Kenney crackdown on flipping city lots falls short, critics say

This story originally appeared on PlanPhilly

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Is it possible to reform Philadelphia’s corruption-prone system of selling public land without removing City’s Council’s informal power over sales

That’s the question a day after Mayor Jim Kenney introduced changes to the city’s land dispensation process.

The overhaul, enacted through executive order, places additional checks on land sales and deed restrictions aimed at preventing property sold by the city from being left idle or flipped through a resale.

But while the directive intends to reduce political influence over sales, it does not directly limit City Council influence over sales or otherwise restrict “councilmanic prerogative,” the informal control district council members hold over development issues on their home turf.

“The mayor’s order addresses a couple weak spots, but the entire system needs a full review, including Council’s powerful role,” said Pat Christmas, a spokesman from government watchdog Committee of Seventy. “That’s why we joined [a] call made by affordable housing advocates for the controller’s office to get involved.”

The new directive comes in the wake of a Philadelphia Inquirer report detailing Councilman Kenyatta Johnson’s efforts to steer two valuable city-owned parcels in his South Philadelphia district to a childhood friend-turned-developer –– at a steep discount.

Johnson had directed reluctant city agencies to sell two lots in Point Breeze to friend Felton Hayman for $65,000 in August, far below their market rate. Hayman grew up with Johnson in South Philadelphia.

The Philadelphia Redevelopment Authority, which approved the sale under advisement from Johnson, had asked for Hayman to develop a plan to mete out construction work to minority, women or disabled contractors. He failed to do so and flipped the lots to a Baltimore-based developer one month later for $230,000.

Kenney’s changes include new deed restrictions containing a clawback provision that requires land to be improved within 18 months and otherwise maintained for a term of five years before resale.

“We want to make sure that people cannot sit on them and speculate on them,” said Jim Engler, Kenney’s chief of staff. “And also that they cannot turn around and flip the property for some type of additional gain that the city could have otherwise realized by selling the property to a second purchaser.”

Sales would require similar sales to instead be approved by Public Property Commissioner Bridget Collins-Greenwald, who reports to the mayor, and the Vacant Property Review Committee, which is chaired by an appointee of Council President Darrell Clarke.

The changes took effect immediately. The mayor’s reforms are similar in scope to those included in a new piece of legislation introduced by Clarke and Johnson last week.  The Council measure included a new rule requiring the vacant property committee inspect properties 18 months after a title transfers to check that the new owner has done what was promised when the sale was approved.

Clarke has largely rejected suggestions that lawmakers’ influence ought to be curtailed in the wake of the Johnson scandal.

He said this week that no one else understood the nuances of Philadelphia neighborhoods better than district Council members.

“In all honesty, and I know I’m biased, I feel a little more comfortable with the person I elected and I voted for than some bureaucrat,” he said.

Instead of limiting Council powers, Clarke wants to extend reforms to other agencies involved in managing thousands of publicly owned lots –– such as the Land Bank or the Philadelphia Housing and Development Corporation.

“We need to have some uniformity in property disposition,” he said.

The mayor’s office could not immediately say if officials were considering putting similar new deed restrictions on land sold at sheriff sales. The city auctions off hundreds of tax-delinquent properties annually through the Sheriff’s Office in order to recoup outstanding tax debts, and speculation is common.

Mike Dunn, a spokesman for Kenney, did not immediately know if the mayor had broached the issue with Sheriff Jewell Williams.

Until recent years, the District Attorney’s Office was also responsible for the auction of more than a thousand properties seized through civil asset forfeiture. Although District Attorney Larry Krasner has largely restricted these types of sales since taking office, Dunn could not say if the city had discussed imposing similar requirements on that office.