Lisa Zhu | Banking on a good system

Last week, as I waited on the corner of N. 8th and Lehigh for the No. 47 SEPTA bus that would take me back to Center City, I was struck by the depressing, sporadic gaps of land every few houses. The entire street was pockmarked with vacant lots on which scrubby brown grass competed for space with broken glass, crushed beer cans and discarded candy wrappers. A decade ago, instead of these desolate, litter-strewn plots, this North Philadelphia neighborhood had its fair share of abandoned houses. And while the decrepit buildings have been torn down, the current state of the lots is hardly an improvement.

As part of his infamous Neighborhood Transformation Initiative program, former Mayor John Street spent the majority of his term borrowing money to demolish these dangerous decrepit structures. NTI was intended to revitalize Philadelphia's neighborhoods by curbing urban blight and attracting commercial development. Eight years later, it's still difficult to say whether Street succeeded in his efforts. However, though NTI tore down many of these abandoned homes, the vacant lots left behind by their demolition still serve as an eyesore for the communities affected.

As a solution to this problem, Mayor Nutter and other Philadelphia reformers have advocated for the creation of a land bank that would serve as an inventory for all of the publicly owned properties extant in the City. A land bank would act as a one-stop shop of properties for sale or rent by the City government, thereby facilitating the purchase of otherwise unused land. And once the property is off the City's hands - even for a negligible amount - it saves Philadelphia money, and also earns revenue for the City.

While touted widely during Nutter's campaign, the land bank initiative has since faded from prominence with the increasing emphasis on Philly's massive budget deficits and violent crime. According to JoAnn Jones, deputy director of Philadelphia's Office of Housing and Community Development, "The attention of the City has to be elsewhere at the moment because of our current economic and financial constraints."

Just because officials feel overwhelmed by the scale of problems currently facing the local government doesn't mean they should leave land banks behind. In comparison with the extensive repertoire of policy dilemmas the City is currently facing, the creation of a land bank is much simpler and less controversial. Indeed, this proposal basically results in a win-win scenario for taxpayers, private developers and the local government.

Specifically, land banks provide a multitude of direct economic benefits for the City (though not necessarily in the short term). "There's no real cost associated with [land banks]," said Andy Toy, director of Retail Resource Network at The Enterprise Center. "In the long run, there's a revenue gain from sales and real-estate property taxes, so any costs are outweighed by the benefits."

Moreover, even if the recession prevents Philadelphia's government from garnering large revenues through sales and property taxes, the removal of vacated lands from public ownership reduces the liability costs associated with their preservation. "It's a burden for the City because these properties eventually deteriorate," said professor John Kromer of Penn's Fels Institute of Government. Transferring ownership of these lands to private and nonprofit entities could encourage better maintenance practices. In fact, Kromer cited a study that showed "when vacant properties were greened, the property values around them tended to go up."

In addition to the direct financial gains and savings generated by a land bank, this initiative would provide a stellar example of better governance. "This is in line with what [Nutter's] administration wants to do in terms of improving transparency of government and efficiency of public services," said Cathy Califano, associate director of policy solutions for the Reinvestment Fund.

With these improvements, Philadelphia could attract more commercial and nonprofit development projects - a crucial plus for a city chronically ailing from population decline. Mayor Nutter's goal is to increase Philly's population by 50,000 to 100,000 in the next four years, according to Toy. By using the land bank to better advertise available properties and make the development process more amenable to outside parties, Philadelphia could ensure neighborhood improvements far into the future. After all, our short-term financial crisis should not allow us to make excuses for not taking action on our long-term policy needs.

Lisa Zhu is a College and Wharton senior from Cherry Hill, NJ. Zhu-ology appears on Thursdays. Her email address is zhu@dailypennsylvanian.com.

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