On Friday, we took a close look at Governing’s “Gentrification in America” report as well as Citified’s “Insane Surge in Philadelphia Gentrification” response. We discovered the numbers and conclusions don’t stand up to scrutiny and then argued that the greater problem in Philadelphia is the condition of many of the city's low-income neighborhoods, where poverty is increasing and population is decreasing. Today we discuss how our platform can help lead to stabilization and even economic growth in the city's low-income areas.
First, let's go back and quickly retrace the connection we're making between gentrification and low-income neighborhoods. The phenomenon of gentrification often receives attention because of links – real or perceived – to displacement. While some neighborhoods have changed faster than others, to date, there is little evidence to suggest that gentrification has caused displacement in Philadelphia. What we’re seeing in Philadelphia's gentrifying neighborhoods is more of a gradual process, which can largely be good for existing residents. Quite a few neighborhoods – Francisville comes to mind – had had so much vacant land that the change in recent years can more accurately be described as the repopulation of a largely abandoned area.
We don’t pretend to have a secret formula that will magically fix the challenging and often related problems surrounding poverty, blight, disinvestment, and abandonment. But we do believe that much of our platform can begin to stabilize low-income communities where disinvestment and abandonment are taking place. Let’s begin.
COMPLETE ALL NEIGHBORHOOD REMAPPING BY 2019
This all starts with remapping. Philadelphia completed a years-long overhaul of its outdated and confusing zoning code in 2012. It was an enormous achievement, to be sure, but the second half of the puzzle remains: the Philadelphia City Planning Commission (PCPC) must now update the city’s zoning map to balance the new code with contemporary demands for land. PCPC does this by working with district councilpersons and community groups to determine a vision for each district’s land-use. This process has been very slow-moving. That’s not good for Philadelphia, least of all for its low-income neighborhoods.
To see why, let’s use the easy example of industrial zoning. Fifty years ago it made sense to zone vast swaths of North Philadelphia for industrial use. This was, after all, a city of heavy industry. But today? This zoning designation remains in place in far too many areas where there is no realistic opportunity to regain a heavy industrial presence. The zoning designation prohibits other uses of the land, which discourages investment, often results in vacant and blighted properties, and drags down the surrounding community, taking property values and tax revenues and school funding down with it.
As you can see in this segment of the zoning map below, much of North Philadelphia and the lower Northeast are still zoned industrial (purple):
While some parts of the city have already been remapped, others have not yet begun. PCPC has estimated that it needs an extra $1.1 million annually, which would restore the commission’s budget to pre-2008 funding levels, in order to complete the remapping process within three years.
INCREASE LAND VALUE TAX, DECREASE BUSINESS & WAGE TAXES
Stop us if you’ve heard this before – Philadelphia’s tax structure is backwards. Let’s look at the wage tax. At 3.92% of income for city residents and 3.4915% of income for non-residents, it’s the highest such tax in the country. This isn’t exactly a category we want to finish first in. But why is it so bad?
To start, the wage tax is highly regressive. Yes, on paper the tax itself is flat, but it hits low-income workers much harder than everyone else. Why? Because for those working closer to the low end of the pay scale, this tax cuts directly into earnings that would otherwise be spent on necessities like food, clothing, and shelter, not to mention transportation and utilities. As one moves up the pay scale, however, the wage tax cuts into discretionary spending; a middle-income worker still has enough take-home pay to cover basic needs.
For years, the wage tax was gradually being cut. Between 1996 and 2010, the City reduced the wage tax by an average annual rate of 1.77% for residents and 1.59% for non-residents. In that span, total wage tax revenues increased at a rate that outpaced inflation, that is, until the Great Recession. If the City were to resume cuts at that same pace over a 10-year timeline, we'd have wage tax rates down to 3.28% for residents and 2.98% for non-residents by 2025. Given that the City already anticipates wage tax revenues to grow by at least 3% through FY 2017, it's possible that resuming cuts would further increase wage tax revenues or, at a minimum, keep wage tax revenues in pace with inflation. Wage tax reductions were suspended in 2010 and finally resumed last year, but only nominally (this year's reduction saves $1 for someone earning $25,000 a year). It’s time to really start cutting the wage tax again.
