PlanPhilly

Inquirer / PlanPhilly tax delinquency chat with Patrick Kerkstra and Kevin Gillen

    • 1222 and 1224 W. Harold Street, Philadelphia March 6, 2013. (David Swanson / Inquirer Staff Photographer)
      1222 and 1224 W. Harold Street, Philadelphia March 6, 2013. (David Swanson / Inquirer Staff Photographer)

This is the transcript from the live chat session with journalist Patrick Kerkstra and University of Pennsylvania urban economist, Kevin Gillen at noon on Wednesday. The subject was “Ravaged By Neglect, The Delinquency Crisis,” on the city’s failure to deal with delinquent properties and their toll on neighborhoods. Gillen did the analysis at the core of the yearlong Inquirer/PlanPhilly project.

 
 
Comment From Jack Zoltowski
Great analysis and reporting. My only wish was that you published closer to election day. I would like the public to think about your series before casting their ballots. Unfortunately, I believe the public suffers from memory loss as election day nears.
 
 
Patrick Kerkstra: 
Thanks Zack. We didn't time this series, but it does seem given the transition to AVI that delinquency is particularly relevant question now.
 
 
Patrick Kerkstra: 
Everyone, joining me today is Kevin Gillen, PhD, the economist who performed the economic analysis evaluating the impact of delinquency on property values. He's the leading authority on property values in the region, and he's here to take your questions as well.
 
 
Kevin Gillen: 
Thanks, Patrick. Great to be here!
 
 
 
Comment From EJW
I'd just like to hear your thoughts on the impact of AVI on delinquency in general (i.e., I assume the high valuations will lead to more delinquency; will extremely low land valuations have an impact on delinquency, etc.).
 
 
Patrick Kerkstra: 
Kevin - One question I've heard from readers about your analysis is whether it's confusing correlation with causation. In other words, does delinquency really depress property values? Or is simply associated with property values already in decline? How did you analysis account for that?
 
 
Kevin Gillen: 
Great question, EJW. The delinquency rate is a critical factor in determining what our eventual new property tax rate will be under AVI. Since our delinquency rate is currently so high, that means that other taxpayers have to make up the difference in order to hit our revenue targets. Not only is this unfair, but it also means our average tax burden is higher than it would be otherwise--which is a drag on our economy and image.
 
 
 
Comment From Guest
I asked this question in the "comments" seciton below...how do you think Council will respond if the Mayor requests additonal funding for the Revenue Department? Will this even help the situation?
 
 
Patrick Kerkstra: 
Guest: It remains to be seen how Council will react to the mayor's request for more funding for the revenue department,. Council President Clarke told me yesterday that he wouldn't support more funding for the department without an increase in anticipated delinquent collections. He wants to see Return on Investment, as he put it. That said, council is anxious to see this situation improve, and more money could certainly help. It all depends on how well that money is spent, of course.
 
 
 
Comment From Stefanie Seldin
If you could prioritize how the City would collect from delinquents, where would you start? Investors? Those with tax abatements? With L& I violations? Who should be at the top of the list?
 
 
Kevin Gillen: 
Patrick, in general delinquency is initially more of a symptom than a disease. Neighborhoods that fall into disfavor see their values go down, which leads owners to disinvest and under-maintain their properties. But, this in turn spurs more delinquencies as owners don't want to throw "good money after bad" in maintaining their homes. So, delinquencies then start to become part of the disease. In short, delinquencies may not be the initial cause of a neighborhood's decline, but the data is very clear that they can accelerate and amplify the decline.
 
 
Patrick Kerkstra: 
Stefanie: Great question. It depends on what your goal is. If the aim is short term collections, then the city's current approach - targeting property owners most likely to pay - makes sense. If your goal is longer term community revitalization and improvement, then you should be targeting those delinquent properties that create the most problems for their neighbors. If the aim is to limit foreclosures on property owners, then you could pursue the very large number of investors who own delinquent property. It's worth remembering that most other cities take an all of the above approach, and go after all property owners who are in arrears, usually within two years.
 
