New land bank in Philadelphia could boost blighted areas

Philadelphia is home to more than 40,000 vacant properties. A new land bank could help get them back on the tax roles and improve neighborhoods.

On October 28, the list of people testifying before the Philadelphia City Council’s Committee on Public Property and Public Works seemed endless: Hour after hour, witnesses from every corner of the city were agreeing that living next to a vacant lot is an awful experience.

“It’s become this area where people dump their trash; it attracts stray animals; people go in to hook up and do drugs; it’s just nasty and dangerous,” Rachel Sensenig told me, reiterating her testimony about the “huge” vacant lot next to her home in Northwest Philadelphia. “We do good stuff in our back yard, but there’s just a fence separating it. … No one wants to barbecue next to a pile of trash.”

Sensenig is an administrative pastor with Circle of Hope, a youth-oriented Christian church that is one of 46 members of the grassroots Campaign to Take Back Vacant Land. She was referring to the testimony of another attendee, who no longer holds gatherings outside of her North Philadelphia home due to the huge accumulation of dumped garbage in the vacant lot next to her house. She woke up one morning to find trash piled taller than the top of her head.

Not all of Philadelphia’s 40,000 parcels of vacant properties are creepy lots, though: There are also storefronts and boarded-up row houses in bustling commercial corridors and middle-income neighborhoods, properties that are owned by a variety of unsavory types who sit on them waiting for the value to rise higher.

Blighted properties drain public coffers, contribute nothing to the tax base, and serve as havens for crime and trash. After years of work, Sensenig and other activists hope that a bill passed this December will finally provide Philadelphians with a tool to confront this colossal problem: a land bank.

The land bank law, which was championed by Councilwoman Maria Quiñones-Sánchez, will create a public agency that could potentially bring many of those vacant parcels under one roof while simplifying the acquisition process for those interested in obtaining property. Philadelphia will be the largest city yet to adopt a land bank.

Vacant land policy doesn’t generate the eye-catching headlines of a homicide or the readily apparent tragedy of the ongoing underfunding and privatization of schools. But it is an important factor in the city’s efforts to recover economically from the post-industrial blues. Blighted land and crumbling buildings are millstones around the necks of the population (which has recently been growing for the first time in decades).

Many Philadelphians believe the land is being squandered because the city's land management system is broken. The current structures in place are inadequate to deal with the 30,000 parcels held by private owners, a majority of them tax delinquent, and the 10,000 parcels controlled by a snarled thicket of four public agencies, each with their own distinct and intricate acquisition process that can last years without conclusion. (According to the Philadelphia Land Bank Alliance, these four entities annually sell a mere 1 percent of their properties back into productive use.)

Meanwhile, a report from the consulting firm Econsult estimates that those 40,000 parcels cost the city more than $20 million a year in maintenance costs. The 17,000 parcels that are tax delinquent accrued $70 million in back taxes by 2011, with an additional $2 million added each year. Then there’s the immense drag these eyesores have on surrounding property values, which Econsult says ranges from reductions of 6.5 to 20 percent, depending on the extent of a neighborhood’s blight.

“[Vacant parcels] tend to be in neighborhoods with particularly high concentrations of poverty, which is why the land bank is a very critical public policy initiative: It’s really unjust to saddle those residents with this vast map of blight and vacancy,” says Beth McConnell, policy director of the Philadelphia Association of Community Development Corporations. (The organization is a major booster of the land bank because they hope to use it to establish more affordable housing in the city.)

That’s why the land bank bill has absorbed so much of Councilwoman Quiñones-Sánchez's time and energy. Her district is home to the second-highest concentration of vacant land in the city, which relates to the fact that, as she puts it, “44 percent of the folks live [on] under $20,000.”

To rid her neighborhoods of some of the blight, the land bank would, potentially, do two things: Unite the 10,000 parcels of vacant, publicly held property under the auspices of the land bank, and imbue the new agency with the authority to buy private parcels and scrub them of debt.

Because so many of the privately held parcels are tax delinquent, it is currently too expensive for many potential investors to take a risk. Pre-land bank, the only thing the city could do to address this was to put the property up for a sherriff's sale, a blunt process where the only consideration is which bidder has the most money.

The land bank will be able to obtain properties, erase their debt load, and then sell it to private bidders based on whatever standards it chooses to adopt (which could potentially include an emphasis on those who have an actual plan for the lot, not speculators who will just sit on it.)

These sales would be subject to the approval of the city council and, per an amendment introduced by Council President Darrell Clarke, the Vacant Property Review Committee, which consists of representatives of numerous city agencies.

