Property taxes (Pittsburgh, Wilkinsburg, Edgewood: crime, houses, depreciation)

[gg]

Originally Posted by UKyank

Guaranteed my southside residence is going to shoot up nicely if this goes through.....maybe I should stop cutting the grass & put a rusty old pickup on blocks in the yard.

A description of the slum lord. One of the reasons they wouldn't be very motivated to do much of anything to make a property look decent.

[UKyank]

Originally Posted by h_curtis

A description of the slum lord. One of the reasons they wouldn't be very motivated to do much of anything to make a property look decent.

Yea I wonder how many neighborhoods would see a significant beautification bump in the aesthetics of the homes if not for the countys abnormally high property tax rates.

[squarian]

Originally Posted by Lobick

What are the prevailing thoughts on how to address this apparent conundrum?

I should repeat the point that this is mostly an issue where taxing jurisdictions are small and therefore the likelihood of this scenario (overall decline or stability in value but significant increases in one part) is more likely. If there was a single prop tax rate for all of Allegheny Co, the effect of Edgewood's appreciation would be much more moderate. This is why I think Wettick and other champions of Allegheny Co's solitaire reassessment have erred - political structural reform should go hand in hand with this major economic readjustment.

In other words, deal with the balkanisation before or while we deal with the assessment inequities. At the very least, PA might join the party and move assessment to a statewide basis:

Pittsburgh

With regard to accurate taxing, personally, I generally accept taxation much more willingly than many as the "price of civilization" to paraphrase Justice Holmes, but I can admit to being irked that some of my neighbors, in similar or even more expansive homes, have a smaller tax burden than I based upon a less than precise assessment system. I have far less compassion for a homeowner whose asset has appreciated ahead of their cash flow and are forced to sell their home to meet a tax burden.

I entirely agree with the "price of civilization" perspective, and I'm not approaching this issue from a tea-party neo-anarchist point of view. But the point is that compassion for the individual owner shouldn't be our only concern.

Those individuals make up a community, a neighborhood - having to realise the value of their appreciated home isn't a tragedy, though it may come at some sentimental cost for their family. There are plenty of people who can only wish they had such a problem right now.

But replacing those individuals, with their ties to their neighbors, their involvement in their local community, and their collective memory (which after all IS what makes a neighborhood), with the autonomous market actor better able to pay the taxes - that is a tragedy. Do we value individual economic autonomy or do we value community integrity? Plenty of people in Pittsburgh say they love the neighborhoods - well, that's what this is about.

There is an obvious solution, if only our political structure made it possible. Have regular FMV reassessments, by all means. But phase in significant assessment increases (say, over 10%) over a given period (say, in 10% increments over ten years). Anyone caught with a sudden change in their neighborhood's values would have time to adjust, increase their income, or finish their term with the neighborhood association board or the block watch or the church vestry, without the sudden dislocation to both families and communities. Taxing authorities would realise the increased value in a predictable, regular way, while any unfairness to individual market actors (neighbors paying assessments) would be temporary and compensated by the social benefits.

[squarian]

Originally Posted by UKyank

Guaranteed my southside residence is going to shoot up nicely if this goes through.....maybe I should stop cutting the grass & put a rusty old pickup on blocks in the yard.

Or swindle the elderly widow into selling way below market rates, so you can point to the lower comparable.

[BrianTH]

Originally Posted by h_curtis

Why are you attempting to compare the high flying cities that had wild appreciation and then the bubble burst, to a city like Pittsburgh?

Um, because that is exactly what you are doing when you complain about Pittsburgh's property tax rates.

There are a few other cities with similar property tax rates to Pittsburgh, most notably the cities in Texas. Just like Pittsburgh, they have high property tax rates because their housing values are low. But they also avoided most of the housing burst, just like Pittsburgh, because low values also meant they weren't part of the bubble.

Conversely, most of the other large metros which had substantially lower property taxes experienced a bubble and substantial contraction. Again, these things go together--it was the high property values that allowed them to have the low tax rates, but those property values proved unsustainable.