 
 
Comment From Ted
Thank you Mr Gillen and Mr Kerstra for your great article. What is the city doin now to reinvest/redevelop in these underdeveloped areas?
 

 
Kevin Gillen: 
Bakers Dozen: I don't know that OPA will be releasing the specifics of their methodology in how they set the AVI assessments. I can tell you that its a combination of statistical modeling using recent sales and the personal judgment of the appraisers that work at OPA. Two major challenges to doing assessments in Philadelphia are that 1) the real estate in this city is very old, and appraisers don't have access to the original building plans describing the number of beds and baths in the interior, so they often have to guess. And 2) Uniformity of assessments is every bit as much of an objective as their Accuracy. It's important that assessments not vary wildly from property to property or block to block, even though sales prices often do. This forces OPA to often make a trade-off between accuracy and uniformity. Their are neighborhoods in Philly where you can get one, but only at the expense of the other.
 
 
Patrick Kerkstra: 
Ted: as anyone in city government will tell you, resources are very limited right now. The city doesn't have the ability to make massive new investments in redevelopment (like, say, Mayor Street did - with mixed results - in the Neighborhood Transformation Initiative). So the Nutter administration is pursuing strategies that try to give communities the tools they need to improve their own neighborhoods. PhillyRising is perhaps the best example of this. It's low cost, and has had some success. Rolling it out on a citywide basis might help.

 
 
Comment From Michael T. Welsh
Great journalism Patrick. Under whose administration did this problem start to really spiral out of control? Do we know? What administration had the lowest collection rate?
 
 
Patrick Kerkstra: 
Michael: we tracked property tax collections back to 1980. The fact is, collections in Philadelphia have always been low, relative to other cities. But the recent trend line is really bad. Collections faltered further in the Street administration, and have hit record lows in the Nutter administration. The three single worse one-year collection rates since 1980 have all been under Mayor Nutter.
 

 
 
Comment From Kevin K.
What is the main issue interfering with the efficient enforcement of delinquency rules: poor rules? poorly motivated or ineffective employees? lack of technological or other resources? or something else?
 
 
Kevin Gillen: 
Kevin K., Philadelphia is unusual among U.S. cities in that it relies very little on property taxes as a major source of revenue. For most cities, property taxes are their primary source of revenue. Here, it's only ~15% of total revenue, compared to wage and business taxes, which are ~50% of total revenues. So, historically, the city has simply not been as motivated to enforce property tax collection (or accurate assessments!) as it have been to enforce collection of other taxes.
 
 
 
Comment From BakersDozen
Will the city be releasing their methodology for the AVI assessment? I'm personally happy with mine ($50K less than what it was appraised for just 4 months ago) but it does make one question the fairness & validity across the city as a whole.
 
 
Kevin Gillen: 
Bakers Dozen: I don't know that OPA will be releasing the specifics of their methodology in how they set the AVI assessments. I can tell you that its a combination of statistical modeling using recent sales and the personal judgment of the appraisers that work at OPA. Two major challenges to doing assessments in Philadelphia are that 1) the real estate in this city is very old, and appraisers don't have access to the original building plans describing the number of beds and baths in the interior, so they often have to guess. And 2) Uniformity of assessments is every bit as much of an objective as their Accuracy. It's important that assessments not vary wildly from property to property or block to block, even though sales prices often do. This forces OPA to often make a trade-off between accuracy and uniformity. Their are neighborhoods in Philly where you can get one, but only at the expense of the other.
 
 
 
Comment From EJW
Regarding the Mayor's request for additional funding for the Dept of Revenue, are you able to comment on how well the city is using it's $17m budget for the department to recoup delinquent payments? In other words, how does Philly's Dept of Revenue (and it's budget) compare to other large cities that are competent enough / able to collect delinquent taxes?
 
