Philadelphia’s Land Bank – View from the Committee of Seventy

This primer is presented in its entirety by the Committee of Seventy.  we will be paying attention to the workings of the Land bank and reporting progress here.

HOW PHILLY WORKS 

The Land Bank Finally Lands 

A proposal that has been decades in the making is finally moving forward.

Barring some unforeseen roadblock, City Council will give final approval next Thursday to what will be known as the Philadelphia Land Bank. Its purpose is to expedite the process for turning over 40,000 abandoned properties (10,000 of which are publicly-owned) to responsible tax-paying owners. As usual in Philly, the road to the Land Bank has been bumpy. And the final outcome – achieved after more-public-than-usual disagreements in City Council – leaves no one completely happy.

This edition of HOW PHILLY WORKS explains what to expect from Philly’s about-to-be new Land Bank.

–December 6, 2013 

Disagreements in Council? Tell me about it. 

The disputes in City Council may be the juiciest nugget of the Land Bank story, but you kinda need to know more about what the Land Bank is all about to fully appreciate them. Here’s the headline: it has to do with the extent of City Council’s power.

City Council seems to be more vocal these days. Let me guess: Council will have more power. 

Yes and no. More power than some thought they should have. Less than others wanted. Keep reading.

40,000 vacant properties? That’s astounding. Where are they? 

The largest concentration is in North and West Philly, but a map created by Philly Landworks (which we’ll explain in a bit) shows vacant properties all over the city.

What will a Land Bank accomplish? 

In broad terms, the Philadelphia Land Bank is intended to bring greater speed and efficiency to the process for acquiring, holding, maintaining and selling publicly-owned properties (that are now in the hands of several agencies). The Land Bank will bring the properties under one umbrella: one owner, one inventory and one system to buy and sell property. The Land Bank would also be able to acquire thousands of vacant tax-delinquent privately-owned properties. (According to a 2010 Econsult Solutions, Inc. report, about 17,000 of the 30,000 privately-owned properties are tax delinquent.)

Why is it called a “Bank”? 

Because it virtually holds onto land until a buyer comes along to “withdraw” it – just like a bank hangs onto your money until you decide to take it out.

Who is in charge of publicly-owned property right now? 

At the moment, most publicly-owned properties have three different masters: the city’s Department of Public Property, the Philadelphia Redevelopment Authority, a state-authorized agency that currently implements the city’s vacant land policy; and the Philadelphia Housing Development Corporation, a non-profit 501 (c)(3) organization that provides housing programs for low- and moderate-income city residents. Potential buyers not only have difficulty finding information about who owns properties and how much they might cost, but also have to endure an approval process that typically requires many different steps that can take years, depending on the agency involved.

Didn’t Mayor Nutter try to solve this problem before? 

The mayor launched the Philly Landworks database, which lists information about publicly-owned properties in one place. But that hasn’t necessarily made the purchasing process any easier. Many properties are listed without prices or references to the Council district in which they are located (this is important for reasons we’ll get to). Potential buyers can “express interest” in properties, but then must wait for the agency who owns the property to respond.

Will the new Land Bank let me buy the property it owns as easily as I would a private property? 

No, though the Land Bank will (ideally) make purchasing property easier than the current process.

I thought the whole point of the Land Bank was greater speed and efficiency. 

Those are goals, but remember this is government we’re talking about. The wheels always move more slowly than in the private sector. Potential buyers of properties held by the Land Bank will need approval from City Council (or, more narrowly, the district Council member where the property is located), the Land Bank’s Board of Directors and something called a Vacant Property Review Committee (VPRC).

That’s a lot of steps. What is the Land Bank’s Board? 

After interim appointees, there will be 11 members on the Board: five appointed by the mayor, five appointed by a majority of City Council members and one appointed by these first 10 members. All must have some expertise in areas related to the Land Bank’s business, e.g., planning, real estate development, open space or architecture. And at least four members (two of the mayor’s and Council’s appointees) must represent non-profit or advocacy organizations working in the field of housing or community development or civic associations in low- or moderate-income areas.

Can I get on that Board? 

It depends on whether you meet the qualifications we just talked about. You also can’t be an elected public official. And you must live or have a primary office in Philadelphia.

And the Vacant Property Review Committee? 

Unlike the Land Bank Board, the VPRC is not new. It’s comprised of several city department heads, representatives of organizations that deal with issues related to housing and development, the Chair of Council’s Committee on Public Property and Public Works (now the Sixth District’s Bobby Henon) and the Council President (or their designees). VPRC’s president is chosen by the Council President. You can see the proposed makeup of the VPRC here.

