More from the neighborhoods conference, thanks again to Catherine Lucey: Michael Nutter says he wants to help Philly weather the sub-prime real estate crises.
The Democratic mayoral candidate said today at the PhillyBlocks conference that he wants to meet with Philadelphia banking CEOs to talk about how the city can help people keep their houses.
“It’s not in the city’s interest to have thousands of people thrown out of their homes,” Nutter said. “If we bring our bankers together, I know they care about Philadelphia and don’t want tragic results.”
Nutter said he needed more information before he could say what form a solution might take.
Over the past year the US has seen a sharp rise in foreclosures on sub-prime mortgages – loans given to people with weak credit histories. The crisis peaked this summer, threatening the overall economy.
Comments (36)
Nutter shouldn't have made any politicking statements on foreclosures especially when folks will be out of homes before he takes office and the fact banking CEO's know not their bounds even Nutter doesn't understand the crisis.
During lunch Mike should have stood by the information tables and tried to look the intelligent " Merchant Of Endowment " , shook hands and gave out recycled info on how to vote and inform participants how sorry he was they couldn't get a grub.
Posted by Jasper Zeigler Jr | September 14, 2007 3:04 PM
Nutter already has a more intelligent grasp of the pros and cons of foreclosure for any lien whether tax or mortgage.
We need to foreclose for water and gas liens also. Just to get PGW a buyer, we need to foreclose on any property with a gas lien of over $2000.00 dollars. There are too many now that any builder would love to bid on.
Mortgage foreclosure, right now, is the most effective collection arm of the city for any lien debt. It's more effective than the city itself.
Without bad credit loan foreclosure, we would not have the property tax collection revenues or water and gas payment we do. Bad credit loans are the best thing to happen to city utilities.
All those old debts are paid off at closing. It comes out of the remainder of what the forced seller gets.
The SHERIFF is the only way about 25% of the owners in the city ever pay in full their soft collection debts.
The only way the city can pay for schools is to have people pony up the property taxes. Some neighborhoods report 50% of all owned property as delinquent, most of it for several years. That's a low interest loan against schools, police, and infrastructure. Nutter knows this.
Quite a few people behind on the mortgage because they have bad credit are the same people behind on the property taxes, water bill, gas bill, and the other soft collection debts. Nutter knows this too.
Mortgage foreclosure pays all those debts at the time of closing on the sheriff sale of the house.
Street's informal abolition of property tax collection by the city doomed schools. He had to resurrect it. He only did so when he wasn't running for election -- Street had no confidence he could win the middle and upper class vote.
Long in dusty history are the days when the property won't fetch the lien amounts.
Nutter has a hugely unbalanced budget to pay down from Street and Council, and the political will from Council to do that is weak.
Witness the struggle to collect the pittance offered so far out of the $588 million in overdue Philly property taxes owed to the city and school district.
Wow, we're going to collect, what $42 million for schools from overdue taxes? Are you kidding me? That is less than 1% of what is owed the city for years.
Not all of those debts are the "poor" either, though pols locally want you to think so. One is the RDA, with thousands of vacant properties deep in debt, one is failed "affordable housing" ventures, such as by Universal Companies and "record mogul" Kenny Gamble (Uni-Penn IV alone is a top 100 property tax delinquent). Funny the papers never seem to cover the failed ventures of these politically generous affordable housing builders.
Another is PHA, which has built property recently that is owned by a taxable owner, but those taxable owners are not paying up. All the tiny neighborhood volunteer groups trying and failing to be Habitat for Humanity got property, but the RDA rarely takes back property after what they gave is never built upon. 17th and Carpenter is one example. The Odunde Senior Village is a tiny project on million dollar property that could house about 15 seniors OR be sold to pay the liens and put the property in the hands of cash paying owners who are prompt and responsible, and eager to pay a market tax rate.
That's why NYC=Zero vacant lots and Philly=20,000 vacant lots. Politics keeps government overseen real estate out of the marketplace, and out of the tax revenue stream the city needs.
Plus there are all the out of state owners who don't pay, the spurrious non profits and religious groups, all these need to furnish updated proof that they are not eligible for property taxation or pay the cost of their footprint to the city they love.
See Hallwatch.org and click on Delinquents and Statistics for yourself.
The bottom line for Nutter: he has to pay off the huge debts from Street to even start to borrow money at a reasonable rate. The city is the first bad credit borrower he has to help. Next, schools, PGW, PWD.
Building the tax base is critical. That means more owners who pay in today dollars in full. Less long fallow property owned by government and deadbeats. All those properties along the R7 to Trenton -- not abandoned, no. The city or the RDA holds them, or some "authority" of government bureaucrats waiting for a leader to tell them what to do.
The city owns property, thousands, literally, that are not but could pay property taxes. All of the battered, tattered, and yes, drug and ETOH infested scattered site PHA housing that pays no taxes and is never maintained HAS to be sold so PHA can build new prize winning structures for the truly needy -- Philly's disabled and elderly. We have much too little senior-only PHA housing.