 
 
Comment From AP
How can we get PA State officials engaged in this battle??
 
 
Patrick Kerkstra: 
EJW - It's a good question. Our reporting didn't extend that far. I don't know how well resources Philadelphia's revenue department is compared to those in other cities.
 
 
Patrick Kerkstra: 
Kevin - Another question that frequently comes up is "how much are these delinquent properties actually worth?" Can you address that?
 
 
 
Comment From Your Name
There are many business properties in this city with delinquent taxes, collect from them first and then go after the paying tax payer.
 
 
Kevin Gillen: 
AP, one major obstacle to better property tax policy in PA is the state's so-called "uniformity clause". It requires that the same property tax rate be applied uniformly to all classes of property. So, for example, we can't levy a different tax rate on commercial properties than on residential properties. Because of this clause, AVI will actually force a shift of the tax burden from businesses on to residents. Many homeowners don't much care for that.
 
 
Kevin Gillen: 
AP, one major obstacle to better property tax policy in PA is the state's so-called "uniformity clause". It requires that the same property tax rate be applied uniformly to all classes of property. So, for example, we can't levy a different tax rate on commercial properties than on residential properties. Because of this clause, AVI will actually force a shift of the tax burden from businesses on to residents. Many homeowners don't much care for that.
 
 
Patrick Kerkstra: 
Your Name: that would be one approach. But why should a well to do homeowner with the means to pay be subjected to less enforcement than a business owner?
 
 
 
Comment From Ted
Will any of the city officals mentioned in these articles be with us on this chat?
 
 
Patrick Kerkstra: 
Ted - We did not think to invite any. I'd be delighted to reach out and see if any would join us for a future chat.
 
 
 
Comment From Ted
Let me know. I would be interested in a sit dow or chat
 
 
Patrick Kerkstra: 
I would as well. I was not granted an on the record interview with any city official for this series of stories. All city comment was provided in writing.
 
 
 
Comment From Five
Patrick K, I'm not suggesting not too go after the well to do but, that's where the bulk of the money is.
 
 
 
Comment From Guest
That would be great, Patrick. I contacted Darrell Clarke's office several weeks ago about AVI and have yet to receive any response.
 
 
 
Comment From AP
Would it be possible and legal to deposit our property tax payments into a 3rd party escrow account??? the funds would only then be release to the City once they provide clear evidence of where the funding is spent.
 
 
Kevin Gillen: 
Patrick, your typical delinquent property is worth in the $40-60k range. By contrast, the median house price in Philly is ~120k, and the typical delinquent tax bill is in the low $000s. So, these homes are typically worth less than the average Philly home, but they're certainly worth much more than their typical tax bill. That was one of the series's major findings: these homes are not worthless, so the city can generate revenue by pursuing more aggressive enforcement of delinquent taxes.
 

 
Patrick Kerkstra: 
AP - Somehow I doubt that the city would go along with that arrangement. You'd be delinquent then too...
 
 
 
Comment From mike987
Not to dwell on AVI aspect of this, but there seems to be some confusion over uniformity clause and uniformity of assessments in a block (not varying wildly from block to block). Why should unformity from block to block matter, or provide basis for appeal, if a dwelling's assessed value is supported by data. Maybe it's the nicest (or worst) house on the block and should be assessed higher (lower) than all the others.
 
 
Patrick Kerkstra: 
I know there are a lot of questions about AVI out there, and the city surely has some work to do to get the assessments where they should be. But I don't think there's much question that AVI represents a major improvement over the old assessments.
 
 
Patrick Kerkstra: 
Other questions?
 
 
 
Comment From Michael T. Welsh
Why only access in writing from the Nutter Administration Patrick? Where is the rest of the media in this town on this important story? The Nutter Administration has an obligation to the public to answer these questions. It should not be their option. The rest of the Philly media needs to take off the gloves with this arrogant administration. This is a record of failure.
 
