By Nolan G. Shenai
Special to the Legal
On the 2000 block of Chestnut Street sits the Philadelphia Housing Authority building – 2012-2014 Chestnut St. to be exact. An old, faded notice is affixed conspicuously to the façade, which is also graced with rotting window frames and broken windows. The city’s Office of Property Assessment records show that the building is owned by the Philadelphia Housing Authority. The symbolism is stark.
City Controller Alan Butkovitz released an analysis of the city’s proposed actual value initiative (AVI) on February 12. His analysis found, inter alia, that the Northern Liberties, Washington Square West, Fitler Square and Graduate Hospital neighborhoods will see significant increases in property tax as a result of AVI. On February 13, Jan Ransom and Sean Walsh of philly.com further reported that a “gentrification bill that would provide relief to longtime residents and a homestead exemption that would lower assessments by $30,000 for homeowners are on the table.” Bad move, Philadelphia.
Though actual numbers are disputed, according to Councilman Bill Green’s website, the AVI proposal “is designed to generate $94 million in additional tax revenue for the school district.” Green’s website further states that AVI “will result in a $200 million to $300 million shift of the city’s real estate tax burden from commercial and industrial property owners to residential ones.” Reducing tax burdens for commercial and industrial property owners is likely good for business. Driving the very people who are contributing substantially to the economic growth of the city to the suburbs, however, is not. It’s not good for the city’s businesses, nor is it good for the city’s housing market.
The city, and businessmen and women in the city, may be having a different conversation if AVI were the last available revenue option for Philadelphia. News flash: It’s not. The AVI proposal, however, is the lazy option. The city currently sits on hundreds of millions of dollars of real estate – in the form of 35,000 city-owned, blighted properties – that it is unable to manage or incapable of rendering habitable. Exhibit A is the PHA’s own 2012-2014 Chestnut St. Instead of creating revenue by selling assets that the city does not appear even to want, Philadelphia is deciding, through the AVI proposal, to put the burden on its residents.
It’s simple, Philadelphia. On the one hand, disposing of city-owned properties creates immediate revenue – far more than the projected $94 million – whereby longtime residents and residents dependent on a homestead exemption can be helped. It creates jobs, attracts businesses and residents alike, and provides for sustained economic growth. On the other hand, the AVI proposal will place an unreasonable burden on city residents, who already have one of the highest tax burdens in the U.S. Fewer people will move into the city and many current residents will move to the suburbs, which over time will significantly and negatively affect businesses and, ultimately, tax revenues.
Philadelphia is trying to use a band-aid to cure the flu, while it holds a bottle of medicine in its other hand. Bad move, Philadelphia.
Comments