What Apartments at 198 Elmwood Would Actually Contribute in Taxes

Using verified 2026 millagemillage: the tax rate expressed as dollars owed per $1,000 of assessed value¹ rates and Pennsylvania’s own assessment methodology, we modeled what a 20-unit apartment building at 198 Elmwood Avenue would generate in property taxes — and compared it to what the site would yield as individually-titled homes. The gap in per-household school district revenue is stark.

One of the arguments made in support of the proposed 4a zoning amendments is that denser development would bring more property tax revenue into Narberth and into the Lower Merion School District. It is a reasonable thing to want to quantify.

What follows is a simple analysis using publicly verified data: the actual 2026 millage rates from Montgomery County’s official table, the State Tax Equalization Board’s current Common Level Ratio for Montgomery County, the published parcel dimensions for 198 Elmwood Avenue, and Pennsylvania’s established methodology for assessing income-producing properties. The math is not complicated. The implications are.

The tax framework

Property in Narberth is subject to three levies, applied to the same assessed value:

• Montgomery County: 5.462 mills (plus 0.490 mills for the Montgomery County Community College)
• Narberth Borough: 9.865 mills
• Lower Merion School District: 35.267 mills

Combined, the total millage is 51.08 mills — meaning $51.08 in annual taxes for every $1,000 of assessed value. The school district takes about 69 cents of every property tax dollar collected in Narberth. The borough retains roughly 19 cents. The county gets the remaining 12 cents.

One crucial detail: assessed value in Montgomery County is not the same as market value. The county’s assessments are frozen at 1996 base-year values. The State Tax Equalization Board publishes an annual Common Level Ratio to express how far those frozen assessments have drifted from today’s market. For 2025-2026, Montgomery County’s CLR is 30.76% — meaning the county’s assessed values are, on average, about 31 cents on the dollar relative to what properties are actually trading for now.

The formula is: Market Value × 30.76% = Assessed Value. Assessed Value × 51.08 mills = Annual Tax Bill.

Apartment buildings are assessed differently

This is where the revenue argument for high-density apartments runs into a structural problem that its proponents rarely acknowledge.

Single-family homes and individually-titled condominiums are assessed using the sales comparison approach — what comparable units sell for. In Narberth’s current market, that means high assessed values, because transaction prices are high.

Apartment buildings are assessed using the income approach — the assessor, capitalizes net operating income at a market cap rate to arrive at market value. In plain terms: the building’s value as real estate is bounded by what it earns as a rental enterprise. And because the income approach takes operating expenses and vacancy off the top before capitalizing, even a fully occupied, well-run building in a strong rental market produces a market value substantially lower than an equivalent number of for-sale units.

This is not a loophole or an anomaly. It is how Pennsylvania has assessed income-producing commercial property for decades. It is also why the “more tax revenue” argument for apartment buildings deserves more scrutiny than it typically receives.

The parcel at 198 Elmwood as an example

The site is 0.42 acres — 18,295 square feet — at the corner of Elmwood and Narberth Avenues, adjacent to the SEPTA regional rail station. The existing building footprint, per Montgomery County records, is 13,344 square feet, occupying roughly 73% of the lot. It is a corner lot, which means two street-facing sides and the associated setback obligations on both.

A 20-unit apartment building — the scale approved by Borough Council in 2017 and consistent with what the proposed 4a amendments would permit by right — would be assessed using the income approach. Here is what that looks like with current market inputs.

Current Narberth rental data from Zumper (June 2026)² puts the blended average apartment rent at $2,400 per month across unit sizes — up 14% year-over-year. That figure is used here as the rent assumption; it is conservative relative to Apartment List’s current one-bedroom average of $2,609.

Income Step	Amount
Gross scheduled rent (20 units × $2,400/mo × 12)2	$576,000
Less vacancy (5%)	−$28,800
Effective gross income	$547,200
Less operating expenses (40%)	−$218,880
Net operating income	$328,320
Market value (at 5.2% cap rate)	$6,313,846
Assessed value (× 30.76% CLR)	$1,942,139
Total annual property tax	$99,213

Of that $99,213 per year:

• Lower Merion School District receives: $68,494
• Narberth Borough receives: $19,159
• Montgomery County receives: $11,560

Those numbers are not trivial. But they need context before anyone draws conclusions from them.

What the site can realistically yield as for-sale homes

The comparison that matters is not “apartment building versus the same 20 units as owned homes.” That comparison is site-constrained out of existence. A 0.42-acre corner lot with a 13,344-square-foot building footprint cannot accommodate 20 individually-titled townhouses. It never could.

What it can accommodate, working through the lot geometry and Narberth’s form-based code frontage and setback requirements, is 4 to 6 individually-titled townhouses or condominiums, with 5 being the most defensible estimate. At 5 units, each parcel is roughly 3,660 square feet — a workable townhouse lot for this neighborhood context.

For new construction on the Main Line, station-adjacent and on Narberth’s premium-priced streets, a realistic price range is $700,000 to $1,000,000 per unit. The table below shows what those scenarios produce in tax revenue, against the apartment building baseline.

