When Charles Burke, a junior architecture major at University of Pennsylvania, first heard about the Actual Value Initiative – the reassessment of every property in Philadelphia – he said he thought it wouldn’t change students’ housing habits much.
After the city sent out new tax assessments, however, Burke said that he believes increased rents will result in students moving farther off campus.
Burke will not have to worry about the reassessments raising his taxes. After living on campus as a freshman – as all Penn students must – and on the 3800 block of Chestnut Street as a sophomore, he signed a two-year lease on a one-bedroom studio apartment on the 4000 block of Pine Street. According to his lease, his rent will remain the same next year.
The owners of the property, however, are projected to see approximately a $1,000 increase in their annual property taxes, using the 1.25 percent tax rate currently expected. This would have raised Burke’s rent from $785 to about $868 a month, if the landlord felt he could pass the entire cost along to the tenant. While he said that he would probably still chose to live there, he did admit that the jump would cause some second thoughts.
“I guess I would still be willing to pay that, but I wouldn’t be happy about it,” he said. “That said, I wouldn’t like having to pay that much at all and I would definitely look for a cheaper place to live, probably Center City or further west.”
While Burke said he thinks this is a possibility many more students will consider in coming years, he also said he expects students to be taken by surprise by fluctuations in prices.
“I’ve heard no one talking about property taxes.”
Published in partnership with Philadelphia Neighborhoods
More on the impact of AVI on renters:
Daily News: As taxes rise, so may rent
WHYY/NewsWorks: Are Philly renters at risk from AVI hikes?