Vacant Land Management in Philadelphia The Costs of the Current System and the Benefits of Reform Cover
Format Economic Analysis
Client Greater Philadelphia Redevelopment Authority
Date November 2010
Length 94

The Costs of the Current System and the Benefits of Reform

Vacant land has a devastating impact on the neighborhoods and the finances of the City of Philadelphia. Of 40,000 vacant parcels in the City, 30,000 are privately controlled and 10,000 are publicly controlled. Ownership of the public parcels is split among four agencies. In this study, commissioned by the Philadelphia Redevelopment Authority (RDA) and the Philadelphia Association of Community Development Corporations (PACDC), Econsult Corporation, the Penn Institute for Urban Research, and May 8 Consulting estimated that vacant parcels cost the City and its residents in the following ways:

1. $3.6 Billion in Lost Household Wealth. Vacant parcels have a blighting effect on nearby properties, reducing values by 6.5 percent citywide and by up to 20 percent in some neighborhoods. This results in an estimated $3.6 billion reduction in property values, an average of $8,000 for each household in the City.

2. Over $20 Million in City Maintenance Costs Each Year. Though the City controls only a fraction of the vacant parcels within the city, it has to bear significant costs to maintain all of them — waste clean-up, pest control, police and fire — totaling over $20 million per year.

3. At least $2 Million in Uncollected Property Taxes Each Year. 17,000 vacant parcels are tax delinquent, most by over a decade, owing a total of $70 million to the City and School District in back property taxes. This number increases by at least $2 million a year.

A strategic and coordinated response by the City could substantially reduce the negative effect of vacant parcels, and transform them from liabilities to assets through redevelopment, with significant gains in neighborhood stability, job creation, and tax revenue generation.