The kind of people who spend time reading real estate blogs tend to be richer than most and are more likely to be homeowners or aspiring homeowners, so I’m not surprised to see the Philly real estate blogosphere’s coverage of Actual Value Initiative aiming at an audience of homeowners in gentrifying neighborhoods.
But it should be noted that if higher property taxes will make owning property more expensive in some of the faster-gentrifying neighborhoods, folks can limit their exposure to housing cost increases by renting instead. And city policymakers can help keep housing affordable by more zealously protecting the new zoning code’s streamlined process for developers to build more multi-family housing in these neighborhoods by-right.
The one-time hit from higher assessments will mean rents go a bit higher as building property tax bills increase, but the virtue of multi-family is that a building’s property tax bill can be spread across a bunch of different households. The real estate profession has an interest in seeing home values increase, but the public interest is keeping rents low as a proportion of household income.
Land values will continue their upward trajectory after the hit from AVI works its way through the market, and home values for single-family homeowners will continue to increase, which is nice for them. The public policy problem to be solved here though is how to retain a healthy number of affordable rentals in these neighborhoods in the face of rising land values. You want the land values to keep increasing – that’s what happens as neighborhoods become nicer and get more amenities – but you also want to ensure that new construction increases in tandem so you don’t end up with a housing shortage.