The wage tax also discourages employers from locating in the city. This suppresses the number of job opportunities for residents and reinforces the reverse-commute phenomenon we have now. Just take a look the above chart from the Center City District to grasp the magnitude of the employment opportunities our city is hemorrhaging. Perhaps not surprisingly, this lingering suburban orientation to our regional employment distribution gets plenty of attention for higher paying jobs - and it’s absolutely true that Philadelphia needs to attract these jobs - but not much attention gets paid to the impact this regional employment distribution has had on the lower end of the pay scale.
Having to commute an hour each way for a $75,000 salary is bad enough; having to commute an hour each way for $10 an hour is quite another. (In fact, SEPTA’s King of Prussia rail extension is largely influenced by the lack of transportation options for Philadelphia’s wage earners who currently put up with ungodly bus commutes to work at the mall.)
But if we cut the wage tax, which accounts for roughly one-third of all City revenues, how do we balance the budget? You may have heard that Philadelphia’s property taxes are much lower than those in comparable cities. In fact, property tax revenues in Philadelphia account for only 17% of all revenues.
The property tax has two parts: a tax on the land and a tax on the structure. The land portion of this tax is especially low, which does nothing to discourage speculators from buying up land and waiting years, even decades, to flip. This type of speculation results in virtually no tax revenues for the City and the struggling school district, and it also has the effect of discouraging investment in the surrounding area, which then also reduces tax revenues to the city and school district. It’s a downward cycle.
Increasing the property tax, particularly the land portion of the tax, can help offset reductions in the wage tax and rebalance the City’s sources of revenue. In so doing, it will also reduce harmful land speculation and lessen the short-term burden that the tax abatement places on the school district.
CITY-WIDE SYSTEM OF PROTECTED BIKE LANE ARTERIALS
In Philadelphia, the loudest bicycle advocates tend to be relatively well-off residents of Center City and surrounding neighborhoods. At least it seems that way. It’s impossible to tell, really, but the perception is that investment in bicycle infrastructure is something that will only benefit this relatively small slice of the city. In fact, quite the opposite is true. Creating a network of protected bike lanes (PBLs) will have the greatest impact on those beyond Center City who haven’t yet taken to transportation on two wheels.
According to the Center City District (CCD) nearly half of all jobs in Center City are held by people who live outside of the area bound by Girard Ave., Tasker St., and the Delaware and Schuylkill Rivers. While some of these workers are already commuting by bicycle, many are driving or taking SEPTA. Driving is expensive and even SEPTA costs roughly $1,100 each year in monthly SEPTA TransPasses. Riding a bicycle, however, is virtually free. And while we love SEPTA, the buses don’t exactly provide the most reliable way to get to work on time, day after day.
But realistically, would people ride bicycles as an alternative to SEPTA or driving? To answer that, it helps to know whether riding is a convenient alternative to other modes. It’s obviously less expensive, but is it fast enough? Could someone get from, say, 58th and Kingsessing to her job in Center City faster than she could get there by driving or taking the bus? As a matter of fact, yes she can.
You Are Here, the source of the map above, is a project of MIT Media Lab. It shows the fastest mode of transport from one census tract to another. According to the project’s website:
This map visualizes the fastest mode of transportation from each point in the city to every other point in the city. Diverse modes of transit affect the efficiency of how a city works, and the reach of many of its citizens. We hope that these maps help shed light on the way accessibility shapes one's experience of the city, and the need to plan our streets for multiple uses.
The bicycle comes out looking pretty good as an efficient mode of transport to many of Philadelphia’s employment nodes. Take a look at University City:
Or Temple’s medical campus:
Investing in a citywide network of PBLs can help save workers more than $1,000 annually. Think about that. An extra $1,000 each year for anyone who chooses to commute by bicycle. We’ll have more in coming weeks about which arterials are prime candidates for PBLs, as well as what form PBLs can take and how much they cost on average.
ADOPT AN AGGRESSIVE VISION ZERO PLAN
Last year, PlanPhilly’s Jon Geeting reported on the high number of pedestrian-related crashes in Philadelphia (full disclosure: Jon Geeting is a policy advisor to The 5th Square). According to PennDOT crash data, there were 9,051 pedestrian-related crashes in the city between 2008 and 2012. Of these crashes, 376 resulted in major injuries and 158 were fatal.
