Blighted properties – structures or lots in dilapidated, unsafe, and unsightly condition – are always cause for local concern. Run-down and vacant properties undermine real estate values, cost municipalities money to maintain and/or demolish, and erode the local tax base because tax delinquency often associated with such properties leads to further abandonment. Addressing the issue is especially challenging in neighborhoods that lack resources.
In Pittsburgh, the problem is familiar. Many river towns and small communities are still struggling from loss of industries, disinvestment, high unemployment, and crippled economies. Pittsburgh alone is home to more than 30,500 vacant and distressed properties, with structures resulting in $266 million in lost property revenue. It puts a serious drain on local coffers. According to a 2017 report by the Center for Community Progress, Pittsburgh spends nearly $2 million per year to provide code enforcement, police, and fire services to vacant properties. To pay for these services, municipalities rely primarily on property taxes. And many of these neighborhoods’ tax bases are already suffering significantly.
As a board member for both the Pittsburgh Land Bank (PLB) and Habitat for Humanity of Greater Pittsburgh, I’ve come to understand what a successful policy for addressing this problem looks like. Habitat’s mission in Pittsburgh is, simply, to provide affordable housing – built by volunteers and homeowners, without government aid – for families committed to the ideals of the program’s ministry. Each Habitat division is responsible for raising the money to support the local project, and each recipient is responsible not only for helping build or restore the dwelling but also for completing financial-counseling classes. The Pittsburgh Habitat for Humanity division has built or rehabilitated 103 homes and repaired another 114 homes.
Pittsburgh created the PLB in 2014 to streamline and expedite the process for purchasing city-owned properties. The land bank is charged with distributing properties to approved buyers – individuals, community groups, developers, or other entities – who demonstrate that they’ll repurpose them for productive use. Unfortunately, the PLB has not been as successful in achieving its intended goals.
In my view, it all comes down to resources and leadership with community involvement. Habitat for Humanity of Greater Pittsburgh is a perfect example of putting these two critical elements to work. Habitat acquires land and buildings through donations, which is a relatively clear and simple process to acquire properties for their projects. Also, Habitat is financed completely through fundraising and donations made to the organization’s ReStore shop, which sells new and used appliances, furniture, building materials, and home décor at greatly reduced prices.
By contrast, the Pittsburgh Land Bank has no recurring or ongoing source of funding and runs on one-time infusions of monies and grants, when available. To further complicate matters, the PLB primarily relies on the Pittsburgh Treasurer’s Sale to attain blighted and abandoned properties for their projects. Treasurer’s sales are cumbersome and don’t produce a clean and insurable title until a separate court action to quiet a title takes place. Moreover, this method of acquiring properties can take three or more years to play out, and even then, there is no guarantee that the city will own the tax-delinquent properties because anyone can bid to buy them.
Understanding that this is a major hurdle for the PLB, I introduced Senate Bill 811, which passed the Senate unanimously last month. SB811 would make applicable to the City of Pittsburgh and the surrounding municipalities and their land banks the Municipal Claims and Tax Lien Law (MCTLL). MCTLL governs the process for Sheriff Sales, a foreclosure sale on municipal claims and tax liens against a property. A Sheriff Sale, sometimes referred to as a Judicial Sale, is a more efficient and inexpensive means of acquiring property than the current Treasurer’s Sale process. Once placed into the Sheriff Sale, Pittsburgh and other municipalities could use the priority-bid process, which guarantees successful acquisition and results in an insurable title post-sale. Furthermore, SB 811 would also reduce the nine-month redemption period, which poses a serious challenge for land banks, to three months after the acknowledgment of a Sheriff’s deed.
 Though SB 811 would not solve the PLB’s problem of limited financial resources, it would help get blighted properties in and out of the land bank’s possession and back onto the city’s tax rolls in a quicker and more cost-effective manner.
Wayne Fontana is a Democratic member of the Pennsylvania State Senate, representing the Allegheny County-based 42nd Senate District.