The Philadelphia Land Bank (LPB): Origins, Purpose, Politics, Successes and Ongoing Challenges

Vacant land and vacant properties are a resource for city and community development but cities with plenty of both require institutions and federal funds to generate databases, re-marketize and restore them to productive use. Setting up such an institution requires iterations to its mandate, actor structure, programs and continued oversight. It was 1977 when a 14-member committee called the Vacant Property Review Committee (VPRC) was created by the Philadelphia City Council. Under the VPRC, the process to approve a property acquisition took 12 steps, involved 3 agencies (the VPRC, the City Council resolution and the Property Redevelopment Authority) and took approximately between 1.5 and 3.5 years to achieve a settlement (see Fig 1). This lengthy and bureaucratic process has been criticized because Council members could exert influence on land sales without documentation or reasoning. Local newspapers have reported that public land was sold at below market value to private owners and then flipped for profit. Councilmen used “councilmanic prerogative” to direct development in their districts.


Fig. 1 Process to acquire a vacant lot through the Vacant Property Review Committee (Source: Philly Land Bank)

In March 2013 Council member María Quiñones-Sánchez (7th District) and Councilman Bill Green reintroduced the Philadelphia Land Bank Bill (Bill No.130156) to the Council. The bill proposed a reconstituted VPRC made of District Council Members as an alternative to City Council resolution. This way City Council members have input in disposition decisions at an earlier stage in the process, before applicants incurred substantial time and costs. This reform intended to create a functional land bank, acting as a single entity providing a transparent, streamlined and equitable process to hold, acquire and dispose of vacant land properties in the city and reduce the bureaucratic machinery currently required to make such transactions. The bill garnered support from the nascent Philadelphia Land Bank Alliance representing 12 groups of not-for-profit and for-profit organizations. However, the Council Committee later approved an amendment to keep the Council resolution in addition to the VPRC approval (The Public Interest Law Center, 2013). The new bill only marginally improved the bureaucratic machinery for residents who seek to buy a vacant lot next door: the purchase needs approval by Land Bank staff, the VPRC, the City Council and the Land Bank Board – or more than 41 individuals. Although this still reduced the steps to 10, instead of 12, and takes 1 to 1.5 years, it still puts three organizations’ approval in the way of rehabilitating blighted properties (see Fig. 2).


Fig. 2 Process to acquire a vacant lot proposed in 2013 and instituting the Philadelphia Land Bank (Source: Philly Land Bank)

Reform is needed to better position the bank to perform its mission at the scale and speed needed. The city has an estimate of 42,100 vacant properties. Only 20% are publicly owned, of those 15% are surplus properties set aside for future development and 71% (or 29,800) are privately owned and tax delinquent, which poses another set of challenges. Of the surplus publicly owned land, 35% is held by the land bank, 48% is held by a public entity and 16% by the Philadelphia Redevelopment Authority (PRA). In FY19, there was a budget of $6.93 million, half of which was dedicated to the acquisition of tax delinquent properties. The Bank can afford to purchase up to 325 properties per year (or over 1% of the 29,800 tax delinquent properties in the city). Although in FY17 and FY18 acquisitions increased thirteen-fold and dispositions in the same year rose from 18 to 78, the Land Bank’s resources are limited because the revenue generated by each property acquired and resold is mostly below market rate (City of Philadelphia, 2019).


Reform is also needed to guide the distribution of vacant lots in equitable ways. According to the Land Justice Campaign (2021), in the past five years, only one in three dispositions of City-owned land supported the development of affordable housing. To date only 14% of housing units built or planned for construction on land from the Philadelphia Land Bank are

for households earning below 30% of Area Median Income. Just one in ten went to a community garden or public open space. Meanwhile, land bank data from FY17-FY18 shows that the real estate market is moving into areas that were previously deemed “Transitional, Stressed or Distressed’ in 2015 (City of Philadelphia, 2019)(see Fig. 3). The trend is consistent also in the five year prior (2013-2018) and starting during 2010 post-recession times. This not only warrants risk of homeowners displacement but also with each piece of land lost to for-profit development, the City loses an opportunity to shore up affordability and community-serving uses. To mitigate the former the city activates the City’s Longtime Owner Occupants Program (LOOP) and the Owner-Occupied Payment Agreement (OOPA) that protect tenants against the effects of rising real estate taxes (City of Philadelphia, 2019). But for the latter the Land Justice Campaign calls for more to be done to prioritize community serving uses, committing to permanent affordability, preserving gardens and providing land security for growing spaces.


Fig. 3 2015 Market Value Analysis by The Reinvestment Fund with Overlay of 2018 Indicators of Market Activity (Source: 2019 Philadelphia Land Bank Strategic Plan)

In June 2019, one more land bank reform was passed by the City Council. Bill 190606-AA included a number of significant changes to the current system of vacant land sales that promise greater accessibility, transparency and fairness. The bill will put the vacant land disposal process in the hands of the Lank Bank and eliminates the VPRC. By eliminating the VPRC hearing and approval processes, the steps would reduce to 8 and settlement could be reached within 9 months (see Fig. 4).


Fig. 4 Preferred Process to acquire a vacant lot proposed in 2019 eliminating the VPRC (Source: Philly Land Bank)

Land banks are an essential instrument for cities with large amounts of vacant land and properties and crippled local economies. Having a more streamlined and equitable process to put vacant land and property back into the market is key for city coffers. According to a 2010 study, the current costs to the City were $3.6 billion in lost property value, $20 million in annual City maintenance expenses, and $2 million in lost property taxes (Econsult, 2010). There are real benefits from remediation or redevelopment of vacant parcels in terms of a rise in tax revenue, increase in employment opportunities and overall stimulus effect on the local economy.



References


Econsult (2010) Vacant Land Management in Philadelphia: The Cost of the Current System and the Benefits of Reform.


City of Philadelphia (2019) Philadelphia Land Bank: Strategic Plan & Performance Report (Draft)


Land Justice Campaign (2021) Put Land in Community Hands.


Plan Philly (2019) Philly judge makes $135,000 gaming city land sales.


The Philadelphia Inquirer (2018) Philadelphia Councilman Kenyatta Johnson helped friend make $165,000 flipping city-owned lots.


The Public Interest Law Center (2013) The Philadelphia Land Bank Bill. https://www.pubintlaw.org/current-cases-projects-public-health/philadelphia-land-bank-bill/







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