How the Analysis Was Performed

Econsult used economic models to estimate the abatement program's net impact on city tax collections.

The calculations were based on the following assumptions:

That two-thirds of all abated construction would not have occurred without the program. Econsult came to that estimate through two independent methods. One analyzed construction and sales costs to determine which projects would not be profitable without abatements; the other compared suburban and Philadelphia residential construction rates before and after the abatement program was enacted. Both methods arrived at the same conclusion.

That the abated homes were filled with new Philadelphians or existing city residents whose newly vacated homes were then made available to new Philadelphians.

That the abated homes are populated by residents earning the city's median wage.

That future abatements would be granted at the 2006 rate, which in Econsult's view is a conservative estimate.

That values of the abated properties would remain unchanged.