It's good news/bad news when it comes to new numbers
February 12, 2012 10:00 AM
Marilyn Pavlik recites a litany of increased assessments in a two-block length of dead-end Mary Street on Pittsburgh's South Side. The assessment on Ms. Pavlik's home went from $53,300 to $169,900.
By Rich Lord and Diana Nelson Jones Pittsburgh Post-Gazette
In Carrick, the reassessment elicits shrugs. In South Side, squeals. In Bloomfield, head scratching. The effects of the first-in-a-decade Allegheny County reassessment, now spreading into the suburbs, emerge in the data and reactions from city wards.
The reassessment takes effect in 2013, when millage likely will be reduced by more than one-third by the city and school district to avoid illegal windfalls. RealSTATs, a property sales tracking firm, compared 2011 assessments to the new values and estimated that, citywide, about 69,000 households will pay lower property taxes and 59,000 will pay more.
In Carrick, nearly 83 percent of properties can expect lower tax bills next year while 81 percent in Bloomfield and Friendship likely will see higher bills. In some places, seemingly inconsistent assessments create an uneasy balance of winners and losers.
"Any city, especially one as large as Pittsburgh, is very difficult to evaluate," said Wesley Graham, the county's acting chief assessment officer and an employee of Cole Layer Trumble, the consultant the county hired to oversee the $11 million reassessment.
"Sure, we were under the gun," he said of the court-ordered process that county officials fought for years. But the reassessment did a good job of assigning new values by matching properties to comparable parcels that sold in the same or similar neighborhoods between 2008 and 2010, he said.
'"There's a lot of things you have to look at before you say, 'This doesn't make sense.' "
There are plenty of puzzling examples, though.
Here's one: The front door of 4916 Cypress St. in Bloomfield is boarded up, and the front window of 1616 Buena Vista St. in the Central Northside wears a 2008 building permit. Both are vacant, neglected properties in neighborhoods whose market is strong, and both were highly regarded in their reassessments.
The Bloomfield house sold in October for $38,000. From $61,200, its assessment skyrocketed to $155,000.
The reassessment on the Buena Vista house, which sold in December for $50,000, went up more modestly, from $55,600 to $71,600.
"Clearly the people who assessed these did not visit them, and I think that's a mistake," said Daniel Murrer, vice president of RealSTATs.
The derelict houses are in wards that are deemed "losers" by RealSTATs because the majority of their homeowners can expect to pay more than $500 more in real estate taxes in 2013.
The 8th ward -- Bloomfield and Friendship -- is one of RealSTATs' biggest losers. Nearly 1,600 property owners can expect tax increases of $500 or more while 283 likely will realize that much of a decrease. The 25th ward -- part of the Central Northside and Fineview -- is more even, with 251 owners projected to be happy and 384 unhappy with their tax bills.
On Cypress Street, wild reassessment swings may speak to how far afield assessors had to go to find comparables. The housing stock on the street varies from large, rambling apartment houses to tiny row houses, from good to poor condition.
One block from the highly valued house with the boarded-up door is 4814 Cypress. It appears to be a decent single-family home that sold in November for $91,150. Its reassessment is $95,100, near the sales price. Down the street at 5008, a very small row house that's being remodeled, sold in December for $15,000. Its new assessment has more than doubled, to $58,400.
"If you look at the comparable sales used for virtually any properties in the city of Pittsburgh, you could call them into question," Mr. Murrer said. "There was a property on Arlington Avenue whose two comparable sales were from Brookline, but I found 20 comparables closer and better."
Of all of the city wards, the 29th, Carrick, will likely see the biggest overall tax cut with the millage adjustment. Its 18.2 percent increase in assessed value is roughly one-third as steep as the jump in the city as a whole. "I really can't complain," said Dorothy Lowicki, who has lived in a house with a big yard on Carrick's Minooka Street for a decade. Her assessment on the house that she and her husband bought for $75,000 in 2005 crept up from $56,600 to $57,900, meaning her tax bill likely will drop next year.
The downside is that the flat value reflects a flat market. "Who's going to buy it? There's a lot of houses around that are empty," and nobody's buying those.
City Councilwoman Natalia Rudiak lives in Carrick and said the housing market is stabilizing with rejuvenated block watches and police efforts. "A lot of young families with children are moving in," she said.