It is only in some parts of just some metros that property values got high, and rates were thus low, and then they didn't crash too much. And personally, I don't think it is a safe bet that all of those places will have high appreciation going forward, even if they managed to dodge the crash.

In short, you are playing the Ghost of Christmas 2004, when everyone was apparently making lots of money on real estate in other places, and people in Pittsburgh were wondering why they had to settle for lower appreciation rates and higher property tax rates, when other places had higher appreciation and lower taxes, making them look like wonderful tools for building wealth. The fact is that it was the rest of the world that was off, not us, and most of those supposedly great investments turned out to be busts.

And again, our property tax rates are actually an effect, not a cause, of the fact we have had relatively tame property prices in our area.

I didn't choose Phoenix that is your attempt. I chose DC area.

Of course you did, because you were cherry-picking your example. Admittedly, I picked an extreme example on the opposite end, but that was my point--for every DC there was a Phoenix.

And in fact, here is the composite effect:



The Phoenixes more than outweigh the DCs.

[BrianTH]

Originally Posted by Lobick

There is a certain irony in the fact that the new assessment (which you oppose) will most likely lower the tax per 100k metric which you consistently use as your measuring stick.

Yep. He should be a HUGE fan of reassessments, but he just can't seem to grasp how his experience losing assessment appeals isn't the same thing.

[gg]

Originally Posted by UKyank

Yea I wonder how many neighborhoods would see a significant beautification bump in the aesthetics of the homes if not for the countys abnormally high property tax rates.

There is NO question that the area would look better if we weren't taxed like we are. I know people that own over 100 and even 300 units. They all do as little as they can with all the properties. Not saying they are slumlords, but they don't landscape or dress any place up for the mere reason of taxes. Why would they? It is a business and if you make the place look really nice the taxes will go up when the reassessments hit.

[gg]

Originally Posted by BrianTH

Yep. He should be a HUGE fan of reassessments, but he just can't seem to grasp how his experience losing assessment appeals isn't the same thing.

I won my all three appeals I was in. My compromise with the FC district was very much in my favor.

Again, you will stop at nothing to try and prove your silly points that are very misleading to people who are trying to learn about Pittsburgh. Being a professional in this business, I don't expect you to understand, but you could at least not mislead people that they should extend themselves like they do in many places when they buy a home. Cut way back in Pittsburgh due to the huge property taxes.

Get a grip. You sound so silly to those of us that know this market. If you only knew.

[Lobick]

Originally Posted by h_curtis

There is NO question that the area would look better if we weren't taxed like we are. I know people that own over 100 and even 300 units. They all do as little as they can with all the properties. Not saying they are slumlords, but they don't landscape or dress any place up for the mere reason of taxes. Why would they? It is a business and if you make the place look really nice the taxes will go up when the reassessments hit.

You could argue that it is the failure to frequently reassess that causes this behavior. Owners don't want to draw attention to their properties and trigger a reassessment. Were they more frequent, I think the chances of an accurate assessment of the property's value go up, regardless of an additional coat of paint or new landscaping.

[BrianTH]

Originally Posted by squarian

Which is almost certainly true, but not necessarily true for every taxing jurisdiction, municipal or school. And since the muni/school rates are much higher generally, it's the cumulative value of those jurisdictions which will matter most to most people (obviously).

You can use the change in median home value map available here to get a rough sense of what has been going on in different areas. The time period is off (basically 2000 to 2007 rather than 2002 to 2010), but I've compared it to other data sources and it seems fairly well-correlated.

Anyway, it is certainly true not every area in the county has appreciated. The thing that map can't tell you--that really nothing but the actual numbers can tell you--is how it all works out on a weighted basis by jurisdiction.

And it appears, as of the last meeting before Judge Wettick and county officials, that our next tax bills will be based on estimated cumulative values rather than certified.

Just a guess, but that may result in tax rates being lower in this period than they will be once the final numbers are set (just on the theory that objections and appeals will lead to a net lowering of the total basis).