But of those 158 fatal crashes, only 16 were in Center City:
Here is Geeting's take on the data in PlanPhilly:
The most likely reason Center City has a smaller share of pedestrian deaths than lower-income neighborhoods, despite being a huge pedestrian crash hot spot, is that operating speeds are lower. The combination of narrow lanes, dense pedestrian foot traffic, cobblestones, and bike lanes and curb bumpouts all slow cars down… The odds that a pedestrian will die from a car collision go up dramatically from 5% at 20 mph to 45% at 30 mph.
Geeting then looked at the same issue from a slightly different angle for Next City and produced a list of the ten worst streets for pedestrian crashes. Only two are in Center City (by comparison, North Philadelphia has five, West Philadelphia has two, and South Philadelphia has one). A high frequency of traffic collisions on a given street is often a function of poor design, and there are many basic ways to address that problem. But for now, let's go back to our proposal for a citywide network of PBLs on arterial streets. Not only do they provide a safe, efficient, and affordable means of transport for low-income workers, they also narrow the roadway, which has the effect of reducing speeds and, thereby, collisions. Two birds, one stone.
TRIPLE OUR PARKS & GREEN SPACE FUNDING
Investment in our parks and public spaces has a remarkable ability to leverage private investment and make surrounding areas more desirable places to live. Take a look at Schuylkill Banks, which is helping to fuel development on the western edge of Center City, or Race Street Pier and the other new riverfront parks that are doing the same on the eastern edge. What often gets lost in the conversation, however, is that this pattern isn’t limited to Center City. Here we would like to highlight one element of our parks and public space platform that is extremely effective in many neighborhoods beyond Center City.
The Pennsylvania Horticultural Society (PHS) runs a terrific and underappreciated program called Land Care in coordination with the City of Philadelphia. According to a 2013 Next City article about the program, author Christine Fisher had this to say about Land Care:
Each year the City of Philadelphia spends about $2.5 million on the Land Care Program. With that money, the city contracts PHS to "clean and green" strategically selected vacant parcels in distressed communities. At each parcel, PHS removes trash, brings in new topsoil, adds a posted rail fence and plants trees along the perimeter. PHS then contracts seasonal maintenance crews.
Once these vacant lots are reborn, many become informal community spaces; they are often used for child play, barbecues, or dog walking, among other things. Fisher goes on to highlight a few of the economic development implications of Land Care:
Of all the lots PHS has cleaned and greened, 850 have been developed for residential or commercial use, and for every dollar invested in this program, PHS claims a $214 increase in house wealth across the city.
And the PHS website has still more highlights from its stellar program:
After a vacant lot is cleaned and greened, the values of nearby homes jump by nearly 20 percent. Whereas before they were worth 16 percent less than comparable homes, they now command a premium of 2-5 percent.
The benefits increase over time. While the initial jump is immediate, when those cleaned and greened lots are maintained, nearby homes continue to appreciate at an additional 0.5 percent every year.
The benefits increase with more greened lots. After the initial benefits of a cleaned-up lot, each additional cleaned and greened lot adds another 1 percent of value to homes within a quarter mile.
And we haven’t even gone into the reductions in violent crime associated with Land Care investments. As for the makeup of the neighborhoods that benefit from this program, they're largely low-income and, again, well outside of Center City. And that makes sense, since that is where most of the city's 40,000+ vacant lots can be found. Here's a look at the roughly 27,000 vacant lots in North and West Philadelphia alone, courtesy of Grounded in Philly's interactive vacant lots map:
We’ve put a great deal of effort into creating a platform that helps sustain the growth we’ve seen in Center City and surrounding neighborhoods as well as lift up communities that have seen decades of disinvestment, all while staying within our wheelhouse of public space, built environment, and transportation advocacy.
This mix of strategies can help halt the population loss that is still taking place in many low-income neighborhoods of our city. It can stabilize communities and set them up for future growth, it can increase revenues for school funding and basic city services, it can improve access to jobs and provide freedom of transportation, and it can save lives.
Candidates for elected office often say they want to help the city. Will they commit to this platform? Stay tuned for more from us throughout the campaign cycle to see where each candidate for mayor and council stands on these and other issues.