Neighborhood Improvement Districts a matter of ‘timing and politics’

Try to imagine, for a moment, a governmental authority proposing a tax increase on constituents, the revenue from which would be put toward extra safety and cleaning services. Now imagine the requisite outcry from taxpaying constituents. Now, finally, imagine that the outcry comes not from people who are paying the extra tax, but from those whose neighborhoods will presumably be made cleaner and safer at no extra cost to them. 

You have just imagined the North Central Neighborhood Improvement District, which is being supported largely by the people who would be paying into it–owners of rental properties–and opposed mainly by people who would reap its supposed benefits for free–owner-occupants. 

The bill that would create the NID was subject to a City Council Rules Committee hearing last week. Council will be able to act on it after a 45-day period during which 51 percent of assessed property owners would have to vote against the NID in order to kill it. 

The catch is “assessed property owners.” Owner-occupants, whose homes will not be subject to the fee, don’t have the opportunity to vote against the bill. Several longtime community residents testified at last week’s hearing that they oppose the NID not because they don’t want extra cleaning and safety services in their neighborhood, but because they’re being left out of the process. The District was proposed in response to increasing complaints from community residents about Temple-student housing in the neighborhood. 

According to William Carter, an aide to Councilman Darrell Clarke, the NID was only one of a number of legislative options Clarke’s office considered to combat the symptoms of the student-housing boom. Carter said Clarke considered instating an outright ban on student housing, like the one that exists in Yorktown, but decided against it because of its questionable legality. He said Clarke also considered employing a “student responsibility bill,” but decided it wouldn’t be effective enough. 

Clarke and some Temple-area landlords agreed to pursue a NID, inspired particularly by University City District, according to Carter. 

But while that District is looked to as a successful model for a special services district, it is not, legally speaking, a Neighborhood Improvement District, nor a Business Improvement District. It’s a private, nonprofit corporation that is funded entirely by voluntary contributions. Sixty percent of its operating budget comes from area institutions–Penn, Drexel, University of the Sciences, and so on–according to Lori Brennan, director of marketing and communications for the District. 

The NID proposed by Councilman Clarke’s office is modeled in intent on the University City District, but in reality on the Community and Economic Improvement Act, which defines a Neighborhood Improvement District and prescribes the procedures a municipal corporation most go through to enact one. 

“People don’t fully understand what [NIDs] are,” said William Carter. “That’s why the process of forming [one] is so long.” 

According to the state Act, a NID is defined as, “A limited geographic area within a municipality, in which a special assessment is levied on all designated property, other than tax-exempt property, for the purpose of promoting the economic and general welfare of the district and the municipality … Such districts shall be referred to generally as neighborhood improvement district (NID) and specifically as business improvement district (BID), residential improvement district (RID), industrial improvement district (IID), institutional improvement district (INID) or mixed-use improvement district (MID), depending on the type district established.”

Whether you’ve got a business improvement district or an institutional improvement district, in other words, they’re all NIDs, legally speaking. The Act also describes the powers of the municipal corporation, or Neighborhood Improvement District Municipal Authority (NIDMA), and requires the 51 percent opposition to kill the NID. 

“The language of the state Act probably needs to be modified,” said Carter. He added, “A lot of the opposition we’ve been seeing is based on misinformation.” 

Carter said residents were worried by provisions in the bill, taken from the Act, that describe the NIDMA’s powers. In particular, many residents felt that their neighborhood autonomy was threatened by a few of the “Powers” vested in the NID leadership: to “purchase, own, construct, renovate, develop, operate, rehabilitate, manage, sell and/or dispose of real property,” to “acquire by purchase or lease real or personal property,” and to “impose liens on property for the nonpayment of property assessments.”

Carter said the legal language of these provisions suggested to many residents that the NID would have more power than it would in actual practice. 

Karen Fegely, director of neighborhood economic development for the City’s Commerce Department, agreed.

“I think it’s confusing,” she said. “I think [residents] get the notices in the mail, and they’re lengthy, and it’s written in legal-speak, and it’s hard to know how it’s going to affect people.” 

Marco Mandri, a California-based consultant and president of New City America who has worked on creating special services districts nationwide, called the Pennsylvania Act “an OK law.” 

“What it has is a protest,” Mandri said, “but it doesn’t have a support factor.” 

Other municipalities in Pennsylvania create special services districts under the Neighborhood Improvement District Act, which calls for a lower threshold of opposition, 40 percent, in order to vote down a district. A proposed improvement district in Pittsburgh’s South Side, for example, would only need to be opposed by 40 percent of residents in order to be killed.

“Cities across the country are looking to implement improvement districts, because they work,” said Susie Puskar, neighborhood outreach coordinator for the South Side Improvement District in Pittsburgh. 

But she admitted that her District is facing some opposition from those who would pay an extra assessment. That District, unlike the North Central NID, would impose an assessment on all properties within the NID boundaries. However, the assessment differs based on property “class,” with certain types of businesses paying the most, residents paying less, and an exemption for senior citizens. 

The South Side Improvement District has been in the works since 2010, according to Puskar, and still has “a minimum of four months” to go before they know whether it will ultimately be approved. 

“If [NIDs] are formed with the support of the folks in the neighborhood, they can be very successful,” Puskar said.

After hearing PlanPhilly’s description of the North Central NID, Marco Mandri said it sounded like the group was “trying to skirt around voters.” He said communities that want these districts should “just bite the bullet” and require all property owners to pay an extra tax. 

But that, of course, is what caused the proposed Callowhill Reading Viaduct Neighborhood Improvement District to fail late last year. 

“It’s always based on timing and politics,” said Mandri. He added, “Gentrification occurs whether or not you have a special services district …”

As Councilman Clarke has indicated, the fate of the North Central NID is ultimately in the hands of area landlords. 

“I think most of it really is about the process,” said Karen Fegely, “the community process and the outreach … While it takes 51 percent to object, you still really want to have a significant amount of buy-in to make this successful.”

Contact the reporter at jaredbrey@gmail.com and follow him on Twitter @jaredbrey