Rebuilding Place in the Urban Space

"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Monday, January 09, 2017

A great example of the market at work: making a business in restoring blighted properties/curing nuisances (Philadelphia)

Many times I have written about how the State of Ohio has a strong receivership statute which allows nonprofits to take over properties that are "notorious" nuisances, "cure" the nuisance, and get awarded ownership of the property, which they subsequently sell.

The Cleveland Restoration Society has acted under that statute to fix properties and preserve their historic character, and then to sell them to property owners committed to maintaining the property ("Housing receivership to cure nuisance properties").

Pennsylvania has a similar law, called Act 135 ("Pennsylvania passes receivership law").  In Philadelphia, two people have created a business of curing nuisances and fixing properties on behalf of nonprofits ("These guys are Philadelphia's professional Blightbusters," Philadelphia Inquirer).

From the article
Operating under the more-corporate-sounding Scioli Turco Inc., they have mastered the ins and outs of an obscure state law called Act 135 that enables nonprofits to take control of blighted properties, fix them up, and sell them ("Philly nonprofit finds way to reverse blighted properties," Philadelphia City Paper). The owner gets the proceeds, minus the cost of repairs and Scioli Turco’s expenses.

It sounds almost too easy, yet Scioli Turco’s successes with Act 135 promise an alternative to the usual, slow-moving approach to attacking Philadelphia’s blight problem.

Scioli Turco is the brainchild of two Bella Vista activists, Joel Palmer, a retired pharmaceutical salesman, and Jeffrey Goldman, a database analyst. Frustrated by a long-vacant VFW post in their neighborhood, they asked the courts in 2011 to appoint them as the building’s conservators under the Act 135 rules.

Using their own money and loans, they put in $100,000 to stabilize the building. After selling it for almost three times that amount, Palmer said, they realized “the process was scalable” and decided to form a nonprofit to pursue other eyesores. ...

Since then, Scioli Turco has rescued 50 problem properties, not just in Bella Vista, but around the city.
Seems like a pretty creative and proactive method for revitalizing neighborhoods and addressing persistent problems.

-- Implementation and Best Practices Manual, Pennsylvania’s Abandoned and Blighted Property Conservatorship Act, Regional Housing Legal Services
-- Using Conservatorship to Reclaim Properties: Case Studies

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At 2:50 PM, Anonymous Anonymous said...

Philly has a huge abandoned building problem perhaps the worst of all east coast cities- I saw somewhere that Baltimore has about 40-50000 abandoned buildings. Clearly something is wrong when an otherwise healthy city and region has this sort of thing going on. Something is broken down to allow this to happen.

At 4:56 PM, Blogger Richard Layman said...

DC is fortunate in that the federal govt. anchors a strong business core.

The cities you mention don't have a similarly strong business core, which means that they aren't an "otherwise healthy city."

Philadelphia has lost a lot of business to the suburbs, partly/largely due to the wage tax for everyone including nonresidents. Suburban jurisdictions don't have a similar tax.

see the cited article from the Inquirer in this piece:

Similarly, Baltimore is hollowed out business wise because of the suburban counties, especially Baltimore County. but also Howard (Columbia) and Anne Arundel (more dominated by the state govt., but the BWI Airport area too).

All the reason for Baltimore City and Baltimore County to merge.

I just saw an article that in Philly, Paul Steinke (Ex GM of Reading Terminal Market) is now in charge of the Preservation Coalition.

FWIW, I wrote about Philadelphia's preservation-based opportunities back in 2003, but I don't think I understood enough the impact of the wage tax.

Probably Philadelphia needs a recruitment program similar to LiveBaltimore. But... they have been a leader in 10 year tax abatements on conversion of commercial properties to residential, and on new developments getting a 10 year tax abatement.

That's an inducement equivalent to the $5000 or $7500 tax credit first time buyers were getting in DC.

... I was watching a House Hunters episode on Philadelphia, and on one house they showed, the abatement was worth something like $500/mo. or more, which supports $50,000 of mortgage (at least for 10 years).

At 11:32 AM, Anonymous Anonymous said...

with its proximity to DC one would think Baltimore would benefit - actually some Inner harbor areas are virtual DC commuter suburbs for MARC. One of our guys where I work told me that everyone on his block in federal Hill works in DC. Philly has a similar situation- many people live in Philly and commute to jobs in Manhattan. Philly is called the " Sixth borough" of NYC by some.

At 5:28 PM, Blogger Richard Layman said...

I was surprised that in an article about the Downtown Partnership, and that is Downtown specifically, not neighborhoods like Federal Hill, they said that only 2.5% of the people commute to DC.

Of course, plenty of others do.

The thing is that the commute, even if you live close to Penn Station or Camden, still kinda sucks. You are spending a lot of time each day on it, when you include the time to get to and from the station in Baltimore, and on the other side.

But there is no question that if you're gonna commute anyway, you can get a lot of house for the money.

... I still can't believe that the Union Square neighborhood is 15 minutes walking to Camden, and yet still languishes pretty seriously.

At 2:37 PM, Anonymous Anonymous said...

there are great houses not far from good transit in Baltimore but Baltimore has really high real estate taxes- way out of proportion to other areas- when they can fix this trouble they will attract more settlers in some of those old areas. Baltimore has wonderful and gigantic historic houses relatively close in. In DC most of the old houses got demolished even before WW2 as the downtown grew by leaps and bounds. Entire areas in DC that were made up of gigantic early, middle and late 19th century houses were demolished for high density offices. Pre -1950's DC was a lot more like Baltimore than many people realize.

At 3:06 PM, Blogger Richard Layman said...

Yes. DC is an exception amongst old line center cities in that its residential property taxes are comparatively low.

Baltimore, Detroit, taxes are 2x DC's.

At 8:24 AM, Anonymous Anonymous said...

low residential property taxes are what has fueled a lot of DC's boom- people are very aware of the low property taxes and have invested in DC as a result of this. It is a major factor and I have heard it brought up numerous times by realtors and buyers here

At 8:27 AM, Anonymous Anonymous said...

the large part of what is present day DC's downtown from the White House up to Kalorama was a high end urban mansion zone - these large houses and apartments were torn down to make way for offices as far back as the 1940's-this zone extended east all the way across Mass Avenue towards where the present day convention center is now


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