Abandoned properties require reform, not more money

A few decades ago, abandoned urban property wasn’t much of an issue, since cities were in clear decline and it wasn’t obvious that anyone even wanted the land to begin with. But with the revival of downtowns (including Detroit’s!) and cities in general, the issue of derelict property is going to become a lot more embarrassing and inexcusable. Philadelphia alone has 40,000 abandoned or vacant properties, and despite Mayor Nutter’s supposed dedication to fixing Philadelphia’s blight, the Daily News doesn’t sound optimistic.

And while they acknowledge that one-quarter of these properties are government-owned, I think they downplay Philadelphia’s culpability with the half of all vacant private properties that own backtaxes. As emphasized in a Radio Times discussion on the topic of vacant properties in Philadelphia, it is the city’s job to deliver a credible threat to property owners that their land and buildings will be seized if they don’t pay their taxes. This is a basic function of government, and one with broad political support (who, besides drug dealers and the homeless, has an interest in empty buildings?) – the fact that the city is failing at it is a very troubling sign.

As usual, throwing money down the hole (the subject of my favorite Onion video) is the most popular insider solution. But despite spending almost $300 million during his eight-year term as mayor, John Street “fell far short of his goal to demolish 14,000 buildings.” The “mo’ money” approach even has intellectual backing, with a Philadelphia Fed, ironically enough, publishing a report by Alan Mallach explaining how the federal government should throw $3.92 billion (warning: PDF) at the problem. But Philadelphia’s problem is not like Detroit’s, where the property needs to essentially be rewilded – Philadelphia is not in decline, and these abandoned properties are common even in trendy neighborhoods with excellent transit coverage. I have difficulty accepting that the cost of the administrative staff necessary to seize and auction off delinquent properties should exceed the revenues from their sales, especially considering the strength of inner-city real estate markets recently. And if the bureaucratic apparatus is really so inefficient that it can’t manage such a lucrative operation profitably, or at least with the money it’s already given, then it sounds like what’s need is reform, not more money.