A difference between Carrick's property market and that of hot East End neighborhoods is in who is buying where. The South Hills attracts few residents from outside the region, said Bob Gradeck, a researcher with the University of Pittsburgh's University Center for Social and Urban Research. That means lower demand.
A census survey from 2005 to 2009 showed that about 10 percent of Carrick residents recently moved there from within the county, and 1 percent from outside the county. Friendship's percentages, by contrast, were 17 and 17. One question about Carrick's assessments is: Should they be even lower?
For the 81 properties that sold last year in what appear to be market transactions, the average price was a modest $39,299, but the average new assessment for those properties was $60,311. On Minooka, six houses sold last year at prices ranging from $5,000 to $64,000 and their assessments are all higher than their price tags, ranging from $32,300 to $133,300.
Such examples suggest that even a modest bump up in values may not be warranted.
"Do I think it's high? Yes," said Ron Eberhardt, a retired police officer who lives on Minooka, and saw his assessment go from $71,400 to $81,500. "I'm not going to fight it. Considering they haven't done it in a long time, $10,000 isn't a lot."
Mr. Murrer said the wide disparity of prices on the same street adds to the complexity.
That is true on upper Buena Vista and in the 25th Ward in general, where housing prices have been climbing steeply.
Across the street from each other, two homes exemplify how the reassessment worked as intended.
When Courtney Centner bought a fixer-upper in the 1500 block of Buena Vista in 2007, she paid $95,000. Her reassessment went from $54,000 to $84,000, "which is not extreme for this area," said her husband, Nathan Davidson.
The comparable house across the street sold last year for $285,000, almost three times more than Ms. Centner paid four years before, and its reassessment popped from $30,000 to $86,400. That may not reflect the market price but it brings comparable neighbors to within $2,400 in assessed value.
Ernie Hogan, executive director of the Pittsburgh Community Reinvestment Group, said the best practices in real estate assessment are in appraisals, "and the appraisal industry requires you to stay within a mile" for comparables, he said. "If there is not a sale in a one-mile area in the last 12 months then you go to the previous year and assume a flat market. But to jump across socioeconomic boundaries is a huge problem."
In the 16th Ward, which includes Arlington and the eastern half of the South Side, about 57 percent of property owners can expect to pay higher taxes next year, according to RealSTATs. On the 2900 and 3000 blocks of Mary Street, on the fringes of the South Side Flats, many assessments have tripled.
Marilyn Pavlik's went from $53,300 to $169,900 on a five-room home on Mary Street's dead end, surrounded by city-owned staircases. "This is totally ridiculous," she said.
A retired schoolteacher who lives with her mother, she's appealing the assessment, which was based on comparable properties in the South Side's heart, more than 10 blocks to the west. If she fails, she'll pay the tax. "I wouldn't think of moving. I was born here. I've grown up here."
That's a sentiment shared by other South Side natives, who have endured disruptive reconstruction and rambunctious young renters, and now face higher property taxes driven by precisely those factors. "The people who have lived in their house for 50 years and are on a fixed income in Lawrenceville, Bloomfield and the South Side are never going to realize the appreciation in the value on their homes, once worth $30,000 and now maybe $150,000," Mr. Murrer said. "But with the reassessment, they will bear the burden of higher taxes. ... That's just how it is."
Mary Street may be a victim of its own charms, said Councilman Bruce Kraus, who lives on the Flats. "You can have all of the amenities of living in the South Side and still be off of the beaten path," he said.
Those features have driven construction of new townhouses in the 2900 block. Some have sold for around $350,000.
"A rising tide lifts all boats. That's a good thing," Mr. Kraus said. "But at the same time, one has to temper that with mercy, for lack of a better word, because not all of those homes have had the improvements that would warrant an increase that high."
Of 80 properties in the 16th Ward that sold last year, 30 are assessed at less than their sales prices and 50 are assessed for more.
Frank Smyczek, 85, saw the assessment on his home of 40 years go from $41,000 to $130,900. "The house hasn't been remodeled since the 1970s and most of it is still the original from when it was built in the 1800s," he said.
If his appeal fails, he's "probably selling," he said. "It's not like I'm going to have any choice. I'm going to be forced out of my home."