Eight years ago, Lorrie Cranor could have never imagined that the lawsuit she, along with several other homeowners, filed would end the way it did. Cranor was one of the homeowners that filed the suit that prompted the 2012 Allegheny County real estate reassessment.
Ms. Cranor and the other homeowners felt their homes had decreased in value since the last reassessment in 2002. Therefore, they were paying more than their fair share in real estate taxes. By the same token, other homeowners, whose properties had increased in value since the last reassessment, were paying less than their fair share in taxes. Allegheny County eventually conducted a reassessment after being ordered to do so by the Pennsylvania Supreme Court. The results of this reassessment were released in 2012.
You may think that Ms. Cranor’s lawsuit was a success, because a reassessment took place, but that is only partly true. The homeowners and the attorneys that filed the lawsuit hoped that Allegheny County would be forced to reassess at regular intervals, which did not happen. They also hoped that the reassessment would accurately reflect the value of each piece of real estate. Critics of the 2012 Allegheny County reassessment argue that the results were anything but accurate and we still do not know when Allegheny County will have to reassess again.
Pennsylvania is one of only two states (the other is Delaware) that do not require state-wide real estate reassessments at regular intervals. Many in Pennsylvania have been lobbying lawmakers to pass a law that would require all counties in Pennsylvania to reassess on a regular basis. There have been proposals that would require reassessments as little as every five years or as often as every two years. Every couple of years, a new state congressperson is introducing a bill like this. To this point, there has never been enough support to pass such a bill into law. Most recently, there was a bill in front of the Pennsylvania legislature earlier in the year that would have required every county in Pennsylvania to perform a reassessment every five years using standards that would be the same state-wide. The bill is still alive, but the provision requiring a reassessment every five years has been taken because there was not enough support for the bill to pass with that provision included. This shows that it is unlikely that we will have a state-wide reassessment requirement anytime soon. Each county will have to reassess voluntarily, be forced to reassess by the courts, or not reassess at all.
Lessons from Allegheny County
Since the reassessment numbers were released in 2012, 132,535 appeals have been filed by Allegheny County homeowners. That means that an average of one out of four property assessments has been appealed, which is staggering. If you paid any attention to the news in the beginning of 2012, you know how many people were angry about being over-assessed. Why were the numbers so inaccurate? There were two big factors.
First, much of the basic information Allegheny County started with was inaccurate. Allegheny County keeps track of various characteristics for each property such as the square footage, number of floors, number of bedrooms and number of bathrooms. The County anticipated that much of this information was not correct and sent letters out to each property owner in 2010 offering them the opportunity to correct these mistakes. Whether out of fear or laziness, the overwhelming majority of property owners did not respond and the mistakes were not corrected. This erroneous information meant that the reassessment figures were partly doomed from the start.
The next problem is the method Allegheny County used in property assessment There are 575,938 parcels of real estate in Allegheny County. It would be hard to have assessors personally visit each property, but the County only had 60 people looking at properties in person! That meant that most properties never even got the benefit of a passing glance from an assessor. This probably leads you to wonder who actually came up with the assessment numbers. The answer is computers. While computers can certainly be a helpful tool in valuing real estate, this experience shows that they cannot be relied on too heavily and that there is no substitute to a real person viewing real estate in person.
If you thought the 2012 Allegheny County real estate reassessment was a fiasco, you were not alone. The worst part is that it most likely will not be last such fiasco we will experience. At this point, there are no plans as to when the next reassessment will take place and Allegheny County officials have been largely unwilling to admit any mistakes were made in carrying out the reassessment, meaning that any future reassessment will likely be handled the same way. If you do not live in Allegheny County do not think that you have totally dodged the reassessment bullet. There was a similar lawsuit in Washington County, which has prompted a reassessment that will begin shortly. It could just be a matter of time before a lawsuit and a disaster of a reassessment comes to your county.