Investigation: City’s Tax Delinquency Problem Way Worse Than We Thought

Except for Detroit, no city in America is more inept at collecting its property taxes than Philadelphia. A mega-investigation by the Inquirer and Plan Philly has found that the city’s delinquency problem is nothing short of disastrous.

It depresses the overall tax base by at least $9.5 billion, saps an average of 22.8 percent of the market value of all single-family homes in Philadelphia, and deprives City Hall and the cash-strapped School District of $298 million a year.

The multi-part series, led by Philadelphia magazine writer-at-large Patrick Kerkstra, kicked off Sunday with a piece on what abandoned, delinquent homes and parcels hurt neighboring property values, how much delinquents sap municipal resources, and why the city’s been so bad at collecting taxes. On that last point, Kerkstra points out that a 1992 law requires Philadelphia to “proceed on tax claims after one year of delinquency, unless the owner or an interested party enters into a payment agreement.” Given the thousands of property owners who don’t pay taxes, Philadelphia clearly hasn’t followed that law.

Today’s entry focuses on the property owners–many of whom are AWOL and not based in Philly–who profit from the arrangement.

Of the roughly 100,000 tax-delinquent properties in Philadelphia, at least 57,500 are owned by investors, not occupants. These are parcels deeded to suburbanites and Floridians, developers and Brooklyn-based holding companies, small-time local speculators and real estate tycoons with dozens of properties to their name.

Check out the whole series here. It’s an eye-opener. [Inquirer/Plan Philly]