the TIOGA HOUSE #3327 is overassessed and that owner of record should file a market value appeal. The owner should continue search to find additional discrepancies like this below to include with the appeal.

TIOGA HOUSE #3327

TIOGA HOUSE #3321

STEP 2 - CONNECT WITH AN EXPERT

If you have never filed a market value appeal and are unfamiliar with the process, I recommend you connect with an expert.
Schedule a FREE CONSULTATION with my team to learn about our services.
Research local real estate attorneys that file market value appeals regularly
Work with a businesses / coaches consultants that are familiar with market value appeals and have had success filing them.

STEP 3 - COMPILE SUPPORTING DATA + COMPLETE APPEAL APPLICATION

Compile SQ FT data from nearby properties that are comparable (This could help when you are seeking to demonstrate that the properties are in fact similar)
Organize the data so its clear and easy to see the discrepancies throughout the block
Circle / Point at / Highlight inaccurate over-assessments
Include information about the poor property conditions (if this is applicable. For example, if your property is vacant and not in livable condition, that would be a good thing to highlight and include)
Calculate average SQ FT of land
Calculate average SQ FT of Improvement
Review market value appeal applications thoroughly. Ask questions if you have any!
Identify accurate proposed value
Complete market value appeal applications (submit them on time is the best procedure. If you have to submit late applications, its a more complicated process)

STEP 5 - SUBMIT APPEAL APPLICATION(S)

Submit in person or via email
Make sure you get a physical stamped copy or a confirmation the application was received.
Follow up to get update on status of application / upcoming hearing

#5 - My Contribution

I am a business coach and have been working with clients throughout the United States for over a decade to create Generational Wealth Plans, Retirement Plans, Responsible Community Redevelopment Plans, Social Impact Investments, Private Equity Funds, Social Impact Programming and Business Plans.

In addition, I’ve assisted my clients with securing dozens of tax exemptions and market value appeals that have collectively saved them millions of dollars in real estate taxes.

I understand the negative impact inaccurate assessments have within our communities and I have dedicated the past decade to creating solutions. My consulting and training services are a product of that work.

I’ve donated my time to speak at community organizations across the country - to educate and empower the residents to take advantage of the available programs and resources, provided more than 200 hours of free appeal application and consulting services for community members and I have developed social impact programs, implemented the programs and measured the impact.