Reality Check: Cities are more expensive to live in. If Philly can't be tough enough to make the hard decisions needed to be self-sufficient, then the state should take over all property tax collections a la the Parking Authority -- now a money maker once it got out of city hands.
Banks have strict collection laws, and far from easing them, the city and Nutter will benefit in reduced costs and increased property tax revenue, water and gas lien payoff AFTER the prompt sale of the property at collection.
You can't save everyone. Nutter is pragmatic enough to understand that. A campaign of civic responsibility is critical, because owners in this town think they don't have to pay their bills.
I prefer top education for kids, safe streets, and truly diverse healthy neighborhoods to letting long time deadbeat owners off the hook.
Heard of renting, Philly?
Posted by EarlyRiser | September 16, 2007 5:47 AM
NYC did this. Housing Authorities had to build, use, or maintain, or sell excess capacity to the private market by a hard deadline. The result was win-win.
Look at some of your local Philly scattered site PHA housing. Equity killing on most blocks. That kills property tax revenue potential. (Translation: HURTS SCHOOLS!!)
Posted by Cities can't be the only housing option for the poor | September 16, 2007 5:55 AM
Interestingly, the website for the 10,000 men to volunteer to patrol the city and its host site, the Million Man March (www.philammm.com/) or the Millions More Movement, which is a Nation of Islam political organizing push, even lists a poll that only has three choices for what needs most to be addressed:
1. Violence
2. Economics
3. Education
Most picked Violence as tops, and you notice, not on the list was "Housing."
Is foreclosure even a local issue that a mayor has to address, or is there always going to be flux in housing markets that benefit cities?
Posted by Anonymous | September 16, 2007 6:14 AM
Nutter can't afford to appear to be another "Merchant of Endowment."
Posted by Anonymous | September 16, 2007 6:16 AM
If Nutter can't get the city to collect overdue property taxes up to what the surrounding counties do percentage-wise, he should cut his losses and quietly broker Perzel to officiate Philly city tax collection and referral of properties to the Sheriff for foreclosure auction.
He'll look like a genius for decreasing crime, costs, and increasing tax revenue.
Or just let Linebarger have the more of the city tax debt to collect. So, not just every property that owes taxes for more than four years, but say more than one or two.
That's what every other municipality uses as a cut off for foreclosure on taxes.
It was the federal government policy of the 70s that made cities the dumping ground for the poor. It only benefits low income persons to move out of the city for better schools, opportunity, jobs, and safety!
Posted by Anonymous | September 16, 2007 6:23 AM
Nutter's own loyal party members are some of the worst offenders. One of the perks of being active and fliering or getting signatures is optional property tax collection.
I know a Dem party activist on my block -- she owns two houses, both in tony areas, and one owes like $20,000 in overdue taxes!! Come on!
Collect already.
Can the Revenue Dept. and Law Dept. even do the job, as corrupted as they have become under the Street administration about turning revenue into free money as long as Street's in office for party hacks?
Corruption legislation that prevents quid pro quo will do much to improve city revenue. Where's the teeth?
Posted by Anonymous | September 16, 2007 6:28 AM
Where can you report stuff like this anonymously and expect the right office to do something about it for real?
Posted by Anonymous | September 16, 2007 6:30 AM
Nutter will hire folks who graduated from Wharton and not U. of Graterford.
Posted by Anonymous | September 16, 2007 6:31 AM
Bad Credit Loan foreclosures are not the only foreclosures going on either. The city is collecting overdue property taxes. People need to get in a payment plan, and stay in it, or the house will go to the same place the unpaid mortgage goes: Mr. Sheriff's auction.
Here's what zips owe the most: Not all the poorest either.
19132 North Philadephia West 53.7% (owners delinquent on property taxes)
19133 North Philadelphia East 48.1%
19140 Nicetown 47.8%
19121 Fairmount North 45.6%
19143 Kingsessing 44.4%
19139 West Market 44.3%
19104 West Philadelphia 39.7%
19131 West Park 39.3%
19122 Spring Garden North 38.8%
19138 Germantown East 38.7%
19141 Logan 38.2%
19144 Germantown 37.5%
19146 Schuylkill 34.1%
19134 Richmond 31.1%
19142 Paschall 30.3%
19125 Kensington 30.2%
19126 East Oak Lane 30.2%
19150 West Oak Lane 28.5%
19151 Overbrook 25.6%
From a FOIA request that is updated monthly:
www.hallwatch.org/proptax/about/redelinq/stats/delinqbyzip/index_html?skey=pcent&rkey=pcent
What gives with this city that owners don't pay their bills at such unsustainable rates?
Posted by www.hallwatch.org/proptax/about/redelinq/stats/delinqbyzip/index_html?skey=pcent&rkey=pcent | September 16, 2007 6:49 AM
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