The consequences of the flawed tax-collection system are evident throughout Philadelphia, even in the city's more appealing neighborhoods. One example: a boarded-up house on an otherwise attractive block of Montrose Street in the South of South Street neighborhood. According to city records, the house was purchased in 1986 by a development corporation that now owes the city nearly $16,000 in property taxes.
If this house were located in Flint, Mich., a government-affiliated authority would have seized it months ago and turned it over to a responsible developer for rehabilitation, resale, and occupancy. With respect to tax enforcement, Flint's system is light-years ahead of Philadelphia's!
Four public agencies play key roles in Philadelphia tax collections: the Licenses and Inspections, Law, and Revenue Departments, and the Sheriff's Office, which administers auctions of tax-delinquent properties. L&I's performance has improved greatly under the Nutter administration, and the Law and Revenue Departments have performed reliably and consistently. The Sheriff's Office is the weak link.
The office does not have the capability to scale up the number of tax-delinquent properties brought to auction, and it can't transfer clear title to auctioned properties in a timely, reliable manner. Philadelphia's tax-collection process therefore has little credibility, and irresponsible investors and developers are quick to take advantage of it.
As important, the tax-sale auction is in its current form a poor vehicle for stimulating reinvestment in neighborhoods. Auctioned properties are conveyed to the highest bidders with little consideration of whether they can maintain and improve a property, or even whether they intend to do so. The process does give qualified developers and contractors an opportunity to acquire properties, fix them up, and return them to the market, but the meager consideration of bidders' backgrounds and intentions opens the door to predatory speculators.
A Pennsylvania Intergovernmental Cooperation Authority report last year described how Philadelphia could replace its antiquated tax-collection system with a more effective one encouraging responsible investment and cracking down on negligent property owners. A working group convened by the city's Redevelopment Authority is exploring legislative and administrative remedies to achieve those goals.
The authors of the PICA report and others have made a convincing case for the elimination of the Sheriff's Office and the restructuring of the tax-collection system. But calls for systemic change are likely to fall on deaf ears as long as the Philadelphia Sheriff's Office is headed by a politician - currently Sheriff John Green - who enjoys a publicly funded salary but doesn't report to the mayor.
Until this deficiency is addressed legislatively or politically, Philadelphia will continue to suffer from an epidemic of property neglect.
John Kromer is a senior consultant with the University of Pennsylvania's Fels Institute of Government, a former Philadelphia housing director, and the author of "Fixing Broken Cities: The Implementation of Urban Development Strategies." He can be reached at email@example.com.