 
Kevin Gillen: 
Mike987, your point is taken, but the city's hands are rather tied on this issue. Both industry guidelines and State law mandate that uniformity of assessments is as much a goal as accuracy. Plus, lack of uniformity opens the door to a flood of appeals, which costs the city both time and money to deal with.
 
 
Patrick Kerkstra: 
Michael: The Nutter administration did answer most of the questions I asked, they just chose to do so in writing. I think the issue of property tax delinquency has been pretty thoroughly covered, not just by me, but by lots of reporters in this town.
 
 
 
Comment From Ted
Your email?
 
 
 
Comment From BL
Can you shed some light on why exactly it is so hard for the city to take over a property and sell it if it has been abandoned and deliquent on taxes? There are stories of homes owned by individuals that are clearly deceased. It seems like any other non-government business could do this in a timely manner.
 
 
Patrick Kerkstra: 
 
 
 
Comment From BakersDozen
Do you know if a property's delinquent status played any part in its AVI assessment value? The one house on my block that was a former meth lab and is currently going through a forfeiture program (and is by far the least visually appealing & worst maintained one on the block) was assessed $5K higher than any other house on the block. That happens to be roughly the amount they are delinquent. Not that the rest of us are complaining but it got us wondering if that was merely coincidence or somehow by design?
 
 
Kevin Gillen: 
BakersDozen, I doubt that delinquency status was taken into account by OPA in setting assessments. In fact, that may even be unlawful.
 
 
Patrick Kerkstra: 
BL - There's a reluctance on the part of the city to expose for sheriff sale low value properties, for fear that nobody will buy them and the land will eventually end up in the city's already large inventory of vacant land. While Kevin is correct that these properties do have real value, it may be that a sheriff sale is not the best way to dispose of many of these lower value properties. A land bank could be an answer.
 
 
 
Comment From EJW
Regarding collection strategies for delinquent properties. I hear people suggesting we go after investors, businesses, etc. first. Why not have a more consistent approach to collection? I guess my concern is that once deadbeats find out that the city is only going after businesses or investors, they'll have no incentive to pay up.
 
 
Patrick Kerkstra: 
EJW - That's a good point. But the fact is, most of the problem IS attributable to non-owner occupants. 60 percent of all delinquencies and close to 70 percent of all back taxes, penalties and interest is owed by non owner occupants. This is a big problem, and you have to start somewhere. Not to mention that, politically, it is easier to target investor owned property than owner occupied property.
 
 
 
Comment From Guest
Kudos to you for an excellent series.
 
 
Patrick Kerkstra: 
Thanks
 
 
 
Comment From Monty Wilson
Patrick: Your series metioned that only 21% of tax delinquincies are owner-occupied residences - homeowners. Is it really cost effective to foreclosure on homeowners? Kevin or Patrick: do you have any data on the cost of foreclosures? in particular the costs when a homeowner is evicted? Also what is the current City policy on tax delinquent homeowners? What do you both think it should be?
 
 
 
Comment From BL
Also, I know sort of off-topic, but i live in an area with a higher number of rentals. Seeing all sorts of out of state license plates got me wondering about wage taxes. Assuming that they keep the out of state address and work in/out of the city, it seems like they are paying less city wage for the same services the registered residents do. Has the city ever considered enforcing this? Seems like a loop hole that a cash strapped city should at least be exploring.
 
 
Kevin Gillen: 
BL, having a non-Philly address and/or residence doesn't help you avoid the wage tax. It's levied on commuters as well as residents via witholding if your employer is based in the city.
 
 
Patrick Kerkstra: 
Monty - I'm not familiar with any data that explores the cost of foreclosing on owner occupied tax delinquent property. But there's obviously the potential for a lot of extra public spending on social services if low income owner occupants lose their homes. Homelessness is expensive for society, after all. And even if homelessness is avoided, there could well be other problems that crop up for people who have lost their homes that would require public intervention.
 
