There is a simple argument for why Philadelphia needs to develop the 43,000 pieces of derelict property scattered across the city. Her name is Deanna Salley.
Despite a full-time, well-paying job, Salley recently found that she and her husband could no longer afford rents in the North Philadelphia neighborhood that had been home for decades. The couple couldn’t compete with Temple University students who could split the cost of an apartment four ways and prospects for the future looked even dimmer as more new buildings targeting the same young renters rose on the formerly empty lots that Salley had endured for years.
It’s a classic story familiar in resurgent urban neighborhoods nationwide yet it’s ending hasn’t been determined for Philadelphia. Last month, Salley’s situation and dozens like it were shared as representatives of the Philadelphia Coalition for Affordable Communities testified one after another at a public hearing for a nascent city land bank that they believe is central to keeping rebounding neighborhoods affordable to longtime residents, even as more affluent newcomers move in.
Philadelphia became the largest U.S. city with a land bank in 2013 when the City Council, after intense negotiations, unanimously approved the redevelopment tool. The Philadelphia Land Bank opened for business in 2015 with a clear mandate: to quicken the pace of returning vacant and tax delinquent property to productive use by centralizing ownership of these parcels and streamlining the redevelopment process.
Despite a high-profile start, the Land Bank’s first few years have passed without much notice outside of city hall’s chambers. Accomplishments have been of the behind-the-scenes variety — Land Bank officials tout clearing some 6,000 titles for transfer and acquiring roughly 2,000 properties from other public agencies as big wins. In the first two quarters of 2016, the first where the Land Bank disposed of property and the latest for which figures have been publicly released on its website, the agency sold a total of 127 parcels of land. So far in 2017, nine properties have sold, officials say.
The slow pace of progress is hardly surprising. For generations, Philadelphia leaders have struggled to bring new investment into the neighborhoods outside of Center City where vacant property is concentrated. When the market is there, the struggle becomes how to weigh competing interests in communities where the needs are great, sometimes at odds with one another and all in need of support from strained public coffers.
The Land Bank’s new strategic plan — unveiled last month and expected to be on the City Council’s agenda this week — is an attempt at balance. The document is sprinkled with colorful maps and attractive graphics showing the potential transformation of vacant or underused lots into housing of all kinds, mixed-use development, community gardens and side yards. It sets a target of returning nearly 2,000 properties to productive use over the next five years, with more than 1,200 of those expected to become homes, 650 of which are intended to be affordable for low-income Philadelphians.
The plan doubles the amount of land to be redeveloped as housing for people making 30 percent of the Philadelphia area median income. The affordable units will be designated for households earning less than $20,000 per year, or 30 percent of the Philadelphia area median income of $56,000.
Celebrated as a win by the PCAC advocates who showed up at the January meeting, the change was made in response to feedback from residents across the city, says Tania Nikolic, the interim director of the Land Bank. “We heard from the public about the need for affordable, accessible housing and we listened,” said Nikolic in a public statement.
Other changes include the addition of a new policy allowing groups to obtain five-year leases on land in the bank’s inventory. That change too was made in response to feedback from Philadelphians, says Land Bank spokesperson Paul Chrystie.
“Community engagement around the strategic plan has been ongoing; it’s not that we simply held a public hearing — there was an ongoing back-and-forth over months about aspects of the plan,” he said.
That back and forth will continue in the coming weeks as the council weighs in on the new plan.
Kevin Gillen is a senior research fellow at the Lindy Institute for Urban Innovation at Drexel University and a consultant who has worked with the Land Bank in the past. He has long argued that the new agency must be tactical in how it dispatches the thousands of properties that it will ultimately have the responsibility of selling. Only a small fraction of Philadelphia’s vacant parcels — 10 to 15 percent — are desirable to for-profit real estate developers, he says. The other 85 percent are small lots scattered across neighborhoods outside of the city’s dense core. “Even if you gave away the land for free, a builder couldn’t sell a home that covered the cost of development,” Gillen says, speaking in his capacity as a private citizen. “Those lots work best as small community gardens, side yards or open space until the neighborhood recovers.”
