New study puts a hefty price on Philadelphia blight

The problem of blight has confounded Philadelphia mayors for decades and generated volumes of policy papers.

Now comes a new study, and an urgent warning: Do something posthaste, because vacant land and abandoned buildings are costing us dearly.

Released Wednesday, a report prepared for the city's Redevelopment Authority (RDA) and the Philadelphia Association of Community Development Corps., representing nonprofit developers, has taken a stab at calculating the financial impact of 40,000 vacant properties.

Among the findings:

Philadelphia's surfeit of blighted properties undermines the total value of real estate in the city, estimated at $50 billion, and drags it down by $3.6 billion, an average of about $8,000 per household.

The city is spending $20 million a year to maintain vacant lots, clean up waste, demolish or seal dangerous buildings, and provide extra fire and police protection.

The owners of 17,000 blighted parcels owe the city $70 million in back taxes, a sum that increases $2 million a year.

"This is costing all of us," said Lee Huang, a director of Econsult Corp., an economic research firm that led the study. "All of us are losing property value, household wealth, and the city is not collecting the tax revenue it's due."

Econsult calculated that if Philadelphia could change the way it manages vacant property, it could "reactivate" development in certain neighborhoods with healthy real estate markets.

For city-owned land, that could mean coordinating the processes by which various agencies acquire, assemble, and dispose of abandoned property. For non-city parcels, it could include speedier foreclosures on tax-delinquent land and buildings.

By examining census tracts with the strongest potential for development, the Econsult team estimated that reforms could spur the building of 3,400 new housing units in five years. It looked at areas where home values exceeded the average cost of new construction - roughly $192,000 for a 1,500-square-foot home. Those sections included Northern Liberties, Kensington, Passyunk Square, Queen Village, University City, the Art Museum area, and parts of Northeast Philadelphia.

Brian Abernathy, chief of staff for city Managing Director Richard Negrin, said Mayor Nutter had made those reforms a priority.

According to the study, one-fourth of the city's abandoned properties are owned by city agencies, including the RDA, Department of Public Property, and Philadelphia Housing Development Corp. The Philadelphia Housing Authority, a state-chartered, federally funded agency not controlled by the city, accounts for about 1,800 vacant properties, or 4.5 percent of the total.

Even so, Abernathy said, the perception is that the problem is the city's to fix, that "we own the problem."

Nutter is only the latest mayor to try to eliminate blight. Former Mayor John F. Street raised nearly $300 million in bonds to demolish crumbling houses and acquire vacant parcels through eminent domain, though the program fell short of its goals.

Lacking the funding of Street's Neighborhood Transformation Initiative, the Nutter administration is working from within to improve the city's management of vacant land, Abernathy said.

Under Nutter's direction, Negrin and Finance Director Rob Dubow have assembled city managers from 14 agencies to find more effective ways to banish blight.

One of the first changes will be the consolidation of all city-controlled vacant land into one digital master list. The RDA and public property department have recently posted their holdings online; next, the lists will be combined.

The agencies will also work to coordinate the disposal of vacant properties. As it stands now, each has its own system for handling land deals.

People who want to buy vacant land from the city will be able to turn to one source for information about abandoned lots or buildings, Abernathy said.

Another goal of the mayor's vacant-land group: helping the Sheriff's Office pick up the pace in pursuing tax delinquents. Abernathy called the threat of a sheriff's sale "a stick to make people pay."

John M. Carpenter Jr., the RDA's deputy executive director, said it takes 10 to 25 years before the Sheriff's Office puts a tax-delinquent property up for sale. In other parts of the country, such as Genesee County, Mich., such foreclosures are accomplished within three years.

The Philadelphia Sheriff's Office handles about 100 sales a month. It is working with the city's revenue, finance, and legal departments to increase the volume of sales, he said.

Rick Sauer, president of the Philadelphia Association of Community Development Corps., said the report on vacant land was aimed at quantifying the costs of the current systems. How the city reforms those systems, he said, is a conversation that has just begun and must include political and government stakeholders as well as private developers.

If people are to understand the urgency, Sauer said, "It's important to identify more clearly the fiscal impact on the city."