In February, the city of Philadelphia started notifying homeowners of their 2014 property values under the Actual Value Initiative. There has been ample media coverage that the values increased dramatically in some neighborhoods, while other values stayed the same or went down. This spring, Philadelphia City Council will consider the ordinances that will set the new tax rate, taking into account a proposed $15,000 homestead exemption and other potential programs for vulnerable owner occupants, including long-time owners in gentrifying neighborhoods.
A decade ago, public funds were flowing to help develop low-income and workforce homeownership housing. Even now, various government-funded down payment and closing cost assistance programs are still available. No matter what the subsidy, each program has strings attached in the form of “soft” mortgages and/or deed restrictions. The programs can be layered so that one buyer may have a conventional first mortgage and up to four additional “soft” mortgages to secure the funders’ investments and to prevent the buyer from “flipping” the house and being unjustly enriched.
