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Deadly fire spurs call for stricter penalties

04/16/12

In vast swaths of Philadelphia, you don't have to look far to see the problems caused by vacant properties.

 

On Broad Street, just north of City Hall, the plundered Divine Lorraine Hotel looms as a monument to tax delinquency and neglect.

 

Even the most posh city blocks are not immune from vacant houses, a haven for rodents and criminals.

 

On Monday, the fire at the former Thomas W. Buck Hosiery factory in Kensington showed that vacancy can be deadly. Two firefighters lost their lives when a blaze of unknown origin caused a wall to collapse.

 

The tragedy has amplified calls for the city to step up enforcement against tax deadbeats who don't take care of their properties.

 

"If owners don't feel financial pain or the threat of losing their properties, I don't think anything is going to change," said Matt Ruben, president of the Northern Liberties Neighbors Association.

 

Overpowering forces - the loss of manufacturing jobs, poverty, decades of failure by multiple administrations to enforce building codes and collect taxes - have created the problem. And though there are potential remedies, there are no quick fixes.

 

 

"This is a problem 75 years in the making. We're an aging, old, manufacturing city that's going through a transformation. We're not going to fix this in short order, and we're not going to do it with a sort of magic solution," said Richard Negrin, who as city managing director has overseen development of a new vacant-property strategy.

 

One idea Philadelphia is exploring is the "land-bank" concept.

 

Dan Kildee, a former county official in Michigan who pioneered land banks to deal with thousands of abandoned homes there, said they had been a way to manage a complicated problem.

 

"I'm very careful not to point the finger of blame at local officials" over vacant properties, he said. "This is an overwhelming problem that local officials are having to deal with that nobody ever expected."

 

In Philadelphia - where the name Sam Rappaport still symbolizes the belief that city landlords can flout laws - the Kensington fire feels horribly familiar. The late Rappaport had invested the minimum in his properties, blighting entire blocks.

 

In 1997, a wall of a Rappaport property collapsed. Common Pleas Court Senior Judge Berel Caesar, who was walking past it, was killed.

 

The Kensington warehouse is owned by a company controlled by Yechiel, Michael, and Nahman Lichtenstein of Brooklyn. They own multiple properties in Philadelphia and owed the city about $385,000 in unpaid taxes on that building.

 

The Lichtensteins are not talking to reporters, and only limited statements have been made through their lawyers.

 

The Philadelphia Department of Licenses and Inspections had cited the Lichtensteins for problems at multiple properties, including fire-code violations and trash on the porch. In some cases, the Lichtensteins complied. In others, cases were dismissed.

 

The Lichtenstein group had planned to turn the Kensington building into condominiums. In late October, neighbors, fearing that lack of security at the site could lead to a fire, began complaining to L&I.

 

The agency was pursuing court action against the Lichtensteins to force them to secure the building. Because of landlords' due-process rights, that can take several months.

 

"We can't go out day one and secure it ourselves," L&I spokeswoman Maura Kennedy said. "That's actually a property-taking. We've actually lost in court when we've done that" at other properties.

 

In February, the city began foreclosure proceedings to collect unpaid taxes on the property. By then, the Lichtensteins had been delinquent for three years, but Philadelphia has historically taken much longer to foreclose, creating a culture of nonpayment that is a reason one in five properties in the city is tax-delinquent. That rate is far higher than in any other major U.S. municipality, according to an Inquirer study.

 

A tax-delinquent property in the 700 block of Market Street owned by the Lichtenstein group was once a Rappaport property.

 

Yet, though the two tales have some similarities, they differ in many ways.

 

Rappaport thumbed his nose at L&I for decades but paid his taxes. The Lichtensteins have been doing business here for only a few years. Rappaport's properties deteriorated so badly there were calls to demolish them, and his estate paid a large settlement to the Judge Caesar's family. The Buck building, L&I said, was structurally sound.

 

Under Commissioner Fran Burns, L&I has come a long way from the days when landlords did as they pleased, Kennedy said. Previously, the department answered only 40 percent of calls. Now, it gets to all of them and tells callers how long it will take for L&I to check out a problem - something that had never happened before.

 

Burns also introduced a system to prioritize which buildings were most dangerous.

 

No one denies the city must find more efficient ways to deal with its estimated 40,000 vacant properties, 10,000 of which are owned by government entities.

 

Under Managing Director Negrin and Deputy Managing Director Bridget Collins-Greenwald, the city is revamping property sales. It plans to roll out a new system by the end of May.

 

The new program would centralize the process in one city agency. It also would list properties with real estate agents, offer discounts, and eliminate frustrating policies.

 

Council President Darrell L. Clarke, for example, was dismayed recently when a developer wanted to buy a property in Strawberry Mansion, but the city demanded $250,000, arguing that comparable properties had sold for that much.

 

"I know Strawberry Mansion," said Clarke, who grew up there. As the neighborhood has declined, lots have often changed hands for about $1,000. The city was comparing Strawberry Mansion, an economically challenged neighborhood, to an area near Temple University where construction has been booming, Clarke said.

 

In the new system, Collins-Greenwald said, the city would no longer walk away from a deal because comparables were not close to actual offers.

 

Nutter administration officials say they have moved more aggressively against tax deadbeats.

 

Mark McDonald, a Nutter spokesman, said the administration was attacking the problem on multiple fronts, including increasing tax collections without resorting to sheriff's sales.

 

But some believe the city should move even faster. Councilman Bill Green has introduced legislation that would require the city to foreclose on tax delinquents within a year while creating payment plans for low-income people to avoid throwing them out of their homes.

 

Kildee, who now runs the Center for Community Progress, which helps governments around the country improve vacant land, says land banks can help. They allow cities to foreclose quickly, sell what they can, and use proceeds to knock down problem properties.

 

One concern about land banks is that they put more property in government hands.

 

Kildee argues that, because cities must cope with the problems associated with vacancy - crime and trash - they are, in effect, landlords of properties they don't own, so they may as well seize them.

 

Aggressive action also sends a message that everyone must pay his taxes, he said.

 

Legislation is pending in Harrisburg and in City Council to create a land bank.

 

Councilwoman Maria Quiñones-Sánchez, who sponsored the land-bank legislation, said it would have helped in the Buck case.

 

"The land bank," she said, "would have immediately flagged the property as tax delinquent and said we're going to acquire it because we knew there was an interest in it already."

 

Sandy Salzman, who runs the New Kensington Community Development Corp., acknowledges that deterring vandals is difficult. For example, they opened entrances to the Buck building that had been welded shut.

 

Even so, she believes the city can do more.

 

"You're going to have to deal with these issues faster," she said. "Everybody in the neighborhood knew this was a disaster waiting to happen."

 

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