Center for Policy Research
Property Tax Web Series
Assessment Frequency and Equity of the Real Property Tax: Latest Evidence from Philadelphia
Yilin Hou, Lei Ding, David J. Schwegman, Alaina G. Barca
March 2022
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Abstract
Philadelphia’s Actual Value Initiative, adopted in 2013, creates a unique opportunity for us to test whether reassessments at short intervals to true market value and taxing by such values improve equity. Based on a difference-in-differences framework using parcel-level data matched with transactions in Philadelphia and 15 comparable cities, this study finds positive evidence on equity outcomes from more regular revaluations.
The quality of assessment, as measured by the coefficient of dispersion, improves substantially after 2014, although the extent of improvement varies across communities. Vertical equity, measured by price-related differential, also improved, although it was still above the standard threshold.
Cross-city comparisons confirm Philadelphia’s improvement in quality and equity of assessments after adopting the initiative. These results highlight the importance of regular reassessment in places where property values increase quickly, and they shed light on the disparate impacts of reassessment across income, property value, race, and gentrification status.
The paper makes the case that the property tax, if designed well, can be an equitable tax instrument.
This paper was presented by Lei Ding on March 18, 2022 as part of the 2021-2022 Syracuse Webinar Series on Property Tax Administration and Design.
This Syracuse-Chicago Webinar Series on Property Tax Administration and Design aims to gather insight and scholarship through domestic and international comparative studies with common threads to help reform and improve property tax administration and design in the U.S. and other countries facing similar problems.
For questions about the webinars, please contact Zia Jackson. For questions about this paper, please contact the author or authors.