 
Patrick Kerkstra: 
As for the current city policy on delinquent homeowners, it's rather scatter shot (as Monty knows, given that he represents low income delinquent homeowners). Some owner occupants have easy access to income based payment plans, others do not. It depends on who is doing the bill collecting; a private agency, or the city directly. City Council is considering a bill that would bring uniformity to that process. And while the administration is opposed to parts of that bill, it supports the elements that would codify payment plans based on income.
 
 
 
Comment From Ted
How does this delima correspond with the land bill signed by the gov'er this past Oct?
 
 
Kevin Gillen: 
Monty, I'd also point out that not enforcing payment of a mortgage or tax also has its costs. If people don't pay their mortgages, it means higher interest rates, more stringent qualifications for borrowers and less available credit for the rest of us. And, Patrick's article certainly did an exhaustive job of pointing out that non-enforcement of property tax payment leads to less revenue for public services like schools, police and social services, and a loss of home equity to nearby homeowners due to depressed property values.
 
 
Patrick Kerkstra: 
Ted - The state land bank bill gives the city broad authority to create a land bank that would be empowered to seize tax delinquent property before it goes to sheriff sale. This is being actively pursued by the Nutter administration and Councilwoman Sanchez.
 
 
 
Comment From AP
Patrick: Can you shed some light on the number of PHA, RDA, PIDC and other "government owned" properties that do NOT pay any property taxes??? How much revenue is lost from these types of properties? PHA alone has over 15,000 units that contribute nothing to the tax base & bring down property values.
 
 
Patrick Kerkstra: 
City agencies own about 9000 vacant properties. PHA owns more - though I'm not sure offhand exactly how many - 15,000 sounds high. Obviously these properties are not generating tax revenue, and the administration has struggled to sell or give away properties out of its inventory of 9000. There are a lot of changes happening behind the scenes that might improve matters in the future. We shall see.
 
 
 
Comment From AP
Has anyone else heard about a bill to be introduced into PA State Senate that would ban any property tax increases unless the collection rate was over 95%??? We have had 3 "temporary" taxes increases over the past 3 5 years that will now become permanent through AVI so this law should be passed immediately.
 
 
Kevin Gillen: 
AP: I can tell you that the city is actively working to liquidate its inventory of vacant properties through the RDA. Although many of these properties may have little potential for tax revenue generation (due to the fact that they have little development potential), they do depress nearby property values. Getting them cleaned up and converted to sideyards, community gardens or maintained greenspace would be a great improvement to the neighborhoods they are located in.
 
 
Patrick Kerkstra: 
I am not familiar with any such legislation. Rep. Ross has been working for some time on a statewide delinquency overhaul bill, but to my knowledge it does not include the provision you mention.
 
 
 
Comment From BL
The city wage tax is different for working in the city, and living and working in the city, correct? What about those who live in CC, but work in NJ. Keeping out of city address and working outside of the city = no wage taxes.
 
 
Patrick Kerkstra: 
Steve - This is a real concern. Former Managing Director Phil Goldsmith raised the same issue when I spoke with him yesterday.
 
 
 
Comment From Steve
How does the city have any chance of getting more money from the state when this lack of enforcement is going on? They can't have any credibility with legislators in other parts of the state after this.
 
 
Patrick Kerkstra: 
Sorry Steve, posted the answer before posting your question.
 
 
Kevin Gillen: 
BL, the commuter v. resident wage tax rates are different, but not by much. As for those who commit fraud by reporting a non-city address, it's not a topic I know much about. Of much greater relevance to this discussion is that so many delinquent owners are non-city residents. The city is actually lobbying Harrisburg for legislation that would allow Philly to put liens on non-Philadelphia properties if that owner is delinquent on a Philadelphia property.
 
 
 
Comment From Lauren
Kevin, in terms of your idea for a community garden. I've written to the RDA about a large plot of land that would be perfect for the community to turn into something beautiful. The RDA said its not for sale and will not be turned into a garden. Is there any other person one can talk to in hopes turning a abandoned lot into something useful??
 
