Philly’s controller: Gun violence could cost the city millions in lost tax revenue, property value

Reducing gun violence in Philadelphia could translate into millions of dollars more in property value and tax revenue, City Controller Rebecca Rhynhart said Wednesday, revealing an analysis by her office showing that homicides depress home sale prices.

Rhynhart used the report to call on Philadelphia leaders to confront worsening gun violence, urging Mayor Jim Kenney to implement three gun-violence prevention programs that have been effective in cities such as New Orleans and Oakland, Calif. The report’s findings, she said, show that investing in gun violence prevention programs would be cost-effective.

“We need to lean in, work together, and fix this,” Rhynhart said at a news conference outside the Municipal Services Building, citing crimes including last weekend’s shootings of two children.

Her office analyzed more than 220,000 residential property sales and 4,000 homicides that occurred across the city between 2006 and 2018, looking at sales made 60 days before and 60 days after a homicide.

It found that killings in a neighborhood have a sizable effect on nearby residential sale prices, with a single murder lowering sale prices in the immediate neighborhood by an average 2.3%.

Specifically, the report said, a drop in sale price was seen in properties located within three-quarters of a mile of a killing, with stronger impact within one-tenth of a mile.

Rhynhart’s report follows a weekend in which a 2-year-old girl was shot and killed in her home in Kensington less than 24 hours after an 11-month-old boy was struck four times when someone fired at the car he was in in Hunting Park.

With 281 homicides this year through Tuesday night, the city could match or pass last year’s total of 353. Rhynhart, speaking with African American leaders and officials, said the city should implement programs known as group violence intervention or focused deterrence, cure violence, and cognitive behavioral therapy.

“This is not simply a crisis of guns. This is a crisis of inaction,” said State Sen. Anthony Hardy Williams (D., Delaware-Phila.). But, he said, “this is not an intractable problem. There are programs and actions that can work.”

The Kenney administration and City Council added $31.5 million in violence-prevention funding to its five-year spending plan, said Brian Abernathy, managing director. They will soon propose more funding this year for expanding intervention programs and reimplementing a program known as focused deterrence, an initiative Rhynhart is pushing.

“This administration is making substantial investments in attacking the issue of violence, but we do so because we are keenly focused on the human and societal impact. We never want to equate the loss of life to a dollar value," Abernathy said in a response to Rhynhart’s report, citing the gun violence prevention plan released by the mayor in January.

Rhynhart, Williams, and other leaders said their aim was to fight gun violence with action.

“All of us are not doing enough," Williams said. "All of us have blood on our hands.”

If the city homicide rate decreased by 10% in a year, Rhynhart’s report said, the city would bring in $13 million more in property tax revenue. If slayings decreased by 10% for five years, the city would bring in $114 million and gain $71 million over the costs of running the three gun-violence prevention programs, Rhynhart estimated.

“Imagine what this could do for our city,” she said, saying 318 lives would be saved over five years.

The report from Rhynhart’s office echoes similar studies of urban violence. A 2017 analysis by the Urban Institute of gun violence in five cities — Baton Rouge, La.; Minneapolis; Oakland; Rochester, N.Y.; and San Francisco — found that surges in gun violence can significantly reduce the growth of new business and slow home-value appreciation.

Higher levels of gun violence were also associated with slightly lower home ownership rates in some cities, the study found.

Yet the Urban Institute study acknowledged that it can be hard to measure the effect of gun violence on economic indicators such as home ownership rates because they are often determined by a neighborhood’s long-term economic and demographic trends.

Violent neighborhoods tend to have higher property vacancy rates, the study noted, based on interviews with stakeholders in the five cities. The researchers from the Washington-based think tank also reported that absentee home ownership tends to be a problem in communities where gun violence occurs.

Local observers, including Philadelphia economist Kevin Gillen, noted Wednesday that property values and gun violence tend to move “in both directions,” meaning that while crime can reduce property values, low-priced, disinvested neighborhoods can also attract criminal activity. Rhynhart’s study also noted that some neighborhoods, such as Cobbs Creek in West Philadelphia, have seen both sales prices and homicides tick up.

“Over time,” Rhynhart wrote, “these housing sub-markets evolve in complex ways, affected by processes like gentrification and larger economic events such as the Great Recession.”

Rhynhart’s analysis used data from the Philadelphia Police Department and the Office of Property Assessment. The report was peer reviewed by researchers at the University of Chicago, the University of Pennsylvania, and Temple University.