Between the fatal building collapse on Market Street and heightened focus on the blight-spreading delinquency epidemic, lawmakers in City Hall and the state capital are – at least for now – uncharacteristically focused on Philadelphia’s long-standing problems with land and property management.
Last week, City Council adopted a bill overhauling the city’s property tax collection policies. Those sweeping changes – championed by primary sponsors Councilman Bill Green and Councilwoman Maria Quinones Sanchez – are scheduled to take effect on October 13.
Moving more slowly is Sanchez’s massive land bank bill, which would consolidate most city-owned land in a single entity, and give that agency power to seize tax delinquent land. Hearings on her bill are now not likely until the Fall.
But there are a number of less publicized measures percolating in the statehouse and City Hall that are designed to wrangle with three distinct but often-related problems: delinquency, vacancy and unsafe buildings. Here’s a rundown of the most critical initiatives.
State Delinquency Legislation
As ambitious as Philadelphia’s delinquency overhaul is, the entire reform could be overridden by the state if a proposed rewrite of commonwealth property tax delinquency law is enacted, as Rep. Chris Ross (R., Chester) hopes.
The latest iteration of Ross’ legislation – which he began working on more than two years ago – was introduced last month.
Like the city’s recent reforms, Ross’ bill establishes a foreclosure deadline for all delinquent properties, a maximum of two years after missing the payment date. But his legislation offers far less lenient repayment plans, requiring that delinquents clear their debt within two years. Given the massive debts accumulated by many Philadelphia property owners – including many low and moderate income homeowners – paying back the full amount in that short a period will almost surely be beyond the ability of many delinquents.
“If someone is in a house that they can’t afford, then keeping them in that house isn’t doing them or their neighborhoods any good. If they’re in a position where they can get current in a reasonable time, that’s something the law should allow for,” Ross said. “But should we provide some sympathy or special accommodation for someone who hasn’t paid taxes in 20 years? That seems like a hard case to make.”
Ross’ bill will likely face significant opposition from some quarters, but he nonetheless hopes to pass it by the end of 2013.
Smaller in scope – and tailored more specifically to Philadelphia’s needs – are five enforcement-enhancing bills introduced late last month by Philadelphia State Senator Michael Stack.
The bills, which Stack says were developed in concert with the Nutter administration and inspired in part by a PlanPhilly/Inquirer delinquency investigation, would give the city sweeping new powers to collect delinquent taxes. If enacted, Philadelphia and every other taxing authority in the state would gain the ability to deduct taxes owed directly from the bank accounts of delinquents. Another bill would give the city the power to garnish the paychecks of delinquents up to 10 percent, an authority that other municipalities already have. Yet another proposal grants the city access to state-controlled financial records on individuals.
“You need to have all the weapons at your disposal to be effective in this war on deadbeats,” Stack said, when asked why existing enforcement options were not enough.
Stack said it was “ridiculous” that the city had let the delinquency crisis grow so large, and argued that Philadelphia would have to convince state lawmakers it was serious about collecting delinquent taxes before the city could expect additional funding from the state.
But Stack’s bills apparently go too far for some in Philadelphia’s Harrisburg delegation, which has balked at the proposals. State Rep. Cherelle Parker told Newsworks that “… it is unnecessary for the city to have that authority until we see what works.”
Parker does support and in fact introduced a bill in January that enables the city and all other municipalities to place liens on property owned by delinquents even when that property is in a different city or county. The legislation – which unanimously passed the House of Representatives last month – should enable the Department of Revenue to more effectively go after out-of-town speculators.
Stack faces a few hurdles. For one, advocates for low-income homeowners seem sure to oppose at least parts of his proposals. Second, city delinquency records are often inaccurate, raising the specter of the city garnishing the wages of the wrong person. And there is one bill in the package – SB971 – that restricts public access to tax records, a measure that could be interpreted by reporters and activists as an initiative designed to make the system less transparent.
“We’re going to look at that bill and see if we can make it more narrowly tailored. You have to protect privacy, but I don’t want to have a chilling effect on reporting,” Stack said.
Local Delinquency Reforms
The big bill that cleared council last week wasn’t the end of the city’s tinkering with its delinquency policies.
- The Nutter administration is taking bids for delinquency “sequestrators,” who would be empowered to take over delinquent property and given the opportunity to collect rent, make repairs and – the key part – to pay taxes on the property. All of this is enabled by state law, but the city hasn’t used the power in recent years.
- Councilman Green on Thursday introduced a bill explicitly providing for the possibility of tax lien sales, where the city sells a delinquent’s debt to third parties, who are then empowered to pursue collection action against the delinquent property owner. It’s a process widely used in other cities, but not in Philadelphia, in part because of concerns about potential abuses by the lien purchasers.
- Last Thursday, following the Market Street collapse, Council President Clarke resurrected an idea he has floated before on several occasions: a tax on vacancy. The ordinance, which was co-sponsored by Sanchez, would levy a tax of 10 percent of the assessed value of any building left vacant for more than a year. That rate would increase all the way up to 18 percent for properties left vacant for more than a decade. In the past, Clarke said, the proposal had gone nowhere because of concerns about its constitutionality and the city’s ability to determine whether a property is vacant. Now, Clarke contends, the technology exists to track vacancy, and he is confident the ordinance could pass constitutional muster. “If you sit and allow a property to be a blight on the community with no attempt to market it, or to bring the property online, then we should be able to propose a tax on that,” Clarke said. The bill is sure to be opposed by landlords.
- Philadelphia State Rep. John Taylor – who pushed through the legislation authorizing the creation of land banks – is now looking to expand the blight-fighting Act 135, which gives neighbors of blighted buildings the ability to petition a court and have a conservator appointed to bring the blighted building back into repair. Act 135, which has rarely been used, was recently invoked by a neighbor of the blighted Royal Theater, owned by Kenny Gamble’s Universal Companies. Taylor’s proposed amendments to the bill would expand Act 135 to include vacant lots and make non-profits eligible to serve as conservators.
- Using executive orders and administrative powers, Mayor Nutter has already changed city policy on demolition permits and site inspections in direct response to the Market Street collapse. The new regulations require demolition applicants to document the experience and qualifications of the demolition crew and to provide an engineer’s report on neighboring properties. Licenses and Inspections would be required to investigate complaints received regarding demolition sites within 48 hours, among other new rules.
- Nutter is also asking for a series of further reforms which would likely require City Council approval. These include licensing of demolition contractors and a background checks – including drug screening – for heavy equipment operators.
- City Council, meanwhile, seems unlikely to simply follow the administration’s lead. On Monday, Council President Darrell L. Clarke announced the creation of a special committee to investigate the deadly collapse, including a “broad review” of city permitting processes.