Busy past couple days for me, so I’m late to the ridiculously awesome PlanPhilly/Inquirer series on Philly’s self-inflicted property tax delinquency epidemic. But you really need to read this! Liberals spend a lot of time worrying about the distributional impact of different taxes, but there are also distributional concerns on the enforcement side.
Philadelphia’s property tax collection policy is a bad joke by design. The prevailing attitude of city politicians has been that aggressive property tax collections would result in some cash-poor homeowners getting foreclosed on, so collections are deliberately lax. In reality though, the big winners from the lax enforcement policy are rich investors, many of whom live outside the city.
The whole series is worth your time, but Jared Brey ably summarizes the whole thing here:
In many ways, and for many years, Philadelphia has failed to implement a practical and effective strategy for collecting delinquent property taxes and putting vacant land and blighted buildings into productive use. The problem is not unique, but other major cities fail to solve it on fewer levels than Philadelphia.
“Speaking from the national perspective, I think there are three key elements of this problem,” says Frank Alexander, co-founder of the Center for Community Progress, a national organization working to resolve the problems of vacancy and blight. “The goal is to have an efficient and effective and equitable system of property tax enforcement.”
Philadelphia’s emphasis on the latter of those three goals—a well-meaning reluctance to foreclose on struggling homeowners—has contributed to a system that is both inefficient and ineffective, as Alexander would put it. As it turns out, though, that emphasis is misplaced: the bulk of our city’s tax debt is owed not by struggling homeowners but by investors.
Other cities have found ways to keep delinquency rates low without putting low-income homeowners on the street. To do so, they use a variety of tools, to varying degrees of success.
Many city leaders are now urging the Nutter administration to support more aggressive tax collection efforts, and that’s right on.
One factor complicating all this is the popular belief that city housing policy should focus on helping more low-income people become homeowners. I think that’s mistaken. What Philly really needs is a much larger stock of quality rental housing, and lower rents. Homeownership is not for everyone, and with mortgage lending standards tightening up, it’s increasingly out of reach for many people. Many Millenials are also just plain not interested in the hassles that come with homeownership. But many Democratic politicians are for some reason uncomfortable with the goal of increasing multi-family’s share of the housing market, and are reluctant to entertain the idea that some of the city’s current homeowners would be better off as renters. But if you can’t afford the property taxes, maybe you shouldn’t be a homeowner.
Pay the taxes or move. Real simple.
People need to stop being leeches on society. It is NOT my responsibility as a taxpayer to carry your ass in a situation you can’t afford. In addition, if you can’t afford the taxes you’re probably holding the city back in other ways as well.
This is another case of fiscal irresponsibility on the part of the Democratic party in Philly. They’re $5 billion short on their pension fund and they let people ignore paying their taxes?
Brilliant.
In their defense, state tax foreclosure laws complicated this until last year. At the end-of-year legislative session in Harrisburg the Philly delegation won broader tax foreclosure powers and land bank enabling legisaltion.
Why does Philly have that problem when Lehigh doesn’t, Northampton doesn’t, Berks doesn’t, etc.?
That’s cover Jon for a city that decided to screw the paying taxpayers to help some people that may or may not have needed it, and then the worthless freeloaders (including rich white guys and minorities looking to game the system) took advantage.
Government should have no ability whatsoever to do this. for example, if the city code states you initiate foreclosure at 180 days delinquent on taxes, then you do so. Period.
That way everyone is treated fairly and the city benefits by maintaining a solid tax base and people that can’t afford homes are moved out so people who can afford them can move in.
They do have this problem! I first learned about this issue from Karen Pooley about two years ago, who’d been working with a statewide coalition of activists to get better municipal tax-foreclosure laws passed in Harrisburg.
Define “better” laws. In who’s view would they be better? What I”m saying is that there is no problem for municipalities to foreclose on delinquent taxes under the current laws. You may not like how it impacts people but it works just fine. Except in Philly apparently.
I’m tired of bureaucrats making decisions that are not in their pay grade. Philly’s legislative body didn’t pass legislation authorizing a slow-down in tax foreclosures, a bureaucrat decided to do it.
That’s bullshit. Pass a law, stick to the law, bureaucrats do not have the authority to do anything other than strictly comply and if they don’t they’re out on their ass with forfeiture of all retirement benefits.
Enough already.
They were trying to make it easier to foreclose on the primary residences of investors who are delinquent on the taxes on their investment properties. We’re not disagreeing about this. I’m agreeing with you that it should be easier to seize tax delinquent properties.
But it’s not hard now? Sure make it easier, but you’re making an excuse for Philly.
They fucked up, period. They need to put their big boy pants on, admit they fucked up, and fix it – not blame someone else for their fuck up.
They got the reforms they wanted, and now we’ll see if its enough. I don’t know why you are resisting agreeing with the point of this post, which is that they need to drop the bleeding-heart anti-enforcement position and collect the taxes more mercilessly.
I agree with the view that the city should be merciless. The city must be required to operate in strict accordance with laws and regulations. If the regulation says you initiate forclosure on day 180, that’s it no deviation period.
I disagree with a bureaucrat making the prior decision to go easy. That belonged in front of City Council, not an unelected bureaucrat. We have to stop that from happening and severely punish bureaucrats who don’t do their jobs – especially when it screws paying taxpayers to the wall.
Enough.