Tax hike proposed for ‘flipped’ homes

Some residents want an anti-speculation tax bill for sales of fixed-up area properties.

During the past 15 years, many of North Philadelphia’s longtime residents have been forced to leave their homes because of rising property rates. Now, The Philadelphia Coalition for Affordable Communities wants the city to take action – specifically, through a proposal in its recently published report, “Development Without Displacement.”

The report’s suggested solution is an “anti-speculation fee” – a provision that would penalize developers for buying properties, fixing them up and “flipping” them for profit. The fee would collect $12 million for the Philadelphia Housing Trust Fund, and could be allocated toward more affordable housing units and critical repairs for current property owners.

The fee would be implemented as a 1.5 percent increase on the city’s Realty Transfer Tax, and only apply to properties that are sold more than once in a two-year period.

According to the report, the median gross property rental rate for selected neighborhoods in the region – including areas around Temple – increased 27 percent from 2000-12. During the same period, median household income dropped 6 percent.

Regarding the issue of gentrification and North Philadelphians being displaced out of their homes, Nora Lichtash, a principal member of the coalition and a Germantown resident, said the association doesn’t blame government, landowners or universities – it just wants the issue resolved.

“We are not ascribing blame toward the university or any neighborhood,” Lichtash, a Temple alumna, said. “But the degree to which institutions and

degree to which institutions and neighborhoods notice this is occurring, it’s their job to try and figure out how to not push long-term residents and institutions out [of the area].”

Lichtash added that she believes Temple has its own responsibilities when it comes to its surrounding neighborhoods.

“I think institutions have a responsibility to be responsive to their community,” she said. “And their community is not just students, the community is where Temple has been for all these years.”

David Bartelt, a professor emeritus in Temple’s Geography and Urban Studies department, said one of the reasons the university’s surrounding community has been gentrified is because of the growing population of students living in the area.

“Temple has been very supportive of developers who want to develop student housing that fits this new profile of the neighborhood,” Bartelt said. “Temple has pushed very actively for more of a campus experience … and that’s been a fairly long-term effort.”

Bartelt added that one aspect that differentiates the issue in West Philadelphia and North Philadelphia is that Temple cannot directly develop its surrounding area like the University of Pennsylvania and Drexel University.

He also said the process could be halted by state laws, even if the city passes legislation for the new tax.

“I’m pretty sure it will be up for a constitutional challenge in the Commonwealth of Pennsylvania,” he said. “We’ve been down this road with other kinds of approaches in the past, and it has failed the constitutional mandate that all taxes and fees must be equally applied to every property.”

Bartelt added that even if the bill passes through the state, it wouldn’t be fully implemented for two to three years because of how complex the issue is.

So far, Lichtash said the coalition’s proposal has gained interest from City Council, but the specifics of the bill still need to be worked out, as it is currently being drafted. She added that the coalition hopes that something is drafted within the next year.

She said if the anti-speculation tax bill were implemented, the allocation of the new revenue for the city’s Housing Trust Fund would be determined through an application process.

“If there are developers ready and willing to do affordable housing in North Philly, they would apply for that money,” Lichtash said. “They don’t just hand it out, there has to be someone with a capacity to do the work.”

Lichtash said she hopes the legislation passes, given her involvement with Temple and its surrounding neighborhoods. She graduated from the university in 1975 with a bachelor’s degree in biology, and added a master’s degree in social work in 1979.

“Everyone in my family goes to Temple, it’s a really good school,” she said. “We all love Temple, but the truth is that it has responsibility to the neighborhood, and we really want to see it step up and do that.”

Steve Bohnel can be reached at or on Twitter @Steve_Bohnel.

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