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Land Bank of Broken Dreams

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The bureaucrat exists chiefly in service of the illusion that government is improving at all times. The illusion’s maintenance becomes critical when the absence of such makes money. Consider Philly’s Land Bank.

Land banks take vacant real estate from absentees, cadavers and speculators. They sell it to people with more purportedly civic ideas about what to do with it.

It’s a specific type of city policy that results from a specific type of political thought, which construes vacant real estate not not as a social problem, but rather the result of an inefficient market that needs a tune-up.

According to Councilwoman Maria Quiñones-Sánchez, co-author of the Land Bank’s legislation, vacant land hurts the city because it “bring[s] down the… value of both residential and commercial property.”

By this logic, property value increases equate to social good. And progress means removing things that keep property value from rising.

And so then failure or unwillingness to participate in the project of driving property values up becomes something of a treasonous act, punishable as such.

First-now-former Land Bank CEO John Carpenter explained in an interview with scholar Kasia Hart that the Land Bank makes it

easy to put property back into productive use the moment someone has a good idea, and the resources to make it happen. By doing that, if we raise property values, which then raises the tax base, which actually begins to solve the schools problem… [T]hat’s social equity on the grandest possible scale you can get.

So it then follows that people who don’t rent or own property become an impediment to social equity. Philadelphia’s Division of Housing Communications Director Paul Chrystie confirmed for this article that the Philly Land Bank will soon acquire 300 vacant parcels. Of that total, Chrystie wrote via e-mail,

about 12 may have ‘squatters’ in the traditional sense of someone living in a building that they do not own. (This is not surprising in that the vast majority of properties in public ownership are vacant land and do not have a building on them.)

Along with these 12 impending evictions in pursuit of social equity, the Land Bank’s board at a February meeting sold parcels near 27th St. and Girard Ave. to developer Jordan Brody.

Brody will build six new “workforce units,” cleared to sell for as much as $230,000 each. Several other units slated for construction are cleared to sell for whatever the market will fetch.

Ever-concerned with social equity on the grandest possible scale, Brody in 2013 sued city government over $11,240 in back-taxes he owed the school district on a church he bought near 27th & Girard Ave. and resold as condos.

Those without venture capital and a legal team get social equity too. But again, in this operating definition, that just happens to mean whatever the market would’ve done anyway.

At that same February meeting, the Land Bank’s board applauded itself for selling a side yard to a Kensington resident next to their Waterloo St. home. The resident will pay that purchase down on a 15-year, self-amortizing mortgage.

That’s where we’re at in terms of vacant land disposition policy. How far have we come?

Vestiges of a thing called the Gift Property Program, which became operational during the late 1970s, survive in Philadelphia’s Charter. Most of it has been stricken and over-written, but Philadelphia Redevelopment Authority records show it still gets used on occasion.

17th District Councilman Harry P. Jannotti created the Gift Property Program. Jannotti belonged to the Democratic Party, but acted as then-Mayor Frank Rizzo’s political cadet. And like Rizzo, he generally argued as a populist conservative.

Prospective homeowners were instructed to visit Jannotti’s office with a list of a dozen-ish vacant parcels they’d conceivably buy if they could. Council staffers would select one parcel for the interested buyers, transfer its title into their name and evoke the powers of the Mayor’s Office to expunge back-taxes owed.

Participating homeowners had one year to bring their properties up to code once the titles cleared. Jannotti arranged deals with local contractors who drew the correctly flavored political juice to do the renovations.

Historian Michael Stewart Foley reflects that the Program

was supposed to sell houses for $13 to families who pledged to rehabilitate them, but in the course of four years, Jannotti had transferred only a few hundred homes, and many of those went to his speculator cronies. While one speculator managed to secure thirty Gift Property houses, more than five thousand program applicants waited to hear something, anything in response.

Critics of the Gift Property Program like Milton Street and the Association of Community Organizations for Reform Now (ACORN) accused Jannotti of trafficking in vacant land as a “form of political patronage,” according to scholar Zane Anthony Curtis-Olsen. These critics also claimed Jannotti was using

his connections with Frank Rizzo and local developers to turn more stable vacant properties into new homes for his constituents… offering vacant properties in exchange for political favors, votes, and campaign donations. In an era of fiscal austerity, property became a new good to be doled out by cash-strapped party bosses.

News of this contempt for Jannotti’s policy by local political groups reached the federal Office of Housing and Urban Development in 1979. In 1980, the FBI indicted Jannotti on semi-related charges of conspiracy to violate the Racketeer Influenced and Corrupt Organizations statute.

Jannotti became the first of many politicians caught in the FBI’s Abscam operation. According to the case file, the former Councilman agreed to take $10,000 in cash from FBI agent Michael Wald, who posed as the representative of a fake Middle Eastern developer with interest in building a luxury hotel in Kensington.