 
Kevin Gillen: 
Lauren, can you tell me where (generally) this plot is located and if its city-owned?
 
 
Patrick Kerkstra: 
More questions please!
 
 
 
Comment From Jones
Is it realistic to say the city is owed $500M (or whatever) as if that money can really be recovered? After all many of the owners are dead or no longer in existence
 
 
Kevin Gillen: 
Steve, that's an important point because it also goes to how our revenue is structured. I mentioned previously that property taxes are usually the primary source of revenue for most cities, but not for Philly. What I didn't mention is that State aid is usually the #2 source of revenue for most cities, but not so for Philly. If we could improve on our collectionr rates and disposition of vacant land, we might have more credibility in Harrisburg when we ask for our fair share of State aid.
 
 
 
Comment From Johnny
Isn't the property on 18th and Delancy the poster-property for awful city enforcement? Very valuable land, delinquent taxes, and code violations. Renovations have been blocking the sidewalk there for months. If the city can't collect on that property, where can they collect? Pathetic.
 
 
Patrick Kerkstra: 
Jones - Great question. The answer is probably no - not all of that $500 million can be collected. It COULD have been collected, had the city had a better collection rate in the past. But it probably can't all be collected now. That said, property tax debt is not like normal debt. It's directly attached to an asset in the physical world: a piece of land. That land can be sold, and some percentage of the debt can be collected, even if the owner who incurred the debt has long since died. Writing off part of that debt is fine from an accounting point of view, but you can't write off the blighted property. It still sits there, in the real world, and it will until the city sells it at sheriff sale or puts it into a land bank.
 
 
 
Comment From Jones
Is the lower rate of collection under this Admin specifically related to any policy change? The fact was referenced several times, but no actual reason was offered. They say the economy resulted in lower collection rates. Was there anything to refute that?
 
 
Patrick Kerkstra: 
Jones - The economy did not have anywhere near as dire an impact on property tax collections in other cities as it did in Philadelphia. See this chart:http://public.tableausoftware.com/shared/GY5N3RZ5P?:display_count=yes
 
 
 
Comment From Your Name
in other counties of this state if you are 1 yr behind they sherrif you out
 
 
Kevin Gillen: 
Johnny, I actually know that property very well because I live near it. The city had a problem enforcing collection on that property because ownership was tangled up in court, so it wasn't clear who the city should be going after or who it could take possession of the property away. More broadly, the issue of "tangled title' is actually a major obstacle to collection enforcement in Philly. There are many homes that are occupied by the grown-up children of the original owners, who have since passed away. If ownership is not legally clear, the city has a very difficult time getting the property to sheriff's sale.
 
 
 
Comment From Michael T. Welsh
What city department is primarily responsible for these collections? Revenue? If so, why is the revenue commissioner still employed?
 
 
 
Comment From Lauren
4100 block of Mitchell street. Between Pensdale and Shurs lane in the Roxborough/Manayunk area. It is owed byPhiladelphia Redevelopment Authority. I submitted a petition through their website to them about turning it into a community garden.
 
 
Patrick Kerkstra: 
The Revenue department does now have primary responsibility for collections. Until recently, that job was jointly shared between Revenue and Law. One of the reforms the Nutter administration put in place to try and improve collections was to bring attorneys from Law into Revenue.
 
 
 
Comment From Your Name
These series really highlights the utter failures in the Nutter Administration and the City overall. It is infuriating to read that they only respond in writing. In the end, we all know that means it will be back to business as usual once the heat from this stories dies down.
 
 
Kevin Gillen: 
Lauren, did you place a $ bid on the property or just petition for conversion to a garden? If you went through RDA's web portal, there was likely a suggested bid price for the property. Can you tell me what the $ amount was and if you placed a bid above or below it?
 