What does the VPRC do? 

According to the Philadelphia Code, it’s an advisory committee that determines whether or not to recommend or certify the sale of vacant properties. The new Land Bank bill adds some new provisions: the VPRC must give 10 days notice of a public hearing on proposed transfers of properties owned by the Land Bank by posting notices on City Council’s and the Land Bank’s websites. The websites must also list all regularly scheduled meetings and the transcripts of completed hearings.

Get back to the Council disagreement. What was that about? 

Seventh District Councilwoman Maria Quiñones-Sánchez, who along with At-Large Councilman Bill Green introduced the Land Bank bill back in February 2012, favored getting rid of requiring review by the VPRC and the approval of the District Council member on whose turf the property sits. (This approval power, known as “councilmanic prerogative,” is an unwritten practice that allows each of Council’s 10 district members to have final say whether projects in his or her district go forward, are stalled, or rejected altogether. You can read more about “councilmanic prerogative” in two earlier How Philly Works installments here and here).

Who opposed Maria Quiñones-Sánchez? 

Probably the last person she wanted on the other side: Council President Darrell Clarke, who represents the Fifth District. He thought the Quiñones-Sánchez plan would give far too much power to the Land Bank’s Board. He supported requiring VPRC review and “councilmanic prerogative” before properties were sold. Clarke also wanted Council to have the authority to determine which properties would be acquired by the Land Bank.

I understand the “councilmanic prerogative” part. But why is the VPRC review so important to Clarke? 

Clarke claims the property disposition process requires more oversight to make sure it is fair and effective. And remember that the Council President appoints the VPRC’s chair.

Who won the dispute? 

Neither. The Land Bank bill keeps intact the role of the VPRC (although with more transparencies about its proceedings we just mentioned) and “councilmanic prerogative.” But Clarke didn’t prevail on giving Council the “first” word on which properties are acquired.

Come on. Someone had to win. 

On balance: Clarke. Getting the last word has more impact than getting the first word.

How can the city afford another agency? 

Creating an entirely new agency is not likely to happen given the limits of the city’s budget. As it stands now, the Philadelphia Housing and Development Corporation (PHDC) is the proposed home of the land bank.

I’ll be more direct: How much will this cost taxpayers? 

According to testimony presented in October at Council’s Public Property and Public Works Committee, there will be a one-time $1.5 million cost to move properties from the three agencies that now own publicly-owned properties into the Land Bank and to build systems within PHDC to track them. Employees who work on the acquisition and sale of publicly-owned properties will be transferred to the new Land Bank. Subject to details still to be worked out with the employees’ union, there should be no change in salaries or retirement benefits. The annual operations costs are anticipated to be in the $4 million range (which is what the three agencies collectively spend now).

So where will the $4 million come from? 

If all goes according to plan, revenue from the sale of properties will offset the cost of running the Land Bank. But it may take some time for proceeds to catch up, because many of the vacant properties are not particularly desired by the private market.

Do other cities have Land Banks? 

Land Banks have been adopted by more than 75 local governments, including Cleveland, Louisville, Atlanta, and Genesee County, Michigan, but Philly would be the largest city to form one. The Land Bank run by Genesee County (home of the city of Flint) automatically starts to foreclose on properties that are 25 months delinquent in unpaid taxes. Since its creation in 2004, the Land Bank has sold about 3,000 properties and demolished 1,300 rundown houses. It now holds over 10,000 properties. Land Banks work better in some cities than others. The devil is in the details.

How will we know if the Land Bank is working? 

One year after it is created, and then annually, the Land Bank’s Board is required to develop a Strategic Plan to guide the acquisition, maintenance and disposition of property. Public hearings will be held in City Council prior to Council’s required approval of annual strategic plans. The Board is also obligated to produce and post online annual performance reports with information about the properties bought and sold and the Land Bank’s progress in meeting annual goals.

What does Seventy think about the Land Bank? Seventy strongly supports the creation of a Land Bank. But we have been outspoken about our concerns about the unfettered exercise of “councilmanic prerogative.” We testified about those concerns in relation to the Land Bank proposal before a City Council Committee in October, which you can read here.

Now what happens? 

Next Thursday is Council’s last scheduled session day before their holiday break. We expect the Land Bank proposal to pass. Then it moves to Mayor Nutter for his approval. Our best guess is that the mayor will sign on. He already named five interim Land Bank Board appointees.

Then it’s smooth sailing for the Land Bank? 

Again, remember that this is government. City Council has to put current publicly-owned properties into the Land Bank through an ordinance (which means some properties could be held back). And the interim Land Bank Board members have many, many key decisions to make. This will be a continuing story.

