Urban

In Blight Fight, Philadelphia May Be Biggest City to Create a Land Bank

Land bank programs have become a popular way for cities to acquire abandoned property and do something productive with it.
by | December 2013
Abandoned buildings in Philadelphia's Strawberry Mansion neighborhood.
Abandoned buildings in Philadelphia's Strawberry Mansion neighborhood. AP/Mark Stehle
 

Land banks have become an increasingly popular tool for cities dealing with empty lots and abandoned property. Now the model may be getting even bigger: Philadelphia could soon become the largest city to create a land bank program, as part of its effort to more efficiently acquire unused property and get it into the hands of developers who want to do something productive with it.

Advocates for the plan say it’s crucial for the city, given the steep costs that abandoned property can impose on a community. A 2010 study found that vacant and abandoned property in Philadelphia reduced home values by an average of $8,000, required $20 million in annual upkeep and deprived city coffers of $2 million in annual tax revenue. “There’s a real financial cost to not doing anything,” says Rick Sauer, executive director of the Philadelphia Association of Community Development Corporations, which has long advocated for a land bank.

There are roughly 40,000 vacant parcels in Philadelphia. Of those, about 30,000 are owned privately, and 10,000 are owned by a handful of public agencies, each of which historically has had different policies for disposing of it. Because of that convoluted structure, even when someone wants to pay to develop an abandoned area, it’s not always a smooth process. “If you’re trying to assemble a larger site for development—20 or 30 parcels—you could have a dozen different owners,” Sauer says. “It’s really quite a nightmare.”

Under Philadelphia’s land bank proposal, ownership of the city’s vacant property would be consolidated under one agency in order to make the purchasing process easier for potential buyers. The city might also be able to strategically buy some private land if it could help make a package of publicly owned parcels more marketable. A bill introduced by City Councilwoman Maria Quiñones-Sánchez is being considered, and it has the support of Mayor Michael Nutter’s administration.

Philadelphia’s concept isn’t new, but given the city’s size, it’s likely that other places that have struggled with similar challenges will take notice. Already, there’s been an explosion in land banking in just a few years. The earliest land banks began in Atlanta, Cleveland, Louisville and St. Louis. As recently as 2005 there was just a smattering of communities with land banks, but by 2011 there were nearly 80, according to data compiled by Frank Alexander, a law professor at Emory University who’s an expert on land banking.

John Carpenter, deputy executive director of the Philadelphia Redevelopment Authority, says the creation of a land bank would represent the latest in a slew of improvements the city’s made in recent years to the way it handles vacant property.

New changes to state law allows the city to acquire delinquent property without putting it on the open market to the highest bidder, which could help ensure it’s not acquired by speculators. Though still owned by separate agencies, all the city’s vacant properties are now located in a searchable database, complete with a map and available to the public. Previously, the price of those properties wasn’t available up front, but now it is. Those changes have already made a big difference. “It wasn’t that long ago they didn’t have this in an electronic format and they were working with three-by-five cards,” Sauer says. “It was very challenging.”

But the final step—actually creating the land bank—is the critical one. By bringing the property under one agency with one board of directors, Sauer says, Philadelphia can make more strategic, coordinated plans about what to do with it.

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