 
 
Comment From Monty Wilson
Kevin: I largely agree with you. Believe it or not, I'm not advocating for homeowners to be 'excused' from paying, as you said that has costs. For too long however the conversation around delinquency has focused on the binary choice of either non-payment/non-enforecment or "pay in full or get out." When it comes to family homes, I'd like to see the converstion shift towards a belief that homeowners must cure thier delinquinces and pay BUT that we must look at creative and cost effective ways of doing that. Patrick's article went a long way towards making that distinction between the 79% of delinquent investor properties and the 21% of deliquient homeowner properties. the bill City Council is currently considering on payment plans for homeowners will go along way towards giving homeowers "one bite of the apple" at a fair payment plan, then real enforecment if they fail to pay. What I'd like to know more about is the numbers and dollars? what does a tax f/c cost? What is the cost of when a household is evicted? Are most of the properties then sold or do they tend to remain vacant? This is data which could really inform discussion and which as far as I'm aware no one has. Do you know if these costs and data are available?
 
 
Patrick Kerkstra: 
Your Name - It remains to be seen if the administration can move the needle, but there does seem to be real effort being made now. $40 million is nothing to sneeze at - provided it can be spent well.
 
 
Patrick Kerkstra: 
Monty - Quick correction. Only about 60 percent of properties are investor owned. 21 percent are owner occupants in low income neighborhoods. The balance are owner occupants in moderate and high income neighborhoods. Kevin will address your question.
 
 
 
Comment From AP
Patrick: The continued silence from the Philly Sherrifs Office is very disturbing & embarrassing. Please continue this series with focus on the continued corruption & incompetence of the Philly Sherrif. What ever happened to all the money that was "found" in the secret bank accounts of former Sherrif Green?
 
 
Patrick Kerkstra: 
AP - The sheriff's office has a long history of problems. but I've not been convinced that they are to blame for weak delinquency enforcement.
 
 
 
Comment From Paul Glover
A land bank proposal is before City Council. It would consolidate vacancies and delinquencies within one agency with an appointed board of seven members. I'd rather see the board elected by neighborhood organizations, mandated to meet basic needs.
 
 
Kevin Gillen: 
Monty: I don't know the exact $ cost of foreclosure. But, I can tell you from numerous conversation with collection agencies that the accumulation of interest and penalties are a major obstacle for low-income delinquent homeowners to settle up their bills. It's like getting behind on your credit card debt--at some point your debt is growing faster than your income, so you give up payment altogether. Early intervention is the primary solution to this problem. If you get dlinquent homeowners into a payment plan before they are more than 3 years delinquent, then your collection rate becomes much better.
 
 
Patrick Kerkstra: 
Paul - the makeup of any Land Bank board is sure to be a very hotly contested issue. As will the role of City Council in deciding who gets Land Bank properties.
 
 
 
Comment From Mike
This series should run weekly so that all taxpayers have the opportunity to read this.
 
 
Patrick Kerkstra: 
+1 to Mike.
 
 
Kevin Gillen: 
Agreed, Mike! :-)
 
 
 
Comment From Stefanie Seldin
Don't want to hack your chat, Kevin and Patrick, but would recommend Lauren call Amy Laura at PILCOP about her garden:http://pilcop.org/garden-justice-legal-initiative-gjli/.
 
 
 
Comment From Monty Wilson
I'd like to know both of your opinions of the propsed $30,000 homestead exemption. It terms of its costs/benefits to the City and homeowners, are you in favor of it or againt it? Would your opinion change if it was more narrowly tailed to apply only to seniors or the disabled or low-income homeowners?
 
 
 
Comment From Felicia
I happen to believe an internal review is due of the process by which revenue is collected, maybe outsourcing this function can achieve a better result, b/c its not happening in Philadelphia nor Camden..
 
 
 
Comment From Steve
What were you thoughts on the 'outrage' expressed by city council members. Surely this couldn't have been news to them, right?
 
