Vacant Land 101
Why does Philadelphia have more than 40,000 vacant properties?1
- From 1970 to 2000, Philadelphia lost 22% of its population.
- As of March 2007, Philadelphia had 640,000 housing units and only 572,789 households to fill them. This creates a surplus of approximately 67,211 vacant units. 2
- In 2000, 92% of owner occupied houses were over 40 years old. Old housing stock can within five years become unsafe or unlivable without continuing maintenance.
- Seniors over 65 consistently own about one-third of Philadelphia houses and many die without wills or heirs interested in taking responsibility for the property.
- Homeowner income in real dollars has dropped while home prices have risen. From 1970 to 2000, median Philadelphia family income in 1999 dollars dropped from $42,517 to $37,036 while median home values during the same period in 1999 dollars rose from $45,514 to $57,759. This has left residents with less money to invest in their housing.
Who owns the more than 40,000 vacant properties?3
- 30,000 are privately owned. The City is unable to identify the owner for many of these properties.
- 10,000 are publicly owned. Each agency has different policies for acquisition and disposition. Several do not have an inventory of these properties or do not share this inventory with the public.
- Philadelphia Redevelopment Authority (RDA) owns 2,800 parcels that were acquired by eminent domain for redevelopment efforts. The RDA has sold approximately 30 of these properties per year through an RFP process or in response to an inquiry by a for-profit or non-profit developer.
- The city of Philadelphia (Department of Public Property) owns 5,700 parcels that were acquired by tax foreclosure and are surplus to the needs of the city. The Department of Public Property has traditionally viewed this land as a revenue generator, selling it for the highest price without any obligation to redevelop the land.
- The Philadelphia Housing Development Corporation (PHDC) owns 700 parcels that were acquired by purchase or donation. The PHDC sells its property for fair market value and makes an effort to ensure that buyers have the intent and resources to redevelop the property.
- The Philadelphia Housing Authority (PHA) also owns approximately 1,100 parcels that are surplus to its operational needs. The PHA needs HUD approval to sell or convey this property to others. PHA has not made its inventory public or agreed to share it with other public vacant land owning agencies.
- $3.6 Billion in Lost Household Wealth. Vacant parcels have a blighting effect on nearby properties, reducing values by 6.5 percent citywide and by up to 20 percent in some neighborhoods. This results in an estimated $3.6 billion reduction in property values, an average of $8,000 for each household in the City.
- Over $20 Million in City Maintenance Costs Each Year. Though the City controls only a fraction of the vacant parcels within the city, it has to bear significant costs to maintain all of them — waste clean-up, pest control, police and fire — totaling over $20 million per year.
- At least $2 Million in Uncollected Property Taxes Each Year. 17,000 vacant parcels are tax delinquent, most by over a decade, owing a total of $70 million to the City and School District in back property taxes. This number increases by at least $2 million a year.
Where are these vacant properties located and what is their market value?
Vacant properties are located in every neighborhood of the City. They are most concentrated in North and West Philadelphia.
The majority of vacant properties are single lots and have very limited value.
What is the City doing to reactivate the 30,000 privately owned properties or make them code-compliant?4
More than 60% of the privately owned vacant parcels are more than 10 years’ tax delinquent according to Revenue Department data. Many of these properties have more taxes owed on them than they are worth eliminating the owner’s ability to sell the property. The city Law Department and Sheriff’s Department have the authority to determine whether to complete foreclosure proceedings on a property. Currently their decision is based upon whether they will be able to sell the property at sheriff’s sale for more than it costs in legal fees and administrative costs to complete the process. The City’s code enforcement capacity to ensure these properties do not pose a nuisance, is also limited. According to former RDA Director Terry Gillen,“the city’s Department of Licenses and Inspections does not have the tools or resources to hold property owners accountable for the maintenance of their properties.”
1 Karen Black, From Liability to Viability, Reclaiming Abandoned Pennsylvania II: A Technical Guide for Action, Housing Alliance of Pennsylvania (2004) http://may8consulting.com/pub_05.html
2 Kevin C. Gillen PhD, Econsult, Empirical Results On The Womens Community Revitalization Corporation Barriers-To-Affordability Study (2008). Ira Goldstein PhD, TRF
3 Econsult Corporation, May 8 Consulting and Penn Institute for Urban Research, Vacant Land Management in Philadelphia: The Costs of the Current System and the Benefits of Reform, Philadelphia Redevelopment Authority and Philadelphia Association of CDC’s (November 2010)http://may8consulting.com/pub_16.html
4 Terry Gillen, The Reform of Vacant Land Policies in Philadelphia, Federal Reserve Bank of Philadelphia Cascade Magazine No. 75 (Fall 2010). http://www.philadelphiafed.org/community-development/publications/cascade/75/03_reform-of-vacant-land-policies-in-philadelphia.cfm