Byko: Young couple slammed by 1,245 percent city tax hike

Steve Silver and wife Lisa Margulies saw their land value increase 1,245 percent.

WHEN HE received his 2017 real estate bill, Steve Silver reached for the duct tape, to keep his head from exploding.

Although the tax on his new house in the Italian Market area didn't change, thanks to an abatement, the value of the land it sits on skyrocketed 1,245 percent.

He complains that he's a victim of bait and switch, a shell game run by his adopted city.

A Pittsburgh native, Silver, 29, came to Philly to attend Temple Law, from which he emerged with a law degree. His wife, Lisa Margulies, 33, a Boston native, came to Philly and earned her law degree at Penn. With degrees in hand, the millennials decided to make their future in Philadelphia, the City that Loves You Back, as a recent marketing slogan said.

Stabs you in the back is more like it, Silver grouses.

"We were enticed to purchase a home in Philadelphia due to the 10-year tax abatements," says Silver, adding the young couple worked out a budget to cover anticipated expenses.

When they bought the new, three-story rowhouse in June 2014 for $344,000, Silver knew the value of the land was $7,500. He had done his homework. So he freaked out when his 2017 bill valued the land at $100,890 - a 1,245 percent increase. That means he owes $1,412 this year - a 14-fold increase over the $101 he paid last year.

More than the actual dollars was "the surprise factor," says Silver. "It's been like this year after year and then - boom! You get hit by this."

Margulies says her "real issue is the arbitrary and opaque way this has been done" and what she perceives as the "overt targeting of abated homes."

Their tax bill came from the Office of Property Assessment and Chief Assessment Officer Michael Piper has a simple explanation.

The old figure was a mistake, or, in his words, "grossly inaccurate." The current bill is not a tax increase, it is simply a correction.

Silver is not mollified. He feels he's being penalized for the city's mistake and harbors dark suspicion this wasn't really a mistake at all. Silver believes the city is "shifting nearly $100,000 from the home value into the land to water down our abatement."

Piper insists it was a mistake, pure and simple. In an April phone conversation, he urged Silver to file an appeal, which he did.

Piper says he is glad "because that is the only way OPA can correct something we may have missed."

After more than 500,000 notices of changes in assessment - both increases and decreases - went out, Piper says the city has received about 7,000 first-level appeals, although that number will likely rise. Fewer than 4,000 appeals were filed last year.

I wondered how many people won their appeals. It's hard to calculate on the first-level appeals to the OPA, says Piper, because many get kicked to the Board of Revision of Taxes, the next level.

At BRT, Executive Director Carla Pagan says for 2015, the most recent year for which she has stats, only 20 percent of the appeals were denied, 18 percent were withdrawn and in more than half the cases the assessment was adjusted downward.

Some of those scheduled for a BRT hearing accept an offer of a reduction as a result of new information that comes to OPA, says Piper. I say it sounds like "Let's Make a Deal" and Piper doesn't disagree, saying the goal is to settle cases as quickly as possible.

In his appeal, Silver cites lack of uniformity, claiming other lots on tiny South Schell Street have values of $7,500 for vacant lots, and properties similar to his have land values of $50,000, $60,000 and $70,000, much less than his.

Piper did not want to comment on specific cases without reviewing them, but is aware of "concern about the difference between the recent land reassessments." He notes the reassessment "of vacant land parcels is not complete." New assessments will go out in July.

The lack of uniformity is troubling. The Inquirer last month reported several Center City high-rise condo tenants were filing appeals based on wild differences between units in the same building.

"Of the total 15,000 properties currently under abatement, almost 12,000 will realize tax increases" said City Controller Alan Butkovitz last month, "due to an increase in the land portion of the total assessment."

That could add $30 million in revenue to the city, Butkovitz said.

That fuels suspicion this is a back-door tax increase, where the tax rate is not raised, but the value of the land is, so the homeowner winds up paying more.

Silver says there were many reasons he and his wife wanted to remain in Philadelphia after graduation - everything from the pro sports teams, the restaurants, the arts and culture scene, access to the shore and casino gambling, "and affordable housing," he says with a bitter laugh.

As a homeowner, adds Margulies, "I am caught in the endlessly complex bureaucracy of the city, which is impossible to navigate without insider connections. Everything involving the city - from our water-meter installation to getting a street lamp fixed - is a production and there is no logic to any of it."

Some of the problems come from the startling fact they discovered during a dispute with the Philadelphia Water Department after a water-main break. The Water Department said South Schell neighbors would have to pay for the repair because they were not living on a city street.

Streets Department City Plans Officer Thomas Marro confirmed their block "is not on the city plan," meaning it is not a public street. Who knew?

"We're not a city street, but you want to raise my taxes 1,200 percent?" asks Silver, looking for the duct tape.

Welcome to the City that Loves You Back.