THE CITY of Philadelphia's 10-year tax abatement on new construction has led to the gentrification of Philadelphia's most vulnerable communities.
By giving huge breaks to those who build or refurbish housing, the tax abatement has increased property values in some of our poorest neighborhoods. Along the way, it has pushed out poor tenants through higher rents, and forced out impoverished homeowners through higher property taxes. And because 55 percent of Philadelphia property taxes go to schools, the tax abatement has also denied much-needed funding to a financially strapped School District filled with children of color.
To put it bluntly, I believe the tax abatement has unfairly benefited well-heeled, largely white investors and developers, while pushing people of color out of their neighborhoods. That's why I was befuddled when newly elected City Councilman Allan Domb proposed extending the tax abatement from 10 to 20 years for properties under $250,000.
I asked him why he proposed such a bill, and he said, " . . . The goal of this legislation really, is to help the surrounding neighborhoods that haven't participated in the economic recovery that we've seen in the areas of Fishtown, Northern Liberties, Point Breeze, etc."
Of course, one man's economic recovery is another man's gentrification.
Fishtown, Northern Liberties and Point Breeze are some of the very neighborhoods where blacks, Latinos and poor whites are fighting tooth and nail to stay in the houses they bought when the property was affordable. Those neighborhoods are the places where people of meager means stayed through the crack scourge and the crime that came along with it. Those communities are the places where longtime property owners swept the sidewalks next to trash-strewn vacant lots.
The longtime homeowners who've managed to stay in Fishtown, Northern Liberties and Point Breeze will tell you they don't need their neighborhoods to be fixed. They simply need to stay in the homes they've lived in for decades. They need to benefit from the revival of their communities.
Domb, a Realtor by trade, says extending the tax abatement will allow such longtime homeowners to benefit by increasing the value of the properties around them. And it will do so, he says, by helping homeowners to afford improvements.
"Someone who wants to put $25,000 improvement in or borrow the money to do it, we're not going to tax them on the increase," Domb said. "We're trying to incentivize them to fix up their neighborhoods. That might be an owner-occupant. It might be an investor. It might be anyone in the neighborhood, but what we want to happen is we want the neighborhoods to get better. We want to give them an incentive to fix up the area."
There's only one problem with that. In the neighborhoods where such investment is needed, people don't have $25,000 or $40,000 to put into home improvements, because they're living from paycheck to paycheck.
In a city with the highest poverty rate of any large city in America, many owner-occupants simply don't have the wherewithal to invest that kind of money in their homes. So, in my view, extending the tax abatement from 10 to 20 years would mainly benefit the well-heeled investors who buy and sell properties, and the real estate agents who serve them.
That's why the real-estate industry publication Realty Trac has praised Philadelphia's tax abatement, calling it a key element of making Philadelphia the Hipster Home Flip Capital of America.
Hipsters and their real-estate agents make lots of money, thanks to the tax abatement, and I'm not angry at them for doing so. But what about those who are displaced when they leave with bags of cash?
Should longtime residents simply allow themselves to be pushed from their neighborhoods, even as those who replace them are given a free ride when it comes to property taxes? Should those who can't afford home improvements watch others benefit from tax abatement legislation?
I say no.
We can't "fix" neighborhoods by simply getting rid of the people who live there. Nor can we repair entire communities by giving tax breaks to the few.
If we are going to give tax abatements to anyone in Philadelphia, they should go to everyone in Philadelphia.
Only then can our neighborhoods begin to heal.
Solomon Jones is the author of 10 books. Listen to him mornings from 7 to 10 on WURD (900-AM). email@example.com.