The high-value lots, on the other hand, should be used for “high density, multifamily mixed-used projects,” Gillen says. “To use the land bank to promote affordable housing is to bring the wrong tool to the wrong job.”
Data supports Gillen’s idea. A study produced for the Land Bank by Econsult Solutions and Susan Wachter from the University of Pennsylvania Institute for Urban Research found that the agency could generate more revenue by selling the high-value lots to developers for market-rate housing than could be generated through the sheriff sales wherein tax-delinquent property is typically sold. Not only do properties fetch better prices through the Land Bank, but the agency’s requirement that they be developed in some form within a year of sale produces both more revenue and significant cost savings for the city. This cash could then go back to the city to fund public services and the Housing Trust Fund, a public-private partnership that assists homeowners, landlords and developers who want to build or maintain affordable properties.
“I’m all for what the advocates want,” he says. “But the best place to find this [affordable] housing is to renovate and retrofit existing housing. This would be the most cost-effective way to provide affordable and workforce housing at market rates in the city.”
But for many of the housing advocates who testified at the Land Bank’s hearing last month, the question isn’t just how many affordable units, it also about their location. Especially in a city like Philadelphia where redlining and other exclusionary practices fostered the abandonment now being addressed.
“In 2012, in neighborhoods where [house] values increased in South and West Philadelphia, there were 29 percent fewer African-American residents,” says Nora Lictash, executive director of the Women’s Community Revitalization Project and a PCAC steering committee member. “That’s not acceptable. In the city, we can have good policies that soften those effects. We can make things fairer.”
This dilemma of how to best leverage vacant land is one that land banks in urban and rural areas nationwide find themselves confronting, says Kim Graziani of the Center for Community Progress, a think tank that advises cities on reclaiming vacant properties.
“There are three to five key themes when we work with the most effective land banks around the country,” she says. “One is that the land bank is nimble and responsive to local problems as well as local land use goals.”
Another practice recommended by Graziani is aligning internal strategies with community partners and their strategies.
One item on the docket for Lictash and her colleagues at PCAC is the creation of a housing impact fee that would be levied on developers building market-rate projects. Modeled after policies in cities such as Oakland, California and Boston, the revenue generated by the fee would go into the city’s housing trust fund.
While the City Council hasn’t taken an official position on housing impact fees, individual members are likely to mention affordability issues as discussion of the bank’s strategy moves forward. At its first meeting of the year, also held last month, the body passed a bill introduced by Council President Darrell Clarke calling for, among other things, a moratorium on sheriff sales until Council can conduct a review of the city’s land disposition policies.
“What happens in a lot of these areas is that people buy these properties [at sheriff sales] and they sit on them. They’re speculators,” he says. “What we want to do is acquire the properties per the Land Bank strategic plan and put them back on the tax rolls and provide housing, be it workforce, be it affordable, or be it market-rate.”
Supporting Clarke in the effort to ensure that the Land Bank isn’t losing out to the old system of sheriff sales is Councilwoman Maria Quiñones-Sánchez. The councilwoman, who represents a swath of North Philadelphia that has one of the city’s highest concentration of empty lots, introduced the legislation that created the Land Bank and remains committed to its vision of streamlined redevelopment.
“Whenever the bureaucracy stands in the way of community economic development, that’s not good,” she says.
This article is part of Next City’s Philly in Flux series made possible with the support of the William Penn Foundation.
Next City contributor Sandy Smith is the home and real estate editor at Philadelphia magazine. Over the years, his work has appeared in Hidden City Philadelphia, the Philadelphia Inquirer and other local and regional publications. His interest in cities stretches back to his youth in Kansas City, and his career in journalism and media relations extends back that far as well.