Scenario	Units	Total Annual Tax	Borough Revenue	LMSD Revenue	vs. Apartment
Apartment building	20 rental	$99,213	$19,159	$68,494	(baseline)
4 townhouses @ $700K	4 owned	$43,998	$8,497	$30,375	−$55,215 (−56%)
4 townhouses @ $850K	4 owned	$53,426	$10,317	$36,884	−$45,787 (−46%)
4 townhouses @ $1.0M	4 owned	$62,854	$12,138	$43,393	−$36,359 (−37%)
5 townhouses @ $850K	5 owned	$66,783	$12,897	$46,105	−$32,430 (−33%)
5 townhouses @ $1.0M	5 owned	$78,568	$15,172	$54,241	−$20,645 (−21%)
6 townhouses @ $850K	6 owned	$80,139	$15,476	$55,326	−$19,074 (−19%)
6 townhouses @ $1.0M	6 owned	$94,281	$18,207	$65,090	−$4,932 (−5%)

The honest finding here cuts against a simple narrative in either direction, and we want to state it plainly: on an aggregate tax basis, the apartment building outperforms every for-sale scenario this parcel can realistically support. It generates more total revenue than 4, 5, or 6 townhouses at any price point in this range. Anyone who argues that for-sale development would bring in more total tax revenue than the apartment building is wrong, at least for this site and these unit counts.

It is worth noting here that rents and home prices are quite sensitive to interest rates. Lowering interest rates puts negative pressure on rental prices and tends to place positive pressure on homes. If we use a $2000 rental price in the above calculation, the 6 townhouses at $1.0M beat the apartment building.

The real issue here though is not about aggregate revenue at all.

The school district problem

The Lower Merion School District currently spends approximately $22,000 to $25,000 per pupil per year. That number is what makes the per-household tax contribution the right unit of analysis, not the aggregate building total.

A 20-unit apartment building generates $68,494 per year for LMSD — $3,425 per housing unit.

Five owned townhouses generate $46,105 per year for LMSD — $9,221 per housing unit.

Each owned townhouse contributes 2.7 times more school tax revenue per household than each apartment unit — even though the apartment building generates more in total.

That ratio is the crux of the fiscal problem. The apartment building spreads its revenue across four times as many households. Each of those households is a potential source of school enrollment. Each enrolled student costs the district roughly $22,000 to $25,000 annually — an amount that a single apartment unit’s LMSD contribution is 37 cents for the dollar contributed by a home.

Apartment renters in transit-oriented buildings near a commuter rail station in a high-demand school district are not a random sample of the regional population. Smaller units near rail stations attract families who prioritize LMSD access, in some cases as a deliberate strategy. We are not claiming that 20 units will generate 20 enrolled students — student yield rates vary, and we do not have Narberth-specific data to cite with precision. What we are saying is that the arithmetic structure is unfavorable, and that it gets worse as more units are added.

The current baseline: zero

One piece of context that belongs in any honest accounting: 198 Elmwood Avenue currently generates $0 in property tax revenue to any jurisdiction. The former Baptist Church of the Evangel, as a religious use property, has been tax-exempt under Pennsylvania law. Any residential development, apartments or owned homes, represents a genuine improvement over that baseline.

The question the borough and the school district should be asking is not “is some tax revenue better than none?” It plainly is. The question is whether a development form that generates $3,425 per household in annual school district revenue, across 20 households, is the best available use of a parcel that sits 0.1 miles from a regional rail station on the Main Line.

The aggregate revenue from the apartment building is real. The per-household contribution to the institution that will bear the largest share of the cost is less than 40% of what individually-titled development would generate per household.

What we are arguing

An appartment building can generate more total revenue on this parcel than the for-sale alternative could.

What we are arguing is that the “increased tax revenue” case for the 4a amendments does not survive a careful reading of Pennsylvania’s assessment methodology and the school district’s cost structure.

The revenue argument for high-density rezoning, as typically presented, conflates aggregate building revenue with per-household fiscal contribution, and says nothing about what those additional households will cost in schools, roads, and services. Planning decisions that multiply households without proportionally multiplying school district revenue create cumulative fiscal pressure that does not show up in any single project’s pitch to council.

The numbers here are verified against publicly available sources: Montgomery County’s 2026 millage table, the State Tax Equalization Board’s current Common Level Ratio, Montgomery County property records for parcel 12-00-01054-509, Zumper rental market data for Narberth (June 2026), and standard Pennsylvania income-approach assessment methodology. We welcome challenge to any of the inputs.

Thanks for reading.

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Methodology notes: The income approach model uses $2,400/month blended average rent, sourced from Zumper’s June 2026 Narberth rental market data and conservative relative to Apartment List’s concurrent one-bedroom average of $2,609. Other inputs: 5% vacancy, 40% operating expense ratio, 5.2% capitalization rate reflecting current suburban Philadelphia multifamily market conditions. At a 4.5% cap rate the apartment building’s annual tax rises to $114,646; at a 6.0% cap rate it falls to $85,985. The directional conclusions hold across this range. All millage rates and the 30.76% Common Level Ratio are from official 2026 Montgomery County and STEB publications.