Well, there's a rush on high-end development, because those units have a high profit margin and therefore can finance the cost of more expensive labor. Middle-income housing isn't being built at the same rate as million dollar condos

I'll make two suggestions, both of them easy to implement.

Taxes: Whenever the subject ot cutting the wage tax or business privilege tax is brought up, someone invariably points out how dependent the city is on these taxes and how they constitute 50% of general revenues or some incredibly high percentage. Well, I have to wonder: In most cities, the real estate tax is the principal source of revenue. Why is it that this city cannot raise more funds from the real estate tax? Baltimore raises about $545 million annually from its real estate tax. The City of Philadelphia and the Philadelphia School District raise a combined total of $790 million. And Philadelphia has about 2.3 times the population of Baltimore. What gives? It has been reported on Hallwatch that the average sale price of homes in the City has risen to $84,000 in 2004 from perhaps $55,000 five years ago. Why is this not being reflected in real estate tax receipts? Why are receipts only projected to rise something like 3% next year? Two reasons I think. A lot of properties in the City are desperately under-taxed. The worst examples are probably in North Philadelphia. There are properties in Junogi worth over $100,000 which pay $92 in annual taxes. There is also a huge warehouse on the riverside of Fishtown that pays $600 in taxes even though it sold recently for $600,000. If you corrected some of these absurdities, it would afford the City some room to cut wage and business taxes. The other problem of course is the enormous number of delinquent properties. In some neighborhoods, as much as 40% of all properties. The total delinquencies according to Hallwatch are in the neighborhood of $500,000,000. Are these delinquencies collectible? Well, put it this way. Sheriff sales these days are attracting ridiculously high bids. All the city has to do is push these properties to Sheriff Sale and the money from the sale will pay off the taxes. Yet the city just allows the properties to languish, many of them more than 10 years delinquent. OK, I've said my two cents.

I agree that Sheriff sales don't go through quickly enough... but that's not at the crux of the real problem with real estate taxes. The real problem is that properties are undervalued in the City for purposes of tax. It's ridiculous. In our neighborhood, for example, you don't see many properties listed for under $200k and hardly ever for under $150k anymore. My assessment is more $100k below FMV. The City takes only 1/3 of the "FMV" for the assessment, and in my case, for example, they are way off. When they try to correct the assessments to reflect the actual transactions, like they did in Manayunk a couple of years back, they get nothing but political grief about how they're driving old folks out of the neighborhood (blah, blah, blah) even though there are safeties in place (such as real estate tax freezes) for those folks.

The reality is, much like the death tax & IRS, it's really easy to trot out some sympathetic figures who won't even be affected by an increase and make a huge political scene.

And I say this as someone who advocates for the poor and elderly every day.

The real naysayers (at least in our corner of the world) aren't homeowners who aren't generally opposed to increases in real estate taxes (which are deductible on your income tax return) so long as other taxes stay low. Instead, it consists of greedy landlords who want to keep property taxes low, not report income for purposes of the BPT/NPT and make a profit at the expense of those of us in the City who don't mind paying our fair share.

* And yes, note that I qualified landlords with the phrase "greedy" - I, too, have been a landlord and we did things the right way. I only refer to the ickiest of ick here.

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www.taxgirl.com

half of our block hasn;t paid last year's taxes yet. and nobody trusts that city hall woudl lower the wage tax burden if they increased the prop tax. the low prop taxes are one of the few offsetting cost factors in choosing to live down here.
as for landlords, the ickiest of ick do not care about the prop tax rate...they don;t pay it. my landlord hasn;t paid in 4 years. a company owns it the property. the city shoudl employ someone to go around and force sheriff sales on properties.

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"You down wit OPM?"
Fumo: "Yeah, you know me!"

That's easier said than done. I hate the many property owners that don't pay their taxes and then sit on the property and let it deteriorate. However, as soon as the city puts pressure on, they lawyer up and cost the city more money in court.

How do other cities handle this probelm?

I honestly don't think "lawyering up" by deliquent homeowners is the problem. The problem is rampant mismanagement by the sherrif's dept.

Lets say I know someone who bought a home at sherrif's sale. This was before Sherrif Green installed some of the reforms that have happened recently to make it easier for the public to get info and participate in the auctions. At that time the "public auctions" were basically held for about 14 real estate investors who represented about 95% of the sales of deliquent properties. This couple paid one of those insider real estate investors $600 for about $100 in paperwork to put the word out to the other 13 bidders that he was interested in the home. Not so miraculously the couple "won" the auction with the investor acting as their "proxy bidder". Actually miraculously that couple got a mortgage on a sherrif's sale by agreeing to a totally abusive 14% balloon mortgage for the first year they owned the house and refied to a "normal" mortgage as soon as the first year was over. In PA the owner who looses a property to sherrif's sale has a year to pay back the city all back taxes and fines, as well as the new buyer all "necessary repairs", to reclaim the deliquent house.

Anyway to get the sketchy first morgage, the title company gave title insurance on condition of a handsigned letter form Sherrif John Green himself promising that on the day they recieved payment, the Sherrif's Dep't would issue a new clean title to the property. It turns out however that the Sherrif's Dept. had farmed out the processing of the titles to one of those "no-bid" contractors we all have been reading about so much in the paper lately. Sherrif's Dep't gets the payment, one month passes, two months pass, three month's pass. The title insurance company is calling the Sherrif's Dept every single day, the couple is calling every single day. Certain legal complications are keeping the couple from moving into the house they are paying a mortgage on because they do not have a clear title on the property. Stress levels rise.

Someone suggests calling the couple's city council person and once they do sure enough - the next day the title suddenly is "found" - why because the Sherrif's Dep't is run as a patronage factory and is only accountable to political "players" not as an actual revenue collection agency of the city.

Do you remember how the FBI probe started? One of Blondell's aides cut a deal not cash a check for back taxes paid in full by one of Chestnut Hill's largest and wealthiest real estate managmenet companies. Intead of turning over the check to the right channels to make sure the city got its full back taxes, this aide contacted Shamsun din Ali to offer him a chance to get paid by the city to "collect" the back taxes (which he was already holding a check in his hand for). The realty company would get a healthy discount on the back taxes, Shamsun din Ali got healty slice of the smaller tax payment he collected and he agreed to give the aid a slice for lining him up with the deal. Sahmsun din Ali's good friend ron White made some calls to expedite the process of Ali getting approved to "collect" the smaller tax bill. The Feds were already tapping Imman Ali's phone because they suspected him of collecting "street taxes" from drug dealers, owing from his status of "foremerly" being a head of the Junior Black Mafia (which the Feds think he never stopped heading even post-Islam). Drug investigators were overhearing all these cell phone calls about insider dealings around City Hall and the entire Ron White/FBI bug probe was born. Oila.

I'm not saying that every transaction with the Sherrif's Dept real estate division is blatantly corrupt like the one involving Shamsun din Ali, but there is a lot of hinky business going on in that Dep't. All this stuff about the FBI probe is in the public record and has been published by the majornewspapers but strangely a lot of folks seem to beunclear about this portion of the ron white FBI probe.