Three years later, the Sheriff’s Office resumes auctions for 1,000-plus tax-delinquent properties

Tax-delinquent properties in Philadelphia are once again going to auction, ending an extended hiatus that left the city with tens of millions of dollars in uncollected revenue and stymied anti-blight initiatives.

Last week, the Sheriff’s Office held its first such auction in more than three years, resulting in the sale of 29 properties, as it begins to clear a backlog of more than 1,000 properties previously slated for sale. A second sale occurred Tuesday.

The reboot after such a long delay has put housing advocates on alert. They’re worried that tax-delinquent homeowners might be caught off guard if they find their properties going up for sale now because of tax petitions the City of Philadelphia had filed several years ago.

And there are concerns among bidders about whether the Sheriff’s Office will be able to handle the additional workload, given existing delays in processing deeds from past sales.

In-person tax sales were paused in March 2020 at the onset of the COVID pandemic, then briefly resumed in April 2021 after Sheriff Rochelle Bilal switched to an online platform, using the real estate auction site Bid4Assets.

Housing advocates and some City Council members criticized that move, and city officials soon learned that Bilal had circumvented the city’s standard contracting procedures and agreed to a no-bid, six-year deal with Bid4Assets without approval from city lawyers.

That led to a standoff between the Sheriff’s Office and the city Law Department — under both the Jim Kenney and Cherelle L. Parker mayoral administrations — that left trash-strewn lots and abandoned buildings unavailable for redevelopment.

It also undid years of progress the city had recently made in collecting delinquent taxes. As of late 2023, the Revenue Department estimated that the city was owed about $170 million in back taxes, an increase of nearly $40 million since 2019.

Parker, in her March budget address to City Council, estimated that the ongoing pause on tax sales had cost the city and school district an estimated $35 million in tax revenue — “dollars,” she said, “that could have been invested in classrooms and in rec centers or on building affordable homes.”

During the pause, property owners, including land speculators, had essentially been free to ignore tax bills and threats of auction.

The auctions were restarted this month after the Parker administration reached an agreement with Bilal to sign a new contract with Bid4Assets — this time with the Law Department’s approval.

“The city is grateful to fully resume the important function of Sheriff’s Sales to accomplish the goals of collecting much needed revenue for the city and school district while remediating blight,” said Ava Schwemler, a spokesperson for the city’s Law Department.

Many of the properties listed for the July 17 sheriff sale appeared to be vacant. In general, most tax-delinquent properties sold at sheriff sales are not owner-occupied, according to city estimates.

Ultimately, most of the 103 properties initially slated for the auction were not sold that day. Postponements are typically due to a bankruptcy filing or owners agreeing to enter into a payment plan. Community Legal Services, a nonprofit that provides legal aid, said it provided counseling to five owner-occupants whose homes had been targeted for auction.

“We remain concerned about the city giving adequate notice and doing as much as possible to keep people in their homes,” said Monty Wilson, a senior attorney at CLS. “We are concerned that homeowners will not know about the sales.”

Wilson noted that, so far, the city has been responsive on that issue, issuing an additional round of notification letters advising homeowners to seek relief ahead of the auction. Schwemler said the city would continue sending those additional letters to owners and occupants.

“The city should do everything possible to ensure that nobody is [living at] home at the time of the sheriff sale,” Wilson said. “The cheapest form of housing we can give someone is to help them stay in their own home.”

Bilal spokesperson Teresa Lundy declined to comment on the sales resuming, other than to say the Sheriff’s Office holds auctions only for properties that it has a court order to sell.

“The Sheriff’s Office has no control over what properties go up for sale,” Lundy said in an email.

Community garden advocates also are scrambling to try to prevent tax-delinquent lots from being purchased by developers for market-rate housing.

Mara Henao, a board member with the Iglesias Gardens in North Philadelphia, said the city could do a better job of notifying local land stewards when a longtime vacant lot might be going up for auction.

“On paper, they look empty,” Henao said. “But you go to visit them and they might have a garden. Gardens and side yards that are being taken care of by people are going to be up for sale, and we’re going to lose a lot of these gardens.”

The city has taken some steps to preserve neighborhood gardens, including buying more than $1 million in liens from U.S. Bank last year for 91 parcels of community gardens.

And last month, Parker signed a bill that was introduced by Councilmember Kendra Brooks that preserves the Land Bank’s ability to bid on properties that go to auction, with the goal of preserving community gardens with old tax liens.

“Ideally we’d like to see there be a really clear pathway for community ownership of land,” said Brooks spokesperson Kathleen Melville.

The resumption of tax sales this month will also increase the workload at the Sheriff’s Office even as buyers complain about existing delays in recording deeds from past mortgage foreclosure sales.

The Inquirer has reported that it has been taking seven months or longer for some buyers to receive deeds after they purchase a property at auction.