Philadelphia's new land bank.

Kevin Gillen is a senior research fellow at the Lindy Institute for Urban Innovation at Drexel University and a consultant who has worked with the Land Bank in the past. He has long argued that the new agency must be tactical in how it dispatches the thousands of properties that it will ultimately have the responsibility of selling. Only a small fraction of Philadelphia’s vacant parcels — 10 to 15 percent — are desirable to for-profit real estate developers, he says. The other 85 percent are small lots scattered across neighborhoods outside of the city’s dense core. “Even if you gave away the land for free, a builder couldn’t sell a home that covered the cost of development,” Gillen says, speaking in his capacity as a private citizen. “Those lots work best as small community gardens, side yards or open space until the neighborhood recovers.” The high-value lots, on the other hand, should be used for “high density, multifamily mixed-used projects,” Gillen says. “To use the land bank to promote affordable housing is to bring the wrong tool to the wrong job.” Data supports Gillen’s idea. A study produced for the Land Bank by Econsult Solutions and Susan Wachter from the University of Pennsylvania Institute for Urban Research found that the agency could generate more revenue by selling the high-value lots to developers for market-rate housing that could be generated through the sheriff sales wherein the tax-delinquent property is typically sold. Not only do properties fetch better prices through the Land Bank, but the agency’s requirement that they are developed in some form within a year of sale produces both more revenue and significant cost savings for the city. This cash could then go back to the city to fund public services and the Housing Trust Fund, a public-private partnership that assists homeowners, landlords, and developers who want to build or maintain affordable properties. “I’m all for what the advocates want,” he says. “But the best place to find this [affordable] housing is to renovate and retrofit existing housing. This would be the most cost-effective way to provide affordable and workforce housing at market rates in the city.