Property Address: 2629 N 12th Street, Philadelphia, PA 19133-1102
Property Owner(s): Bon Management LLC 421 Maplewood Ave Merion Station, PA 19066
Last Sale: 5/26/2010
Sale Price: $5,091
Taxes Owed: $0
Improvement Description: Row 2 Story masonry
Beginning Point: 197′ N Huntingdon St
Exterior Condition: Sealed / Structurally Compliant
Zoning: RM1 Residential/Residential Mixed-Use
Nearly this entire block is vacant. They are not only privately owned properties but also owned by The City of Philadelphia.
Most of the properties on the 2600 block of north 12th street suffers from fire damage.
The NY Times takes notice of Philadelphia’s Land Bank plan.
Philadelphia Forges Plan to Rebuild From Decay
Mark Makela for The New York Times
An estimated 40,000 vacant, derelict or underused buildings and lots — both publicly and privately owned — that are candidates for the Philadelphia’s new Land Bank, an ambitious program that is the latest effort to clear up blighted neighborhoods.
By JON HURDLE
Published: December 31, 2013
PHILADELPHIA — On a desolate North Philadelphia street, an isolated block of five Victorian rowhouses is surrounded by vacant lots and a commuter rail line.
All but one of the two-story houses are vacant; burn marks outline boarded-up windows and a door on one building, and two display metal signs announcing they are up for property auction by the Philadelphia Housing Authority. The open rear entryway of one reveals a mess of bedding on a sheet of plywood, suggesting the derelict property does in fact have an occupant.
The city lists the market value of each empty house at $27,900.
The houses, little more than a mile from downtown Philadelphia, are among an estimated 40,000 vacant, derelict or underused buildings and lots — both publicly and privately owned — that are candidates for the city’s new Land Bank, an ambitious program that is the latest effort to clear up blighted neighborhoods.
Philadelphia, with a population of about 1.5 million, is the largest American city to adopt a land bank, experts said, and could become a model for other cities like Detroit that have an even bigger problem with vacant property.
While land banks have been around for several decades, including one in St. Louis that was set up in the 1970s, several dozen exist now, with newer versions emerging in places like Syracuse and Macon, Ga.
Supporters point to success stories elsewhere.
For example, in Flint, Mich., Saginaw Street has been transformed into a busy commercial and residential center after the local land bank’s acquisition of three buildings that had been vacant for as long as 30 years, said Frank Alexander, a professor of real estate law at Emory University and an author of land bank laws in many cities.
The street “bears almost no resemblance to what it was 15 years ago,” Mr. Alexander said. “The land bank was able, by addressing the worst properties, to accomplish catalytic transformation.”
But not all land banks have succeeded. Critics are concerned about a provision in the ordinance creating the Philadelphia Land Bank that requires City Council approval for all sales, saying that could delay the disposal of properties and bog down redevelopment. An early land bank in Cleveland failed, for example, because it required legislators to sign off on all acquisitions and dispositions, Mr. Alexander said.
“If the City Council ends up delegating and deferring to the board of directors of the land bank, then it can move pretty well,” Mr. Alexander said. “But if it says ‘We want to hold hearings on every acquisition and disposition,’ then it will very quickly grind to a halt.”
And it takes time to assemble buildings and land that are attractive to developers, said Kelly Clarke, executive director of the Kalamazoo County Land Bank, in Kalamazoo, Mich.
“It’s not always about getting properties sold quickly,” said Ms. Clarke, who said her organization had sold about 50 homes, demolished 40 others and sold about 150 empty lots since it was established in 2009.
Rick Sauer, executive director of the Philadelphia Association of Community Development Corporations, which has helped lead the Land Bank initiative, said he believed it would offer developers a much easier process to navigate. Previously, developers sometimes walked away from potential projects if they had to acquire land or buildings from different city agencies with different requirements. Many of these vacant properties can be found on several agencies’ books.
The new city ordinance aims to consolidate ownership of the properties under the roof of the Land Bank. And to encourage developers to buy through one-stop shopping, the city ordinance also gives the Land Bank power to acquire title to privately owned vacant properties if they are delinquent in taxes. Officials said about three-quarters of Philadelphia’s vacant properties were privately owned and many were behind on taxes. That has deterred prospective buyers who have trouble tracking down owners of long-abandoned properties or dealing with liens on the buildings.
Once the Land Bank is operational later this year, developers will be in a better position to take control of whole blocks that currently show a “gap-tooth” patchwork of public and private buildings and land, proponents say.
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
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.
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.
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
Philadelphia, like many older cities, is faced with abandoned lots due to population loss. Since 1998, the City and OHCD have worked closely with the Pennsylvania Horticultural Society PHS to clean and green vacant lots and transform them into neighborhood assets.
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.
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).
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.
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?