Originally posted December 6, 2013 via How Philly Works: The Land Bank Finally Lands

AVI and Philadelphia’s Blight and Tax Delinquency Problem

Talk about unintended consequences…with the controversy surrounding the Actual Value Initiative (AVI), the folks in City Hall are coming up with all manner of suggestions on how to collect those millions of dollars languishing in the City’s real estate taxes.  As we all know, the tens of thousands of properties in Philadelphia contributing to blight are largely the same owing millions of dollars in unpaid real estate taxes.

At a legislative briefing yesterday attended by several Council members, several proposals to collect unpaid taxes were brought up, apparently some of which are already being discussed in City and Commonwealth chambers.  Any reform in tax collections will necessarily address the blight problem, as tax-delinquent properties will as a result be sold and developed into productive real estate.

The most cogent of these proposals involves Philadelphia selling its tax liens.  No, not the way it was attempted in the past, with a huge block of liens being sold to one buyer.  That negotiated transaction is so typically Philadelphia. The deal didn’t work for a variety of reasons, depending on who you talk to.

Alan Domb, as astute and established as they come, made a very compelling argument for Philadelphia to begin selling its tax liens to private investors in an open auction, much the same as New Jersey and other states.  Under this model, anyone would be able buy tax liens with a built-in investment return, and the market for Philadelphia’s old tax debt would very quickly be cleared.

Full disclosure: As someone who has bought and put into productive use many properties with ancient debt, I would be thrilled to buy old taxes, because there are so many properties encumbered with debt where the owners are so long gone even our researchers throw up their hands in hopes of ever finding someone to buy from.

Other proposals being talked about are less promising.  Relying on the current collections companies to collect more taxes is pointless.  These agencies can’t even find owners for the current properties, as doing so takes real research and ingenuity.  Attempting to attach to investors other properties is equally futile, as anyone can hold properties in unrelated entities, making verification of ownership impossible.  Relying on the Sheriff Sale process is, well, if you think the AVI calculation is clouded in secrecy, try to fathom how the Sheriff’s office operates.  Enough said.

Tax lien sales is the only way to efficiently clear out all the old debt, and prevent a similar situation in the future.

Ravaged by Neglect

The causes, costs, and effects of property tax delinquency – detailed in this week’s PlanPhilly/Inquirer investigative series –
are staggering. Here’s a by-the-numbers breakdown of the city’s complex tax delinquency issues in bite-sized (albeit stomach-turning) bits.

Read more: Ravaged by Neglect.

 

How delinquency affects you

Deadbeats Damage Their Neighbors

 

Tax delinquent property has a profoundly negative effect on the market value of nearby homes, a new PlanPhilly / Inquirer analysis has found. In all, tax delinquency diminishes the overall tax base by a minimum of $9.5 billion. The average single family home in Philadelphia is worth 22.8 percent less, due to nearby delinquencies. That figure varies dramatically from house to house, depending on how many delinquent properties are within 500 feet.

Click below to see how delinquency affects the value of your property.

via How delinquency affects you | Philadelphia Inquirer.

Property-tax debt is ravaging Philadelphia

We have known this for years and have been working from the private market to help ease the burden. Read Patrick Kerkstra’s revealing analysis of the delinquency/blight connection:

Property-tax debt is ravaging Philadelphia

via Property-tax debt is ravaging Philadelphia.

Help KenzoRenewal Clean up Kensington – Vote Today!

We Support Jamie Moffett in His Efforts to Renew Kensington – You Should Too!

Kensington Renewal rehabilitates blighted houses and turns them into owner occupied homes. With national banks denying sub $50,000 mortgages, it makes it difficult for families to receive loans and become homeowners. As a result of this, there are many abandoned properties in the city. These abandoned homes become a source for violent and non-violent crime to thrive. It is proven that the lower the homeownership rate is the higher the crime rate will become. By Kensington Renewal rehabilitating these abandoned homes, criminal activity will drastically decrease.

Check out more and help KenzoRenewal win a grant to continue its work

via DoGooder Awards – Philly In Focus.

Plan for a Philadelphia city land bank is taking steps forward

The dream of creating a central land bank to deal with Philadelphias epidemic of vacant and abandoned properties has taken several key steps toward fruition in recent weeks.

via Plan for a Philadelphia city land bank is taking steps forward.

L&I: Blight Court

This article is from May, but after my meeting yesterday with L&I, I am reminded that this program is out there and beginning to bear fruit.

