Next week, City Council will begin public hearings on an ordinance that would charge a new agency with the Sisyphean task of managing Philadelphia’s 40,000 vacant properties.
Popularly known as a land bank, the agency would serve as a single owner for 10,000 government-owned properties that currently are controlled by an alphabet soup of bureaucracies.
The ordinance appears to have a good chance at passage — but critics say there are still big question marks about implementation. While land banks are popular in smaller cities plagued by abandonment, like Cleveland and Youngstown, Ohio, Philadelphia would be the largest city by far to adopt such a system.
Advocates, like the Philadelphia Association of Community Development Corporations (PACDC), say the new agency would streamline the city’s process of disposing of vacant land — the current system is wildly inconsistent and properties often sit in limbo for years — and benefit both nonprofit constituents and private developers.
“If you look at the other citywide organizations that are part of the larger Philadelphia Land Bank Alliance, they’re representing for-profit builders, realtors, community-garden groups, small-business organizations [and] environmental groups,” says Rick Sauer, director of PACDC, referring to the coalition that has organized to push for a land bank. “There really is a broad range of interest groups around the table.”
But the land-bank system is not without its skeptics. Most criticism has focused on the potential of councilmanic prerogative — the unwritten agreement that Council members have final say over land use in their districts — to warp the dispensation process.
“If I were a district Councilperson, the marriage of ‘land bank’ and ‘prerogative’ would make my mouth water,” says Zack Stalberg, director of government-reform group The Committee of Seventy. The land bank could also use its powers to acquire and clear the title of tax-delinquent, privately owned land that is slated for public auction. It would ultimately assemble both public and private lots into larger parcels for development purposes.
Even the agency that has been anointed to receive land-banking powers, authorized by Harrisburg earlier in the year, does not have a sterling track record when it comes to corrupting influences. The Philadelphia Housing and Development Corporation has, in the past, been the target of multiple corruption investigations and has seen a string of officials resign or plead guilty to fraud charges.
The squeaky-clean Michael Koonce was installed as director last year in what was widely viewed as a move to strengthen the organization’s image in the run-up to the land-bank legislation.
Sauer says the possibility of Council members trying to use the land bank to hold up lucrative development deals for political gain wouldn’t be much different than what can already happen under the current system, adding that the land bank’s public meetings would at least bring a level of transparency to the process of pols intervening in property transfers.
John Kromer, a University of Pennsylvania political science professor who ran the city’s Office of Housing and Community Development for nearly a decade, agrees, but says there are other, much bigger structural problems that could threaten the utility of the proposed new agency.
“The most marketable properties that had been held in public-sector inventories are likely to have been sold years ago; and the size, condition and location of most of the remaining properties are likely to make them poor prospects for sale, at least in the short term,” says Kromer, echoing points that been raised by other local economists.
But, he adds that both advocates and critics have ignored an issue that is key to effectively managing the city’s vacant land: maintenance. “The amount of revenue that property-tax-collection proceeds could generate, at least initially, would not be nearly enough to support a significant property-maintenance capability,” said Kromer in an email. Recently, the Philadelphia Redevelopment Authority, a government agency whose holdings would make up a sizable chunk of the public land in the bank, has resorted to selling off its more valuable lots to patch holes in revenue caused by the sequester, Sauer acknowledges. If the new land bank ends up inheriting lots of worthless land, where would the money for main-tenance come from?
“We’ve been very clear throughout that a minimum threshold for adequate maintenance is critical, as is providing the funding for that maintenance,” says Sauer. “My understanding is there is [maintenance funding]. But that’s subject to the whole budget process.”
Kromer, like many who have raised concerns about the new legislation, says he still wants the land-bank bill to be approved. His fear is that, without a business plan and appropriate funding, it might end up looking uncomfortably similar to the dysfunctional system it’s seeking to replace.
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