Friday, February 03, 2012

Disagreeing to agree

OK…  I was trying to avoid this, but this has gotten out of hand a bit. 
So yes, many saw, and some of you started reading regularly, after reading here how I predicted that with the new assessment numbers that 65% were likely to see a tax bill decrease if indeed tax rates were reset to their revenue neutral points. 
Then there was this other estimate out there that made the news that said I was being 'optimistic' and tht number was really close to 'half'. If you missed it I really had a Sally Field moment reading this press release.   I keep getting questions about why was I wrong?? 
The two numbers are not as far off as one may think.  I said 65% would see taxes go down.  The RealSTATS estimate is not half but 54%.  So 54 or 65, which is it? Who is wrong?  Of course, nothing is that simple, and the number you get depends on the question you ask. So let’s recap a few knowns.
So no need to scrape any longer.  With the actual data on new assessment numbers for the city of Pittsburgh there are 119,102 residential parcels in the city of Pittsburgh.  I had scraped over 118 thousand of them at one point, but that difference is irrelevant to the issue at hand.  That was my starting point since the question at hand then, and remains for me, what percentage of homeowners in the city of Pittsburgh are really looking at their taxes going up or down.

Now there are also 10K or so commercial parcels in the city, along with 20K+  other government or otherwise exempt parcels.  It looks like the commercial parcels saw assessment increases a bit higher than residential parcels.  So for them it has never been the case that 65% would see taxes go down. I have not worked it out, but it may in fact be the opposite and 65% of commercial parcels in the city will see tax bill increases.  Bunch them all together and you are really asking a different question.

I was focusing on residential parcels since that was all that had been released at the time as anyone who read the posts would have realized (the commercial parcels were not even on the county web site yet as well). RealStats clearly says they were looking at 128,921 parcels which I infer means they are looking at both residential and commercial parcels lumped together.  They decribe their analysis as applying to  "property owners" which seems to confirm that they are looking at more than the residential parcels which I hope was sufficiently labeled on all my graphics..  So right there is one big reason the numbers are not the same.. nor should they be. 

There is a bigger difference though.   I did not just blindly include all residential parcels either.  I excluded all residential parcels with previous assessments under $3,000.  Why?  It was a quick and dirty way to exclude those parcels that did not really represent unique homeowners. What I knew is that the lowest valued parcels typically are vacant land and have no homes on them.  So now looking back and checking there are 13,864 residential parcels with previous values assessed at under $3K.  It turns out that 91% of them are indeed vacant land.  Not vacant homes, literally vacant land.   So a good back of the envelope number it turns out*.

So go think about the news stories those first days.  The lines of people seeking appeal forms.   None of those people were living in empty lots I bet.  And as an aside, the occupy folks who are (were?) denizen of the vacant Mellon Green, so exclude them as well.   Then remember the news I mentioned yesterday with the owner of 4 vacant parcels upset over his new assessment.  Maybe the owners of the vacant land are upset and filing appeals, but just that one case shows they is not a unique owner per vacant parcel and it just wasn't the issue. 

So let’s do this a bit more formally and I apologize for any confusion.  Technically my label of 'residential' may have been a bit broader than I was intending since I took out parcels I was inferring were vacant as well.  Technically vacant can still be residential and I did not make that clear I guess.  So if I take out all vacant land and all 'boarded up and condenmed parcels' from the equation I wind up with 99,129 residential parcels in the city of Pittsburgh.  Again assuming the 58% aggregate assessment increase for the city..  I am getting a breakdown of 63.96% of said parcels below the notional revenue neutral point.   I still find it hard to reconcile that number with the reporting, let alone the public rhetoric, of that first week.  

If you then couple that number with what is in the news today showing that a lot of higher end parcels in the city are actually underassessed, that ought to mean the impact of appeals is not going to be as much as some might expect.  Anyway.. if you want a pretty complete picture of how ALL recent sales in the city of Pittsburgh compare to their new and old assessment values I refer back to the graphs I put in this post last month: Assesments today. Where did the water go? I think those graphs tell the whole story of what worked and what didn't pretty well. 
Circling back..  makes me wonder what would happen if I actually started issuing press releases.. or started showing up at city council public comment period.  Where is Les L. when you need him?

* lest anyone dis back of the envelope calculations. Sometimes you have no choice.  I was once taught back of the envelope calcualtions for policy analysis in a class with a very emminent physicist even.  Granted the physicists will be better at that then the rest of us.  There is the story of how Nobel Prize winner Enrico Fermi estimated pretty accurately the strength of the Trinity atomic bomb test by throwing strips of paper in the air to see how far the shock wave threw them.


Anonymous BrianTH said...

Just my two cents, but getting that 65% number out back then definitely had a utility not captured by getting the 63.96% number out today.

And I still have my suspicions about RealSTATs "overlooking" the residential versus commercial distinction, but I guess that is water under the bridge.

Friday, February 03, 2012 5:42:00 PM  

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