L&I: Blight Court starting to see success

Over the past few months, some of Philly’s ugliest buildings with plywood-covered door and window openings have begun to blossom with pretty pink L&I notices that they’re in violation of the City’s Windows and Doors policy. And some of them have actually been fixed up. At today’s City Council Legislative Oversight Committee hearing, Department of Licenses & Inspections spokeswoman Maura Kennedy reported that the 6-month-old campaign to take violators to “Blight Court” is showing returns.  She said there’s been a 35 percent compliance rate in installing the required facade fixes, and 100 properties have been sold by owners who cant or don’t want to bother with bringing their buildings up to code. L&I is also beginning to take properties with L&I liens to sheriffs sale when necessary, and has stepped up the average time for sealing a nuisance property from 10 months in 2007 to 10 days today.

Read more via L&I: Blight Court starting to see success | Philadelphia City Paper | 05/11/2012.

637 Hoffman St. Philadelphia, PA 19148

From Estrellita:

This vacant lot is cleaned twice a year and only after a multitude of calls to 311 from residents of this block. The last time this lot was cleaned by the city was 02/12. The weeds are in excess of 4 feet. There is garbage and animal waste everywhere. A family of feral cats has taken up residence. The flies are so thick that one has to use the sidewalk on the other side of the street. The owner is neither disabled nor elderly and lives .8 miles from this lot. There is no reason that this lot cannot be kept clean. It is an eyesore and a health hazard.

The OPA indicates this property was purchased in 2010 by for $5,600 and the taxes are current.  Likely an investor owns this waiting for more progress in the neighborhood.

I recommend you contact the Vacant Property Strategy Unit in L&I and make them aware of the situation (if you haven’t already).

City of Philadelphia: Vacant Property Strategy

In October of 2011, the Department launched a new initiative as, part of a larger program led by the Managing Directors Office and the Finance Directors Office, regarding how both City and privately owned vacant property is bought, sold, and maintained.

The Department identified approximately 25,000 structures in its database that were believed to be vacant because the owner had either obtained a vacant property license, or had been cited for violations that are the likely indicators of vacancy.  The Department mapped these properties, and depending on the market conditions of the overall neighborhood, planned to use a variety of legal tools to hold owners for the state of their properties.

Having identified these properties, the Departments current initiative is characterized by three main objectives.

  • Finding the Right Owners: In the past, the City faced difficulties in holding private property owners responsible for the conditions of their blighted or vacant properties. In its current initiative, the Department is using a dedicated team of researchers to cross-reference several databases to find good names and addresses for the owners of vacant properties.
  • Utilizing New Enforcement Measures: The Department now enforces the “doors and windows” ordinance passed by Philadelphia City Council that allows the Department to ask the court to find owners $300 per day per opening that is not covered with a functional door or window. In addition, State Act 90 allows the department to ask the court to attach these potentially high dollar fines to owner’s personal property.
  • Dedicating Court Time: In the past enforcement, efforts had run into difficulties getting cases into the court system. In its current initiative, the Department has worked alongside with the City of Philadelphia Law Department and Judge Bradley Moss to dedicate court dates exclusively to address vacant cases. This ensures that these cases flow through the legal process quickly.

Through efforts so far, the Department will collect over $1,000,000 in license and permit fees, fines, and unpaid taxes.

via City of Philadelphia: Vacant Property Strategy.

5025 Schuyler Street, Philadelphia, PA

From a neighbor:

I have been living next to this eyesore for 6 years now with my husband. The owner, a man who we’ve spoken to numerous times, has refused to do anything with this property. Our neighbors have pled with him to sell it, fought with him to clean up the overgrowth year after year and even called him for animals being trapped in the property. Recently, we had vandals break into the property to steal copper piping. Frankly I’m surprised it took this long for people to break in. I credit the delay only to our diligent neighbors and the burden that watching this property has taken on them.

One such neighbor has taken this person to court a number of years ago but I’m not sure what if anything came of the legal action. I’m also not sure what recourse my husband and I have to make this person responsible for this property and its maintenance. My husband and I anticipate trying to sell our house at some point and our property value is perpetually diminishing with each day that this owner takes no action. I’d like to call L&I but know what a bureaucratic mess it can be sometimes. If anyone can give us any helpful information as to how we can get some results, we’d be extremely grateful.

Sincerely,
Frustrated and Fed Up

Map of Philadelphia Redevelopment Authority Available Properties

This map is the Redevelopment Authority’s go-to site for anyone wanting to make an “Expression of Interest” to buy City-Owned property.  It is not clear exactly how this effort will pan out and whether political influence is still required.  The current system requires that anyone wanting to buy a vacant City-owned parcel would typically go to the Vacant Property Review Committee and present their case.  Support form the Council member in whose district the property was located was essential to an approval from the VPRC.

