Fitzgerald tosses reassessment...? (Pittsburgh, Mount Lebanon, Lebanon: sale, foreclosures, renting)

[gg]

Originally Posted by Goinback2011

BrianTH, the people I see selling in response to tax increases are primarily retirees. They are very sensitive to marginal tax increases and they aren't a small percentage of Pittsburgh's population. 30-somethings might not care, but 60 and 70-somethings do.

The older fixed income people will no doubt have the toughest time. Guess the get what they deserve according to Brian, if they aren't paying what they should. It is what it is. Throw them out on the street and be done with it. New younger people will buy the homes up at some point and that means the county got their money regardless of cost to anyone. That is the most important thing, I guess?

[BrianTH]

Originally Posted by Goinback2011

BrianTH, the people I see selling in response to tax increases are primarily retirees. They are very sensitive to marginal tax increases and they aren't a small percentage of Pittsburgh's population. 30-somethings might not care, but 60 and 70-somethings do.

Again, most likely more of them will be getting tax cuts, not tax increases, which may help delay more sales than it accelerates (seniors face rising costs in many areas, and property tax relief could, as you point out, help seniors with very tight budgets). Meanwhile, very few will see really significant tax increases, and those are the ones who should have a lot of extra equity, and people over 62 have special products available (such as reverse mortgages) for just these scenarios.

So while there may be a few forced sales, I really doubt it will be enough forced sales on net to flood the market with enough new supply to completely reverse the current price trends. Indeed, it may well have the opposite effect on net.

[KenziDelx]

Originally Posted by h_curtis

The older fixed income people will no doubt have the toughest time. Guess the get what they deserve according to Brian, if they aren't paying what they should. It is what it is. Throw them out on the street and be done with it. New younger people will buy the homes up at some point and that means the county got their money regardless of cost to anyone. That is the most important thing, I guess?

There's no good answers here, though. My wife and I bought a place in the eastern half of Friendship quite close to East Liberty not too long ago. One issue in the area that I wasn't anticipating, at least on the blocks around our house, is that there are quite a few places owned outright by fairly elderly people, and some of them clearly don't have the money to keep up their properties, which are beautiful buildings but in quite a state of disrepair. These same properties are also mostly assessed at less than half of what their going market rate would likely be, so their taxes are quite unnaturally low (we just got our 2012 reassessment, and the assessed value is around 300% the previous value, for reference).

On the one hand, for anyone who has lived here their whole life, I totally get how horrible it would be to be forced to move. And I'm not really keen on paying more property taxes either, of course. On the other hand, to be perfectly honest, some of these folks only have the property they do because Pittsburgh was in such doldrums in the 80's and 90's that they got a hold of these properties for a song, and they never really had the means to keep up these homes. Is it entirely a bad thing if higher taxes cause them to move on to places that are more in line with what they can actually afford to maintain?

I'm also really curious what the increases in property taxes will do to all the rental units in the area. It's got to change the economic calculation somewhat.

This is all pretty specific to the part of Friendship where I am. I'm not sure what to think about it all, to be honest.

[Copanut]

Fitzgerald is grandstanding, he can't disobey a court order. He voted for the 1 mill increase, now he's trying to look like the good guy. The new assessments are valid, the informal hearings will take care of the glitches, those that have "skated" since 2002 will pay their fair share. Trust me, the rich people in Sewickley are hoping that Fitzgerald wins.

[Clint.]

Originally Posted by Copanut

Fitzgerald is grandstanding, he can't disobey a court order. He voted for the 1 mill increase, now he's trying to look like the good guy. The new assessments are valid, the informal hearings will take care of the glitches, those that have "skated" since 2002 will pay their fair share. Trust me, the rich people in Sewickley are hoping that Fitzgerald wins.

It is grandstanding, he was in favor of the 1 mil increase, and not everyone's assessment will increase - incorrectly high assessments were a large inspiration for the original lawsuit...some properties were overvalued and thus over-taxed!

He was County Council President. He had his opportunity to help prepare for an orderly, transparent, and fair assessment. Instead the County spent resources on appealing the court's verdict and ultimately lost. He's now trying to look like a hero, but really deserves a lot of the blame.

