(Image: Philadelphia Controller)

A new analysis from Controller Rebecca Rhynhart confirms a problem we've been flagging here for a while now with the City's assessments, which is that the Office of Property Assessment's method of assessing land values is totally broken.

This matters for fairness and uniformity reasons, and it also has important land use policy consequences. If we're systematically under-assessing certain types of land, that's the equivalent of giving a tax break to speculators and owners of underutilized properties in high-value locations—the exact opposite of what we'd want to encourage.

What the analysis shows is that OPA just isn't really bothering to try to capture the location effects, and is just making land a set fraction of total property value, leading to some very weird outcomes at the block level that many people had observed anecdotally, and are now being confirmed by this Controller report.

Here's the key section, which is worth quoting at length:

Philadelphia’s property assessments for single-family residential properties are comprised of a land value portion and a building value portion. In a properly functioning system, land and building values should be determined independently. Prior to tax year 2017, the OPA relied on an outside expert on Philadelphia’s land values to provide land value estimates for properties across the city. This process resulted in land prices per square foot remaining consistent for properties in each other’s vicinity and overall land values that varied by lot size. For tax year 2017, however, the OPA changed its process for calculating land value, impacting nearly all residential properties.