What we found

FINDING 1

Cheaper homes are over-assessed, and it doesn’t have to be this way.

100% means the city’s value matches what homes really sell for. The cheapest fifth of Philadelphia homes is assessed at 124%. Those owners pay tax on more value than their homes have. The priciest fifth sits at 88%. Economists call this regressivity. In plain words, it quietly shifts tax off expensive homes and onto cheap ones.

The blue bars show the point: this pattern does not have to happen. Using only the city’s own open data, our model puts the same groups at 110% and 98% on the same sales. Most of the gap is gone. Regressive assessments are a modeling problem, and modeling problems can be fixed. See the proof.

Could bad data fake this picture? A foreclosure or a family deal can make one home look cheap when its neighborhood is not. So we reran the test the skeptic’s way, grouping homes by their neighborhood’s price level instead of their own, counting every sale. The pattern holds. The city still values the cheapest fifth of neighborhoods at 117% of what homes there sell for, and the priciest fifth at 93%. Our model reads 102% and 104%, close to flat.

Bars measured on mortgage-financed sales the model never trained on; the neighborhood check counts every arms-length sale.

FINDING 2

Over 10 years, that shifted roughly $359 million.

Property tax is a fixed pie: every dollar the bottom over-pays, the top under-pays. Comparing each year’s roll to a fair one, lower-value homes over-paid about $359 million from 2016 to 2025 (about $227 per Philadelphian). $65 million of that came in the worst single year. On a stricter all-sales benchmark the total is closer to $655 million.

FINDING 3

Philadelphia has two housing markets.

About 4 in 10 Philadelphia home sales are all-cash. These are mostly investors and wholesalers, and they cluster in disinvested neighborhoods. Those homes sell for roughly 47% less than financed homes in the same district. In the cheapest fifth of recent sales, 6 in 10 are cash.

This part makes the story more complicated. Measured against regular mortgage-financed sales, the city’s fairness problem shrinks a lot. Much of the unfairness lives in the cash market, where homes are taxed on values they cannot actually fetch. Any real fix has to decide which market an assessment should reflect. We show both views.

FINDING 4 · IN THE CITY’S FAVOR

The same pattern shows up across the country.

• No number-gaming. We tested for “sales chasing,” which means quietly matching assessments to recent sales so official studies look good. Philadelphia comes back clean.
• Almost every city has this pattern. Research covering about 26 million U.S. sales finds the cheapest homes assessed at roughly twice the rate of the most expensive, nearly everywhere. Philadelphia isn’t uniquely bad. It sits inside a structural, nationwide failure. That is also why Finding 1 matters: the fix is a method other cities could use too.

FINDING 5 · THE FIX

Make the wealthy pay their fair share.

Cities everywhere are scrambling for revenue, and passing a new tax is a long, hard fight. Philadelphia has an easier option that needs no new law and no rate hike: fix the assessments it already has. Today the priciest homes are under-assessed, so their owners are billed on less than their homes are worth.

Correcting that makes the wealthiest homeowners pay their fair share, and it gives the over-assessed cheapest homes a break. The typical priciest-fifth home would pay about $212 more a year; the typical cheapest-fifth home pays about $203 less.

Because the increase at the top outweighs the relief at the bottom, the city comes out ahead: an estimated $-3 million a year it is not collecting today, at the same rate, with no new tax.

An estimate across every home the model scores; the corrected values run about -0.2% higher citywide, concentrated in the most expensive homes. Residential and condo property only. The city could instead keep total collections flat and cut the rate for everyone; either way the regressive tilt is gone.