Playing With Philadelphia’s Tax Money

Editor’s note:  Here’s another reason they call Pottstown “little Philadelphia“.   Just change out Philadelphia with Pottstown.  Same problems, just a smaller scale but equally as devastating to the residents of both communities.

Philadelphia’s decades-long neglect of property-tax collections has been a disaster for public schools, the city budget, and typical taxpaying homeowners.

But the system does have its advantages for low-rent landlords, out-of-town speculators, and anyone else interested in playing property Powerball, a game where the objective is to pile up real estate in hope of hitting a gentrification jackpot, while keeping out-of-pocket expenses – like taxes – as low as possible.

Some are big winners, such as the investor who picked up three adjacent Northern Liberties lots in 1994 for a combined $16,000, skipped paying taxes on the lots for more than a decade, and made good on the debt only after flipping the parcels for $750,000 in 2010.

Such speculative windfalls are rare, but it’s not for lack of trying.  Of the roughly 100,000 tax-delinquent properties in Philadelphia, at least 57,500 are owned by investors, not occupants. These are parcels deeded to suburbanites and Floridians, developers and Brooklyn-based holding companies, small-time local speculators and real estate tycoons with dozens of properties to their name.

Read more:

http://www.philly.com/philly/news/politics/city/20130311_Playing_with_the_city_s_tax_money.html

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