Digging Deeper: The role of property tax in urban redevelopment

Today's installment in Patrick Kerkstra's Plan Philly/Inquirer series on property tax delinquency digs deeper into the relationship between property tax delinquency and blight, and how a strategically-designed collection system could support redevelopment.

It's well worth reading and discussing, as it encapsulates the hard policy decisions that need to be considered in order to even begin changing the status quo. These should be central as the Ross and Taylor bills are amended and improved in Harrisburg, and our city government considers how to weigh in to that process as well as act locally on near-term legislative and administrative reforms.

* What pace of tax or lien foreclosures can the market absorb before property values become depressed and supply outpaces demand?
* How can we make sure the new owners are more responsible than the old ones?
* Does the City want to own all this land in advance of development interest, and take on responsibility for maintenance and liability?
* What will it take politically to move from five entrenched public or quasi-public agencies which own land, to a new system with centralized inventory and processes?
* How can we improve protections for low-income occupants, so we can keep people in their homes and avoid new costs from increased displacement and homelessness?

Fixed Income Needs Fixed Taxes

We need to create a principle that codifies part of what is already happening with low fixed income homeowners in Philadelphia: they stop paying totally.

* Market forces are not material in this case because the tax delinquencies are public knowledge. Most property buyers look at this information.

* The fix for low fixed income seniors is to fix the tax actually assessed at the end of the process to something that the homeowner is capable of paying. If they do not come in to sit down to work out what that amount is, then there is no other assumption that can be made other than the owner is shunting their tax: the parcel should go immediately into the probate process and fall into the hands of the Land Bank (should that pass). That gets property back onto the rolls or into the hands of a more responsible owner. For those who are in hardship, this keeps them in their homes and they pay modest taxes with a degree of certainty that their taxes will not force them out while redevelopment can continue all around them.

This amnesty would end however under two conditions: the property is subject to any case that winds up in Orphans' Court, or a deed transfer occurs. When this happens, the taxes return to market levels.

* Harrisburg will have to force the changes for the City to reduce the complicated network of agencies that are currently running separate and conflicting property management schemes. The City will never reform this on its own because of the number of employees attached to each one of the agencies. I would look to Harrisburg before I would ever would believe City Council would consider making organization changes which will rub City workers the wrong way.

* Enforcement procedures must be codified at the state level and should not be different between any Pennsylvania county. This is to protect equal treatment under the law, and to prevent an equity miasma like the one we are in now faced with.

These are all some very good

These are all some very good questions and I hope that some good answers can be shared with other communities that are finding themselves in this situation; which means pretty much everywhere.


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