Wald recorded audio of his exchanges with Jannotti. The following passage was transcribed from one of those recordings:

JANNOTTI: As long as it’s, long as it’s a legitimate, legitimate operation. Ya know, any legitimate operation we will fight for because, ah, ya know why shouldn’t we fight for a legitimate operation? If the operation is legitimate, it’s going to bring a tax base into the City of Philadelphia, it’s going to bring employment into the City of Philadelphia, ah, this is, this is basically our job… to try to get as much money into the City of Philadelphia and as many jobs into the City of Philadelphia as we possibly can.

It’s this argument that Carpenter and Quiñones-Sánchez and their ilk have labored so diligently to preserve for three decades since. There’s a hellish Groundhog Day dimension to it all.

FBI agents questioned Philly city government’s vacant land disposition policies again in October of 2015, according to statements former Land Bank CEO Tania Nikolic made in a legal deposition. It’s unlikely, however, that these more recent inquiries will produce an indictment under the presidential administration of a career real estate broker.

But relevant to the main argument in this article, capital actively resists attempts to change procedure. The more recent push to create a land bank in Philly began not as another addition to an existing battery of market stimulus plans, but rather the precise opposite.

The Campaign to Take Back Vacant Land, a coalition of labor unions, religious organizations and advocacy outfits, began the push for a land bank in Philly. The Campaign in a 2011 report argued such a policy would “ensur[e] the land and buildings contribute to the community and remain affordable for neighborhood residents.”

Originally, the Campaign wanted the Land Bank to clear titles on vacant real estate and then hand some percentage of them off for management by a community land trust (CLT).

The CLT would sign residents in on long-term lease agreements at properties acquired through the program. According to the Campaign’s 2011 report, such leases require that residents

resell their properties to the land trust or to another low-to-moderate-income household or businesses if they move… [Such agreements] provide[s] the occupant with a fair return on their investment if they decide to sell, while preserving the affordability of the property.

The planning literature would only acknowledge a city government-affiliated CLT as a possibility on the condition that the it managed a garden, not residences. Ultimately, no new CLT’s at all were created in conjunction with the proposal.

A second group with a similar name, the Philadelphia Land Bank Alliance, joined the lobbying effort mid-stride. The Alliance shared some members with the Campaign to Take Back Vacant Land.

But the Alliance claimed a smaller, more professionally elite membership: mostly law, real estate and architecture firms and related industry interests. We matched the Alliance and the Campaign’s membership lists to tax filings non-profit firms file annually with the Internal Revenue Service.

The forms show that the Alliance brought a lopsidedly large amount of cash to the effort. The Campaign held around $75 million. The Alliance held around $525 million. Both figures are likely understated as we couldn’t get filings for all groups named.

After intervention by this wealthier and more professional Philadelphia Land Bank Alliance, the explanation of why Philly needs a land bank in the first place was completely reversed. In the beginning, it was an attempt to create more affordable housing. It passed into law as a fix for a housing stock that had become too affordable.

References

Board of the Philadelphia Land Bank. “Board of Directors Meeting, February 9 Agenda Package.” 2017.

Common Pleas Court of Philadelphia County. 2701 Girard Avenue LLC v. School District of Philadelphia. Case ID: 130701116. 2013.

Curtis-Olsen, Zane Anthony. Reclaiming the ‘City of Homes’: Squatting and Housing Protest in Philadelphia, 1964-1996. 2015.

Campaign to Take Back Vacant Land. “Put Abandoned Land in Our Hands.” <http://takebackvacantland.org/?page_id=5>. 2011.

Hart, Kasia. Reclaiming Philly’s Vacant Properties: An Assessment of Community Discourse in the Formation of the Philadelphia Land Bank. 2015.

Philadelphia Chamber of Commerce. “Councilwoman Maria Quinones Sanchez Discusses Need for Land Bank Legislation.” 2012.

Philadelphia Land Bank Board of Directors. “Philadelphia Land Bank: Year One Strategic Plan.” <http://www.philadelphialandbank.org/about/strategic-plan/>. 2015.

Foley, Michael S. Front Porch Politics: The Forgotten Heyday of American Activism in the 1970s and 1980s. 2014.

US Office of Housing and Urban Development. “Final Report: Affirmative Fair Housing Techniques Demonstration.” <https://www.huduser.gov/portal/Publications/pdf/HUD{efbe89ac704780203cd8426464b2ff3c3d399a57d2515d4f2e4b83e7728fbf2c}20-{efbe89ac704780203cd8426464b2ff3c3d399a57d2515d4f2e4b83e7728fbf2c}206034.pdf>. 1979.

Gershman, Bennett L. “Abscam, the Judiciary, and the Ethics of Entrapment.” The Yale Law Journal. 1982. <www.jstor.org/stable/795998>

City of Philadelphia. “Philadelphia Land Bank Strategic Planning and Analysis Request for Proposals.” 2014.

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