Addressing Blight Proactively to Favorably Impact Municipal Budgets PAHRA Conference Tuesday, September 19, 2017

Winne Branton Principal in Branton Strategies LLC Consultant & Attorney Blight Training and Technical Assistance Program Manager for the Housing Alliance of PA

John Kromer Planning and development consultant affiliated with Penn’s Fels Institute of Government

Addressing Blight Proactively Makes a Community More Financially Viable A strong Pennsylvania economy depends on healthy, stable downtowns and vibrant residential neighborhoods. Blight gets in the way. It has a chilling effect on new business development, and the retention and attraction of new residents needed to broaden the tax base. Conversely, tackling blight raises property values and grows the local economy.

President, Cambria County Commissioners Tom Chernisky “Everywhere I go in the county — I go to borough meetings regularly — I hear about blight all the time. It’s a common problem in every borough and municipality,”  President, Cambria County Commissioners Tom Chernisky

Blight Increases Municipal Costs Blight Causes Municipalities to Spend! Direct costs: Code Enforcement, Police, Fire, Maintenance, Pest Control 2013 Cost of Blight Study - TRI-COG Collaborative 41 municipalities in Allegheny County’s Mon Valley Finding: $10.7 million a year in direct costs 2010 Study of Vacant Land Management – Philadelphia Finding: $21 million a year in direct costs

Blight Reduces Municipal Revenue Blight Hurts the Bottom line! Uncollected Taxes, Reduced Property Values, Lost Household Wealth 2017 Economic Impact of Blight – Lackawanna and Luzerne Counties Finding: $1.4 million a year in lost tax revenue to Lackawanna Finding: $1.8 million a year in lost tax revenue to Luzerne County 2013 Cost of Blight Study - TRI-COG Collaborative Finding: $16-19 million a year in lost tax revenue Finding: $8 million annual loss due to lack of economic development and reinvestment plus $12 million in construction impacts (one-time) 2010 Study of Vacant Land Management – Philadelphia Finding: $2 million in uncollected property taxes a year Finding: $3.6 billion in lost household wealth as vacant properties reduce the value of each nearby property by an average of $8,000

Blight Reduces Confidence in Local Markets “An even less quantifiable way that blight can negatively impact communities is psychological. Housing blight can potentially lead to less community pride, a negative sense of place, and poor perception of a neighborhood that hinders economic and community development efforts.” Measuring the Economic Impact of Blight in Lackawanna and Luzerne Counties (The Institute for Public Policy & Economic Development at Wilkes University, May 2017) http://www.institutepa.org/PDF/Indicators/2017/blight. pdf.

Approach for Distressed Municipalities Blight Training and Technical Assistance to Act 47 and EIP communities through DCED and Housing Alliance Three components: Blight Planning - Five-Step, Fast-Track Method Land Banks - Locally Driven Technical Assistance Code Enforcement - Best Practices

Successful Initiatives in PA Communities

Foreclosed house registry Create a data base of properties that have undergone mortgage foreclosure, to include: Owner information “Local agent” information Record of code enforcement actions

Where It’s Working: Pottstown

Rental housing inspection program Divide the municipality’s rental housing inventory into geographic sectors, and inspect every rental property in each sector. Deploy inspection staff to one or more sectors each year, so that all sectors can be inspected over a three- to five-year period. Focus on health and safety code violations. Coordinate activities with multiple-property owners in order to make the process efficient.

Where It’s Working: Allentown

Ticketing Quality-of-Life Code Violations Issue code-violation “tickets” (similar to parking tickets) for nuisance violations such as uncut grass/weeds, accumulation of rubbish, and junk vehicle/appliance in yard. Hand-held devices can be used to create record of violation and issue ticket. Owner may appeal to an administrative review board. Judicial review occurs only if owner appeals administrative board decision.

Where It’s Working: Danville

Re-Energized Blighted Property Review Committee Have interdepartmental staff group identify best candidates for BPRC action. Have code enforcement staff focus on candidate properties in order to increase prospects for voluntary compliance. Invite non-compliant owners to testify at determination and certification hearings. Offer opportunity to enter into rehabilitation agreement.

Where It’s Working: Reading

Conservatorship An eligible property owner may petition the court to assign a responsible third party to address problems associated with a neglected vacant property. The court may authorize sale of the property following completion of improvements required to achieve code compliance. Following sale, payment of rehab costs has priority over private liens. Sometimes the filing of the petition is sufficient to stimulate owner response.

Where It’s Working: Philadelphia

Property Acquisition Via Private Sale A County Tax Claim Bureau may choose to sell a property that received no bids at the Upset Sale to an individual buyer without having to expose the property to Judicial Tax Sale (“Free and Clear Sale”). The prospective buyer may be able to convince a private lienholder to accept a payment in exchange for a release of the property. Incentive: the lienholder may not receive anything if the property goes to judicial tax sale. By reviewing title search on file at Tax Claim Bureau, a preliminary assessment of feasibility/cost of this approach can be completed.

Where It’s Working: Reading (Redevelopment Authority)

Land Bank Acquisition of Tax Sale Property Under certain circumstances, a Tax Claim Bureau may agree to recognize a land bank as sole bidder for a property listed for Judicial Tax Sale and sell the property to the land bank without inviting competing bids. Notice of intent to conduct this transaction must be published in advance and parties at interest notified. This action is most appropriate in connection with a property located in an area targeted for revitalization, a severely deteriorated property, and/or a property located in a weak real estate market.

Where It’s Working: Westmoreland County

How the Housing Alliance Can Help On-line resource library on blight and land banks: www.pablightlibrary.org Webinars on topics relating to blight and land banks Bimonthly conference calls with land bank leaders Blight listserv Technical assistance for Act 47 and EIP communities

Thank you and please keep in touch! Winnie Branton Branton Strategies LLC wbranton@brantonstrategies.com John Kromer jkromer@gmail.com Housing Alliance of Pennsylvania www.housingalliancepa.org info@housingalliance.org