City asks BIA and FixItPhilly to share their priority outcomes for Philadelphia’s vacant property
Vacant Land Subcommittee
The Managing Director’s Office briefed members of the Building Industry Association (BIA) Government Affairs Committee and FixItPhilly Coalition on the city’s proposal for its first comprehensive vacant land policy. In response to a request by Brian Abernathy, Deputy Managing Director, the Vacant Property Subcommittee shared its priority outcomes for a new approach to vacant property. BIA and FixItPhilly have taken on a year-long project to research the city’s current vacant property process and to make detailed recommendations as to how it can be improved. While this research has only just begun, the subcommittee provided 10 outcomes that it believes any new vacant property policy must have.
Vacant land in Philadelphia has long been treated as a liability the City could not afford and didn’t know what to do with. While other cities made concerted efforts to create land banks, acquire properties and aggressively market them to assist the market, Philadelphia’s efforts were far more sporadic and fragmented. Public agencies grew inventories of 10,000 vacant properties over the years, but public ownership neither guaranteed maintenance of the property nor its rapid reentry into the market for real estate development or some other purpose. In fact the process for obtaining properties from the City has been so arduous as to seriously deter investment in the City.
Mayor Nutter’s commitment to creating a city-wide, comprehensive vacant property disposition strategy presents an important opportunity to bring investment to the City by creating a reliable pipeline of land for development and other uses that will help to revitalize its communities. We commend the Mayor and caution that the creation and implementation of this policy will take at least a year and ask the Administration to contribute leadership and high-level staff to continue to lead this effort throughout 2011. In addition, the Administration must work to ensure the Philadelphia Housing Authority, as a major public owner of vacant properties, is included within this effort.
To be effective, this policy must allow the 10,000 vacant properties currently in City possession to rapidly be sold or transferred to responsible owners or held for assembly opportunities. An important goal will be the transfer of 1,000 properties annually for the next ten years.
It is the opinion of the Building Industry Association Government Affairs Committee and the FixItPhilly Coalition that a comprehensive City vacant land policy must:
- Have a uniform set of objective, transparent rules to acquire publicly-owned property. For the past few decades, the process has been both changeable and complex and very few non-profit or for-profit developers were able to understand or trust the process.
- Establish the City’s goal for vacant property disposition as revitalizing communities and attracting investment rather than gaining income for the City through sales.
- Create a single, accurate inventory of its vacant properties that is updated quarterly. The inventory should be made readily available to the public via the Internet. The inventory may at first only include public properties owned by PHA, RDA, PHDC and Public Property, but over time this database should be expanded to include privately owned vacant properties and to provide parcel information including whether the site is suitable for new construction or is a non-buildable lot.
- Provide clear, marketable title for every parcel public agencies transfer. In the past, the City has sold properties with outstanding liens and offered properties through RFP that were the subject of litigation. The City, RDA and PHA must take whatever actions are needed to clear all outstanding liens from the properties they sell and ensure the buyer owns the property free and clear.
- Mandate that the disposition process be completed and property settled within a clear predictable timeframe. Currently it can take more than a year to complete a sale of a vacant property. The City must set clear timeframes for the transfer of vacant properties through a predictable process.
- Dispose of properties for fair market value (FMV) without additional restrictions other than those imposed by zoning & permitting approval processes. The BIA sees the condition-free transfer of market value properties as key to the goal of transferring up to a thousand properties each year to responsible owners. Other members of the Coalition believe strongly that the City should impose restrictions on properties sold at FMV that, while not imposing restrictions on use beyond zoning and permitting standards, nonetheless ensure the buyer uses the site in a responsible way and does so in a timely fashion to ensure positive community benefit. The Coalition will work to resolve this difference in position.
- Determine Fair market value (FMV) for a property at the start of the process, rather than at time of settlement. It is beneficial to the City if the buyer’s interest in a property raises its value and the value of surrounding properties, but the buyer should not be asked to raise their price because their investment has shifted the market.
- Provide a single point of entry for property information and acquisition. A single department or agency should have the responsibility for property transfers and be accountable for the timely implementation of city policies. This entity should have the authority to track the status of transfers and to intervene where delays or conflicts occur.
- Develop a strategy for when the City should hold onto properties and when it should aggressively market them. The City should define policies for when and for how long the city should hold onto a property whether for a specific entity, for assembly opportunities or because there is no market for the land. The City and other major public land owners should also reevaluate all existing holds on properties and determine whether the hold should be removed.
- Establish criteria for prioritizing acquisition of privately owned vacant land that is requested in writing by a potential buyer. Acquisition for assembly of large developable lots to support major investment should remain a priority.
Finally, the Building Industry Association and the FixItPhilly Coalition ask for the City’s cooperation as they begin their own vacant property research project. Similar to the organization’s efforts in researching and implementing “If We Fix It, They Will Come”, a detailed and objective look at the need for development review and zoning reform, this effort will result in recommendations to create and activate a viable acquisition and disposition program to reclaim vacant properties. The effort will identify numerous short-term low cost actions that will improve the city’s ability to reuse abandoned land as well as longer-term recommendations that will lead to systemic change. We believe this project will assist the City and will form the basis for a sustainable public private partnership to reform and reclaim the City’s vacant land. We request that City employees with detailed knowledge of the existing process sit down with us and share information so that we can make informed recommendations that will be helpful to the Administration.
Members of the BIA Government Affairs/FixItPhilly Vacant Property Subcommittee are:
Kevin Baird, KRB Properties
Barbara Capozzi, Capozzi Real Estate / Insurance, Ltd.
Tom Chapman, Blank Rome
Nino Cutrufello, Callahan Ward
Anne Fadullon, Dale Corporation
Elizabeth Hersh, Housing Alliance
Matt Koenig, JKR Partners LLC
Paul Lonie, Aqua Economics
Robert Rosenthal, K Hovnanian Homes, Chair Government Affairs Committee
Rick Sauer, Philadelphia Association of CDC’s
Darin J. Steinberg, Esquire
Marilyn Wood, 10,000 Friends of Pennsylvania