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Reforming Philadelphia's Residential Tax Abatement

Posted by: David Gest
Thanks to: John Kromer
10 February 2006 - 7:00am

While the abatement can be a 'wealth magnet' for the city by generating market value from tax-free properties, the real benefit may be limited to the developers who cash in.

"How best to describe Philadelphia's 10-year residential tax abatement: Is it the city's most effective economic development tool or most inequitable public policy?

You can find plenty of evidence for both points of view in a recent Fels Institute of Government study (available at www.sas.upenn.edu/fels).

In one sense, the abatement is just what our city needs: a wealth magnet. This policy, through which the market value of new residential development can enjoy property tax-free status for a decade, generated $485.5 million in new market value in Philadelphia from 1999 to mid-2005."

"But as public policy, the abatement is lacking in one important respect: Most of the direct benefit of this incentive goes to the developers of high-priced townhouses and condominiums."

Full Story: Using city's tax-abatement windfall
Source: The Philadelphia Daily News, February 9, 2006
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The areas where we have severe blight and indications of more blight to come are basically the same as they ever were. How in the world are we ever going to move our community development selves into an alternative future that thinks differently about the challenges we face in our cities and low-income suburban and rural communities?
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