 
Patrick Kerkstra: 
Steve - City Council has indeed been aware of the city's delinquency problem for some time, and their role in all of this is interesting. Certainly council's influence has, in the past, weakened the city's enforcement. Council members have moved to stop sheriff sales for constituents and even for their own employees. But in recent years, Council has been pushing pretty hard for some change on this issue. I think that's been driven by the lack of city revenue. Council has had to take some very tough votes raising taxes, and they are very displeased to do so when so much tax money is being left on the table uncollected.
 
 
 
Comment From Lauren
Thanks very much Stefanie! I appreciate any help/ideas!!
 
 
Kevin Gillen: 
Monty, the problem with any of the exemptions or other relief measures, however well-intended, is that they shift the tax burden onto others by making them pay more. The homestead exemption rewards homeowners but punishes renters and investors. Gentrification relief rewards long-term homeowners but punishes new and first-time homebuyers. Senior citizen relief helps low-income homeowners but punishes young homeowners. For those households that have an inability to pay, I think the best solution is deferal on tax increases until time of sale, transfer or death.
 
 
 
Comment From Larry
The problem I have with the city in general is it’s lax ability, or willingness to collect on anything that requires effort. With the exception of the Parking Authority, it appears that I can avoid paying real estate taxes, L&I permits and violations, bail and other city fines for years and years without penalty. I appreciate the sudden call for the tax deadbeats to pay up, but why isn’t that call being sounded across the board. The only agency in the City, and it’s really a State agency that has any enforcement teeth, is the PPA. It’s very frustrating that Parking payments seem to rank higher than taxes and building code violations.
 
 
Patrick Kerkstra: 
Larry - City Controller Alan Butkovitz says there is a "culture of non payment" in Philadelphia.
 
 
 
Comment From Jones910
Do we have laws currently that allow the city to issue arrest warrants for people for property tax evasion? At least in court they have the opportunity to explain themselves and start a payment plan. Complete non-payment should get you thrwon in jail, especially after 10+ years!
 
 
 
Comment From Ted
Pat, are there any programs in place for the average person or business to purchase any of these properties?
 
 
Patrick Kerkstra: 
Ted - Buying these properties is a challenge for an average person or business. Anyone can go to a sheriff sale, but the process is pretty confusing and opaque. It's dominated by regulars, many of whom are speculators. The sheriff's office does offer workshops and has some material online on how to navigate the process.
 
 
Patrick Kerkstra: 
And that's all the time we have today. Thanks everyone for taking the time to join us.
 
 
Kevin Gillen: 
Jones, the primary enforcement mechanisms that any city has for deliquent taxes are liens and foreclosures. A lien prevents the owner from receiving any proceeds from sale until the tax bill is paid, and foreclosure will actually take the property away for liquidation at sheriff sale. Arrest is only allowable in cases of dangerous negligence (e.g. the property is a fire hazard) or is a site of criminal activity (e.g. a meth lab).
 
 
 
Comment From AP
Patrick: Is it possible to publish the "best practices" used by other major cites for tax collections?? Why do Philly officials insist on their unsuccessfull means & methods when we could just duplicate whats being done in other finacially responsible cites?
 
 
Patrick Kerkstra: 
AP: Inquirer partner PlanPhilly has a story on this very subject today:http://planphilly.com/articles/2013/03/12/ravaged-by-neglect-part-four-the-challenge-of-fixing-philadelphia-s-broken-approach-to-land-use
 
 
Patrick Kerkstra: 
Thanks for chatting today everyone.

About the author

Matt Golas, Managing Editor, PlanPhilly

mgolas@design.upenn.edu
http://www.design.upenn.edu/pennpraxis/ 
p-215.746.4228 f-215.573.9600
B.A., The Catholic University of America
Golas worked in the daily newspaper business for 32 years, including 20 at The Philadelphia Inquirer, where he was Metropolitan Editor. He was also Executive Editor and Vice President of the Wilkes-Barre Times Leader.



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