Wednesday, April 29, 2009

Tax Break for Affordability

In Philadelphia, City Council is debating the fate of the city's ten-year property tax abatement on new and rehabbed construction. Other cities, most notably New York, have already dealt with this issue: what happens when a tax break program becomes successful?

Philly's City Council is considering a bill that would require LEED platinum certification for developments to receive the full abatement, with fewer years of abatement with lower levels of LEED certification. While Council's focus on energy efficiency is admirable, this is the wrong approach.

Check out my op-ed in the Philadelphia Inquirer today where I argue for turning the abatement into an incentive for affordable housing development, instead. As I argue in the paper, the problem of a successful tax abatement program is that it ends up benefiting wealthier homebuyers most. Requiring LEED certification will only exacerbate the problem. Using the abatement to encourage affordable development, however, allows the abatement to benefit a wider spectrum of the city's population.

Please read my more complete argument in the op-ed, and as always, I would love to hear your comments.


Andre Machari Zachery said...

Dear Greg,
I carefully read your argument on using city funds for development of mixed-use lower income housing instead of focusing on green development. While there is a need for better housing for people in lower and middle social-economic bracets, ignoring LEED development is not the answer. The city is right to begin to require green development.
I am a 27 year old dancer/choreographer/artist. My wife is as well. We are both college graduates and are part of the lower economic bracet of America. While having the opportunity to own a home may be nice, it is not a necessity. The American Dream must be re-evaluated about home ownership. Owning a home takes an incredible amount of work and income. We do not have the time, desire, or monetary funds to do this even if there were "affordable" homes. It should make no difference how much the home cost if it is well built and SUSTAINABLE. The present economic crisis is evidence that we cannot ignore sustainable living.
In reading your op-ED, it seems you believe that LEED development is to expensive for lower income development. But replacing that with cheap un-sustainable development for the masses is worse. Lower-middle income population is the larger population. We are the people that need green development and sustainable living the most!
You are looking at fixing this problem with dollars & cents. We are beyond that now. This is about lifestyle change. Not everyone needs to own a home. If you do, then we ALL need LEED sustainable living.

Taggart said...

This was my comment on the op-ed at

I like the idea of having the abatement program work for LEED and affordable housing. How about this? 15 years for Leed Platinum and 20% affordable, 10 years for Gold and 15%, 7 years for Silver and 10%, etc. Worse or better idea? Also, with respect to the reasoning that there are enough afforable homes in Philly, as Greg pointed out, they are all in poor run down neighborhoods. Studies have shown that the best way to lift people up out of the lowest class is to mix them with middle and high classes; forcing them to live together in ghettos only reinforces their poverty. If you are worried that mixed income houses might bring down your property values, and drive out wealthier neighbors, this study by MIT disproved that worry for Boston: