A week ago, I was walking down 16th Street in downtown Denver. I was trying to stave off the minor panic attack I inevitably get at some point during travel outside of Philadelphia. I love going new places, don’t me wrong, but I always freak for a minute when I am somewhere really far away. There's something about ready access to cheesesteaks and people who know how to speak properly (what is this mysterious wah-tear that i am constantly being offered by servers?) that comforts me. Take it away and I feel like like a turtle that's swallowed a six-pack ring.
Anyway, there I am thousands of miles from home in a city located in a time zone that I’d bet ¾ of Philadelphians couldn’t even name. I am returning to my hotel from a pre-meeting trip to Denver’s Union Station (I like to check out trains in other cities) and I am blown away by the amount of new construction, apartments and lofts I see. I had a friend who lived in Denver once, and I’d always pictured it as one of those sprawling Western cities whose downtowns only contained hotels and office buildings. But no: all around me are thousands of units of housing.
This year, I have had a chance to travel a bit and I can confirm that urban living is popular everywhere. San Diego, LA, Portland, Seattle, Denver, Cincinnati, even Albany, NY; they all feature downtowns that are developing. Rapidly. I’d go so far as to say that American society is beginning to indicate a preference for urban living over suburban—a pretty big change for a country that practically invented suburbia.
After all, not as many middle-class people my age are getting married (or partnered for you PC straights) and bearing children in the same numbers as their parents. That means a whole lot of young people can forget the need for a good school district and a yard for the kids in favor of drinks at Tria. Not to mention the crowds of empty-nest baby boomers, who are living healthier and happier than their parents. They seem to figure, “why not live in the city now?” There is a lot more going on in Center City, after all, than in Newtown Square.
Yes, all of these suburbanites moving into the city sucks some. But, on the whole, it’s a great trend. A huge part of our current energy crisis isn’t just about the price of a barrel of oil, but it’s also about the fact that our country fundamentally realigned itself along car-reliant lines in the last century. Most Americans who live outside of cities have to own cars to do anything from work to school to shopping for food. And the fact that cities offer a contrast to that lifestyle, not to mention real opportunities for folks to get stuff done on foot or on SEPTA make them highly appealing.
So what does this all have to do with Philly?
Maybe other people have already caught onto this (especially those who travel more than I), but if there really is a cultural shift toward urban living, Philadelphia should ease up on all the incentives.
The Avenue of Arts was great and all, and maybe the ten-year tax abatement really did spur activity in Center City, but come on. If people are moving to downtown Denver of all places, it is obviously time for Philadelphia to end the ten-year tax abatement, or at least amend it.
There are two alternatives I would propose:
- Offer a ten-year tax abatement to developers who pledge to renovate and rent properties at affordable rates. We have an affordable housing crisis in the city, and I‘d argue that what we need most is more affordable rental units.
- Do something creative—maybe keep the property tax abatement, but charge those who get it a close-to-comparable fee for something like public transportation capital development (to build new light-rail or subway lines—think how great that would be for Fairmount and Strawberry Mansion or even NE Philly), or something to fund the School District.
In Mayor Nutter’s first year as Mayor, he managed to get a budget passed without causing too much pain. But that was really just the calm before the storm. Revenue projections are not great, there’s a recession brewing, and next year and the year after, we’re going to need more money in city coffers (and AFSCME DC 47 still doesn’t have a contract signed).
We need money not just to meet basic needs, but we also need to have some capital on hand to be able to invest in the city’s future. If we want to keep new people coming here, and if we want to have the resources on hand (like a fully-funded CCP) to raise the wages of those who already do, we need money.
And when it’s clear that people want to live here, in Center City at least, easing up on the tax-abatement seems like an easy way to start.
(If the solutions I offer chafe some, no sweat, but remember, in a city where 2/3 of our citizens live in functional poverty, we gotta do something to fund basic city services and figure out a long-term plan to lift people into higher-wage jobs. So, if you don't like my solutions, offer some that address these core issues.)











Wow. For once ray and I
Wow. For once ray and I actually agree about something:
http://phillyville.blogspot.com/2008/06/all-sustainability-all-time.html
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Phillyville
Makes sense to me
You pay your property taxes, we earmark those dollars towards transit and other improvement that will directly improve the real and market value of your property. Only in Philadelphia would people look at that deal skeptically.
We also need honest-to-goodness zoning reform; zoning that focuses on the things that matters to keep our neighborhoods safe, walkable, beautiful, etc. but removes some of the hurdles to development, so that the zba doesn't have to get crazy and unpredictable on every single proposal. People will pay the taxes if they don't have to jump through as many hoops. In fact, in many cases they pay the "taxes" indirectly to people who can fix whatever problems they might have, which is why some eyesore developments go up in a hurry and great neighborhood businesses take forever to get approved.
One caveat: Nutter's proposal in the primaries was to shrink the abatement to five years in Center City and environs and extend it to fifteen in neighborhoods with high hurdles for residential development. I think there may be an argument for some kind of targeted abatement in those neighborhoods.
Yup, I've been saying this
Yup, I've been saying this for a while now that the tax abatements are just plain dumb. It's basically totally screwing the working clas who still are lucky enough to own homes in or near posh new neighborhoods. They shouldn't have them for new builds as much in targeted areas that need more home owners, like, say, North Philly, parts of Germantown, parts of West Philly, etc.
Denver, my friend, is up and coming. For some reason, Denver and Boulder have become a mini tech hub. I do't know what caused it, but I think that it definately helps the area.
Targeted abatements?
Yeah I was a big fan of the targeted abatement plan--after all, an abatement in West Philly would sure benefit me. However, in a lot of the neighborhoods where an abatement might be applied, property taxes are pretty low. So maybe after reassessment, an abatement might actually be an incentive, but right now, I wonder..
I do think the idea of incentivizing development in neighborhoods other than CC is a good idea, but this is part of what the controversy was with the Brewerytown development--if the development is $250 K or $350 k homes (as are going in at 48th and Parrish right now), you are in fact straight up gentrifying. And in some instances that may be a net gain for a neighborhood, but some of the stuff that was done in Parkside to encourage development that contributed to the stock of affordable rental housing is possibly a better model.
That all said, just slapping fees on CC homebuyers for transit or school is in some ways cleaner than neighborhood abatements. It's a simple redistribution of wealth from the hottest neighborhoods to neighborhoods all over the city that could use better schools or an expanded SEPTA. And it's an investment that benefits all of us by raising the wages of our next generation of workers (educated kids make more money) and it allows our current workforce better access to jobs.
But again, there are other ideas, and targeted abatements certainly have some strong suits.
First off me 3 or 4
Second you are right Ray that property taxes are low in areas we would direct property tax abatements to, but they won't stay that way. New assesments also mean regularly updated assesments. So if we say you get an abatement for transit oriented corridors, in areas that could benefit from some investment, and also that the abatement is devised to reward affordable housing or an inclusive mix of affordable and market rate housing - yeah the property taxes are low when its a bunch of abandonned houses and unused factory buildings but as soon as the developer starts selling more affordable - let's say half $125K or under for new construction and half "market rate"- houses that alone brings up the assesments on the land. The assesment doesn't benefit the developer while they are building, it make their final product more desirable to their customers - making their newly developed homes easier to sell. 10 years off property taxes is not a totally insignificant "bonus" for smart, transit-oriented, mixed income development - particularly after its built and has presumable made the area more "desirable".
Its still a pretty good carrot that we probably should be more selective in who we distritbute it too.
-Sean
MrLuigi, my cat, actually only types half as badly as I do.
Another POV on new urban development
Dan Pohlig has a good piece here where he says stuff like:
The biggest selling point
The biggest selling point for a mid-term tax abatement is that it encourages new construction (yes) and renovation of existing properties. Even if it's only anecdotal, when you talk to people (whether homeowners or landlords) about spending money to renovate their properties, the argument most frequently given against it isn't the direct cost but the perception that an improvement will result in an increased tax assessment. People can fix up their houses -- at low loan rates guaranteed by the city -- and they won't see their assessments go up for years (at least because of the renovation itself).
By the way, wouldn't be awesome if members and reps from the building trades went out with city workers to these neighborhoods to advertise themselves, maybe do some pro bono community work, and recruit some guys and girls for apprentice and mentorship programs? The goodwill that could generate would pay itself back fivefold. And then you'd need those new duespayers to handle all your extra work.
Developers love to sell ten-year abatements on new homes and condominiums, and that's led to a boom in city construction. But you also have to think about giving developers incentives to build or renovate rental properties, *especially* affordable rental properties, and commercial properties. (The single-family homes will get sold.) We may want to think about this, too, if you're exploring a targeted abatement in the neighborhoods.