Cap Philly’s 10-year tax abatement
Philadelphia Inquirer
Ira Goldstein and Emily Dowdall
The Inquirer recently published a story by Caitlin McCabe about a set of 10 new townhomes at South Broad and Fitzwater Streets expected to be completed late this summer. Reportedly, they will sell for around $2 million per unit. These units, as they are new construction, will receive a substantial financial benefit because they won't be subject to full real-estate property tax for 10 years.
Philadelphia's 10-year tax abatement is fundamentally a tax expenditure: not the benign concept of "money we never had" but more like writing a check from the city to the developers or buyers of new or substantially rehabilitated properties. Extreme cases such as abating $2 million townhouses prompt us to ask: Is this a wise expenditure for the city or school district?
