INSIDE TAKE: The Land Bank Is a Bad Idea

Photo credit: Julia Rowe via Flickr.

(Editor’s note: This is an opinion column from a Citified insider.) 

Most changes are born of dissatisfaction and animated by a dream: “Things are terrible,” or “Wouldn’t it be nice if …?” Such was the optimistic birth of Philadelphia’s Land Bank.

While exact numbers are embarrassingly elusive, best estimates are that our town has more than 40,000 abandoned properties. More than 20 percent of those are owned by agencies of the city government. Abandoned properties are everything we think they are: drags on property values, crime scenes, fire hazards, homes for vermin, and more. The Sisyphean factor is daunting. Nobody really knows how many properties are abandoned annually. The Department of Licenses and Inspections demolishes 600 abandoned structures annually, and they’re just treading water.

So, having established that “things are terrible,” we can pivot to the “wouldn’t it be nice?” phase.

Like the Land Bank architects, Mayor John Street was a dreamer. His $300 million Neighborhood Transformation Initiative was intended, in part, to acquire abandoned, privately owned properties and market them, much like the Land Bank. I should know. I was deputy managing director of operations for NTI. That plan was all but ditched for lack of adequate funding. Yeah. A $300 million bond issue proved inadequate. The Land Bank’s budget? Just over $4 million this fiscal year.

With quintessential “inside the box” thinking, a redundant agency has been created – overseen by a board of directors, with three different appointing authorities – that duplicates the mission of the city’s property agencies, point for point. Worse, there is no consolidation planned for the remaining, suddenly less important agencies (e.g., the Redevelopment Authority, the Philadelphia Housing Development Corporation, the Department of Public Property).

The central argument for the Land Bank was that each land-owning agency had its own disposition procedures. But what is preventing those agencies from adopting identical, standardized disposition rules?

Another argument was that the inventory needed consolidation, so as to make it easier for developers and community groups to acquire the vacant lots. But hundreds of thousands of dollars and thousands of human hours were committed to creating the digital inventories of those properties, which created a “virtual” land bank. This “bank” is as counterintuitive as Amazon opening a store.

The Land Bank has another role as well. It’s been empowered to acquire vacant, tax-delinquent privately owned structures. There is an unfortunate activist mindset that dictates, when in doubt, express your good intentions by creating a new bureaucracy. There is no practical way the Land Bank, or any agency, can adequately sort, assess, acquire, dispose, or cherry pick from 40,000 properties at a pace to have any effect at all on abandonment levels.

In its best year, the Redevelopment Authority disposed of 200 to 350 properties annually. Many of those were were simply shuffled to other agencies or private owners who did not develop the lots. The impact on the vast inventory of vacant lots was approximately zero. It’s delusional to tell the public and City Council that the new Land Bank can process more than 1,000 properties annually, with fewer employees than the RDA, and get ahead of our stunning abandonment rate.

There are other areas where reverie is replacing reality. Advocates want the financially strapped city to start repairing the 10,000 properties it owns. Payroll is to be expanded to handle paperwork. Expensive parcels ripe for development would be preserved as vegetable lots.

The most glaring and fatal flaw is that, notwithstanding the complicated and time-consuming rearrangement of the deck chairs, Council prerogative will still rule. Despite the best-laid plans of mice and bureaucrats nothing can be disposed of without the express permission of the appropriate district councilperson. This guarantees that development will remain politically driven.

Former Councilman Frank DiCicco’s 10-year tax abatement proved that the right policy can produce 100 times the impact of a clumsy, redundant, costly new agency. This policy innovation jump-started development and neighborhood renewal on a scale never before seen in Philadelphia. What would be the impact of providing a generous tax credit for any demolition that leads to development? One could argue that unmarketable parcels would become marketable. One could also argue that L&I could reduce their demolition budget if the development sector could be incentivized to demolish dangerous properties.

The notion that cities should “think outside the box” has been around a long time. It’s disappointing how rarely Philadelphia’s government does it.