The Foreclosures of Philadelphia: A daunting challenge
To reside in Philadelphia means paying a flat and regressive wage tax, a punitive 8% sales tax on many essential items, and then, homeowners must meet a mortgage obligation in a city with a property tax policy that penalizes the homeowner for maintaining their home. Land value tax/AXI is a remedy - With a simple shift in rates to a heaver tax on land values, in the first year, one actual homeowner facing foreclosure could save 10% on their annual tax bill.
According to the most current assessment rolls for Philadelphia, Pennsylvania’s Bureau of Revision of Taxes, there are currently 348,000 owner-occupied homes. Of those, approximately 8,100 homes are or have been listed as foreclosures with the past year.
The abandonment of properties leads to blighted areas of which there are already 80,000 vacant lots or abandoned buildings in this city. Without changes in our tax policy, this cycle will continue its downward spiral.
To reside in Philadelphia means paying a flat and regressive wage tax, a punitive 8% sales tax on many essential items, and then, homeowners must meet a mortgage obligation in a city with a property tax policy that penalizes the homeowner for maintaining their home.
On February 2, 2010, the Sheriff’s Office of Philadelphia will put almost 1,350 parcels up for sale. Remember, blighted neighborhoods are a spontaneous outcome yet they are also an outcome of political and economic institutions not taking the action necessary to enact a land tax policy that would deter such outcomes.
Land value tax/AXI is a remedy - With a simple shift in rates to a heaver tax on land values, in the first year, one actual homeowner facing foreclosure could save 10% on their annual tax bill. A further shift would reduce it to more than 25% a year (to $2,000). That puts the taxes as part of the arrears down to about 6.8% resulting in less forced property abandonment. Enactment of AXI would mean that a family facing eviction (foreclosure) would see their property taxes plunge from $2,400 a year to about $1,000. That can make all the difference to those that strive to improve their family’s lot in life.