[PittsburghLlama]

It seems that his shenanagans were all for naught. The assessments stand (of course), and it seems that he cancelled all of the informal hearings.

/facepalm

[BrianTH]

Chris Briem compares 2002 and 2012 assessment numbers respectively to 2010 sales, and finds, not surprisingly, a much better fit with the 2012 assessment numbers:

Nullspace: Assessments today: Where did the water go?

So that is at least one independent look at whether the new numbers are in fact more accurate (and this is all pre-appeals, which should further improve the accuracy).

[robrobrob]

Originally Posted by KenziDelx

There's no good answers here, though. My wife and I bought a place in the eastern half of Friendship quite close to East Liberty not too long ago. One issue in the area that I wasn't anticipating, at least on the blocks around our house, is that there are quite a few places owned outright by fairly elderly people, and some of them clearly don't have the money to keep up their properties, which are beautiful buildings but in quite a state of disrepair. These same properties are also mostly assessed at less than half of what their going market rate would likely be, so their taxes are quite unnaturally low (we just got our 2012 reassessment, and the assessed value is around 300% the previous value, for reference).

On the one hand, for anyone who has lived here their whole life, I totally get how horrible it would be to be forced to move. And I'm not really keen on paying more property taxes either, of course. On the other hand, to be perfectly honest, some of these folks only have the property they do because Pittsburgh was in such doldrums in the 80's and 90's that they got a hold of these properties for a song, and they never really had the means to keep up these homes. Is it entirely a bad thing if higher taxes cause them to move on to places that are more in line with what they can actually afford to maintain?

I'm also really curious what the increases in property taxes will do to all the rental units in the area. It's got to change the economic calculation somewhat.

This is all pretty specific to the part of Friendship where I am. I'm not sure what to think about it all, to be honest.

You should be concerned with the old timers who bought in 1950's and 1960's not the ones who bough in the 1980's and 1990's. The people that bought in the 1950's are the ones that are retired. The ones who bought in the 1980's and 1990's are in their prime earning years (50-70).

Again, I think the city is to blame because they haven't appealed as may assessments as the suburbs. This allowed people to skate by with low assessments for years.

[ML North]

Originally Posted by robrobrob

Again, I think the city is to blame because they haven't appealed as may assessments as the suburbs. This allowed people to skate by with low assessments for years.

I don't think that makes a lot of sense. The controversial areas are those that have seen huge increases in property values over the last 10 years -- Southside Flats, Friendship, Central Northside, etc. So there are very likely a lot of cases in which homes had accurate 2002 assessments and then saw rapid appreciation, which wouldn't have been a strong basis for the city to file an appeal.

And anyway, I don't really see any value in assigning such blame. What possible end will that bring about? The true upshot is that the reassessment process redistributes the incidence of property taxes based on current market conditions, which should correct the assessments that you think are artificially low. So if you fault the city for anything, it should be its opposition to the reassessment process, not favorable market dynamics. So what you should be asking for is more reassessments, not more appeals.

[robrobrob]

Originally Posted by ML North

I don't think that makes a lot of sense. The controversial areas are those that have seen huge increases in property values over the last 10 years -- Southside Flats, Friendship, Central Northside, etc. So there are very likely a lot of cases in which homes had accurate 2002 assessments and then saw rapid appreciation, which wouldn't have been a strong basis for the city to file an appeal.

And anyway, I don't really see any value in assigning such blame. What possible end will that bring about? The true upshot is that the reassessment process redistributes the incidence of property taxes based on current market conditions, which should correct the assessments that you think are artificially low. So if you fault the city for anything, it should be its opposition to the reassessment process, not favorable market dynamics. So what you should be asking for is more reassessments, not more appeals.

I think the problem is that the homes in the areas you mentioned did not have accurate assessments in 2002. As an example, I have two friends who live on the South Side Flats and both bought houses in 2000 and in both cases their 2002 base year assessment was significantly less than their respective purchase price. At some point the Pittsburgh Public School made a decision to not to appeal assessments at less expensive properties. This was a decision that allowed inequites to continue and cost the PPS countless dollars. By the way, I still think the South Side Flats has assessments that are too low. No way, any house in the Flats should ever be assessed at less than a purchase price.