Although the internal regulations to govern the land bank have not yet been written, supporters hope a criteria for sale will include an evaluation of how it will benefit the community: The legislation requires a plan assessing community needs, setting targets for community beneficial uses, and evaluation of whether those targets are met.

Philadelphia isn’t the only city to deal with blightlords and the vacant detritus of the postwar urban crisis. And land banks aren’t a new response to these too common issues.

One of the first was established in St. Louis in the early 1970s, and in recent years they have spread across the Midwest. Alan Mallach, senior fellow at the Brookings Institute, is convinced that the policy stands a far better chance of success in Philadelphia than anywhere else it has been tried.

Access to land is, of course, essential if a community is to realize its development capacity—but there has to be the population and capital to support it as well.

“A land bank is not a panacea. It will not create a market for land where none exists,” Mallach told the City Council committee in October. “People who expected land banks to turn around distressed Rust Belt cities like Flint [Mich.] have been disappointed."

But, Mallach added, Philadelphia is different: "Philadelphia has made remarkable strides in stabilizing its population and housing market over the past decade. … In many parts of the city, housing demand is strong. With the right steps, that demand can spread to areas which, up to now, have seen little progress. Demand is still fragile in many areas, but it’s there.”

The list of groups that testified at an October hearing in favor of the legislation certainly augments that notion: The United Food and Commercial Workers (UFCW) testified about the need for public housing; Weaver’s Way Co-op about its desire for more urban farmland. Similarly adamant testimonials were heard from the Association of Real Estate Developers and the Small Business Association.

But many of the advocates fear that the law that was eventually passed may be too compromised to achieve the desired effect. The reigning political norm dictates that any sale of city land must be introduced by the councilperson of the district in question, and then approved by the whole council. This effectively gives veto power to district council members, who could choose to not introduce the resolution for sale for a good reason, bad reason, or no reason at all. (This norm is called “councilmanic prerogative.”)

City Council President Clarke’s requirement that the Vacant Property Review Committee approve sales will enhance his power to hinder the easy transference of city-owned land from behind the scenes with little political consequence.

Some advocates fear that, under these circumstances, the land bank would knock tax-delinquent slumlords off their perch only to install city councilmembers in their stead.

“I understand that people say perfection is the enemy, but this unwritten rule of councilmanic prerogative has stalled progress for years,” said Ellen Kaplan, vice president of Committee of Seventy, a local government reform group. “It’s the opposite of what a land bank bill is supposed to do. It’s supposed to be efficient and clear, but if they have the ability to say, ‘I’m not going to introduce this resolution,’ then I’m really worried.”

There may well be reason for Kaplan to be apprehensive. The St. Louis land bank was undercut by a similar system where an alderperson basically had veto power over land deals involving publicly held parcels in their district. The Show Me Institute, a conservative Missouri think tank, found that the city’s land bank rejected 43 percent of the offers it received between 2003 and 2010 (often because it hoped to hold out for more substantial development). And in 33 percent of cases, the city countered with an ask for more money. While some of these objections may have been valid, the impression communicated by the Institute is one of land hoarding.

Nevertheless, advocates believe the land bank holds great promise, despite the potential pitfalls. It still needs to be staffed and to have a strategic plan, clear regulations, and a dedicated funding stream. Activists will have to remain on their toes and put up a fight for all these things: Victory cannot be declared simply because the bill is now law.

Quiñones-Sánchez is particularly excited about a provision of the bill that would allow for long-term strategic neighborhood planning. She says she hopes to see more mixed-use development and affordable housing in her district, and to use the land bank as a means to make it easy for both nonprofits and for-profits to obtain the parcels they need to establish such visions.

“Given [Philadelphia’s] limited resources for housing, how do we plan out what the city can do and how do we engage the private market where they may be able to do a better job?” Quiñones-Sánchez asked in an interview with YES!

“If this gets implemented," she continued, "we foresee the ability over the next couple years to really plan out what different neighborhoods are able to have. We incentivize the private market to go into those areas because we are providing a more predictable development process in terms of zoning and what we want in there.”

A lot of people at the October hearing already had plans for the vacant lots and blighted buildings in their neighborhoods: urban farms, affordable housing, community gardens, and more traditional forms of development (bougie cocktail bars, condos, and the like).

The witnesses at the hearing saw the land bank as the answer to trash-strewn parcels that mar their blocks, and a way for developers, nonprofits, and community groups to purchase the lots they desire quickly and for a reasonable price.

Here’s hoping it works out that way.

• Jake Blumgart wrote this article for YES! Magazine, a national, nonprofit media organization fusing powerful ideas and practical actions. Jake is a freelance reporter and editor based in Philadelphia. Follow him on Twitter at @jblumgart.

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