Anyone out there have any success buying from the City?

PRA Available Properties.

via PRA Available Properties.

Wonder What Vacant Property the City Owns?

Well, wonder no more. This is another piece of fantastic work by PlanPhillly and Patrick Kerkstra.

City’s “Front Door” Cracks Open

At last, the city’s enormous inventory of mostly vacant surplus land is being made available online for would-be buyers.

The Philadelphia Redevelopment Authority’s “Front Door” – essentially a database and map of the city’s property holdings, coupled with a streamlined sales process – has been in the works for over a year and a half. Some of it goes live today, albeit in a limited form, on the PRA’s website.

The initiative – which won’t be formally launched until next month – represents the Nutter administration’s most notable achievement to date in Philadelphia’s long-running fight against blight.

There are an estimated 40,000 vacant parcels in Philadelphia, empty lots and abandoned buildings that depress property values, mar neighborhoods and pose safety risks. Of those, more than 12,000 are owned by city-related agencies.

Before the Front Door, would-be buyers of those city owned lots were forced to navigate a confusing bureaucratic thicket of city land-holding agencies with conflicting policies and agendas, without the benefit of a written rulebook.

Now, the Nutter administration contends, developers, non-profits and average residents will be able to easily submit applications to purchase city owned vacant properties through the PRA’s Front Door. And the entire process will be governed by a new policy document (which has been previously reported on by PlanPhilly).

“What’s different about this (policy) is that it exists. There are no policy documents that exist right now for the disposition of land certainly none that are consistent, none that are comprehensive,” said Bridget Greenwald, the new commissioner of the city’s Public Property department.

Check out the map and more here:  City’s “Front Door” cracks open | PlanPhilly: Planning Philadelphia’s Future.

 

The Bad Neighbor Inititative

Bobby Henon is serious about fighting blight:

Bad Neighbor Initiative

Councilman Bobby Henon will engage in an aggressive education campaign to remind everyone in the 6th District that we need to be partners in the fight against blight and other quality of life issues. The goal will be to educate our community about the law and to encourage offenders to comply.

The Bad Neighbor Inititative.

Henon to Absentee Landlords: “We’re Coming After You.”

Henon Goes After Absentee Landlords

Councilman Bobby Henon, who replaced Joan Krajewski in the 6th Dist. two months ago, told a state committee meeting this week in Northeast Philadelphia he’s ready to wage war against absentee landlords and negligent property owners.

Henon testified at a Democratic Policy hearing chaired by State Rep. Mike Sturla (D-Lancaster) and Kevin Boyle (D-Northeast). The hearing was held Tuesday to examine issues dealing with absentee landlords and negligent property-owners at CORA Services in Bustleton.
“If you are renting illegally, then the message is simple: Enough is enough,” Henon said. “We need the tools to go after these illegal rentals – so if we catch a landlord who fails to comply, they will get time.”
Henon told the panel he will introduce legislation in City Council that will wage a campaign directly against negligent homeowners and absentee landlords. Henon said he will use every tool the City has to go after absentee landlords.

In the next several weeks, Henon plans to wage a public campaign against absentee landlords.

Henon said the legislation would include increased fines. Good, responsible landlords, he said, will be recognized. But bad ones will be punished. Any landlord with three or more code violations will be contacted directly, Henon said.

“We are not just talking about one-time fines,” Henon said. “Every day should be a fine. Landlords with three or more code violations will be contacted directly. We will put it in letters to newspaper editors, and in advertisements – whatever it takes.”

Henon said 65% of the calls he has received since he took over the 6th Dist. are directly related to absentee landlords. He said his office staff has generated the data, along with a list of owners who have been directly affected by absentee landlords.

Boyle, who had requested the hearing, said the surge in real-estate opportunities in the “middle-class base of Philadelphia” from New York-based property owners is part of the reason Northeast Philadelphia is plagued by absentee landlords. “This is a quality-of-life issue, and an economic issue,” Boyle said.

For the same price single building in New York would cost them, investors are able to buy numerous properties in Northeast Philadelphia. “In the past, a rental landlord from the suburbs owned one or two properties here, but now landlords from New York have 15-20 properties – it’s out of control.

“We need to get on the ball and deal with this issue,” Boyle said.
A host of individuals joined the panel to testify in the 5-hour discussion, including James White, policy coordinator, Philadelphia Association of Community Development Corps.; and Joseph DeFelice, president of Mayfair Civic Association.

via Henon Goes After Absentee Landlords | Philadelphia Public Record.