PHILADELPHIA | Highrise Development Thread X

[Boku]

Originally Posted by summersm343

Another dumb bill proposed in Philly that would eliminate the Tax Abatement, AND would levy taxes on investments, stocks, bonds, mutual funds, etc.

How unbelievably stupid do these people have to be? LOL. Right back to let's tax the wealthy and force them out of the city.

https://www.inquirer.com/news/coronavirus-preit-stock-executive-compensation-20200617.html

PREIT, owner of the former Gallery at Market East and other big malls, has gotten approval to refill its multi-million-dollar supply of stock for executive payouts, even as the company furloughed employees and received $4.5 million in coronavirus relief money.

[mcgrath618]

Originally Posted by Boku

https://www.inquirer.com/news/coronavirus-preit-stock-executive-compensation-20200617.html

Don’t see how that relates to literally anything Summers said...

[Frontst17]

It absolutely does. It’s a prime example of exactly who is benefiting from many of these tax cuts and abatements. Far from the only example and you can even ignore anything Coronavirus related. It doesn’t really matter to them if employees or communities or the city benefits, its how much money can the company keep in their pocket to appear profitable and line executives pockets. It’s being written off as business as usual but there’s significantly more transparency and been an active push against doing business that way. Phillys renaissance has been relatively organic. What’s going on in NJ scares me as far as Camden, Newark, Jersey City being buoyed by companies salivating over tax breaks. It works now but talk about a vacuum when OKC or Grand Rapids or any satellite city in Cali comes calling. Put money in existing local businesses who grow and expand with the city.

[McBane]

Two quick comments.

1. I don't think anyone is saying that Philly is on its way to becoming Detroit. But people have noticed some parallels and I don't think it's wrong to point those out. How's that old saying go? Those who do not learn history are doomed to repeat it. Remember, Detroit was a very large, powerful, and wealthy city up until the 1950's and it took many decades for it to bottom out. To say that Philly absolutely won't look like that in 50 years is foolish and frankly, irresponsible. All a city has to do is get to a point where it needs to raise taxes just to function and then you get stuck in that never-ending cycle of raising taxes and driving away your tax base until you look like Detroit, Camden, or Chester.

2. Kendra Brooks and her ilk genuinely believe that Philadelphia employers and the wealthy are some sort of ATM machine - without realizing how easily these revenue drivers can pick up and move. On the national level, I fully believe that we need to level the playing field but on the local level, these measures end up backfiring. See Detroit.

[iheartphilly]

Re: 1

Thank goodness Philly developed a diverse economy. Detroit in its glory days relied on the major US automakers for its wealth and prowess. However, over time, with the popularity of Japanese and other imported vehicles, US automakers lost it's reign and ever since, it has gone downhill.

[summersm343]

Originally Posted by Boku

https://www.inquirer.com/news/coronavirus-preit-stock-executive-compensation-20200617.html

How exactly does this relate to what I said? Is this right what they're doing? No. Do I agree with it? No.... however, my point is, if a city or municipality takes it upon themselves to start taxing investments, mutual funds, stocks, bonds, etc., it's just going to cause people to move OUT of the city and back into the burbs where they're not taxed. Do you understand that? Do you see that as a good thing to lose that wealthy tax payer?

[summersm343]

Originally Posted by Frontst17

It absolutely does. It’s a prime example of exactly who is benefiting from many of these tax cuts and abatements. Far from the only example and you can even ignore anything Coronavirus related. It doesn’t really matter to them if employees or communities or the city benefits, its how much money can the company keep in their pocket to appear profitable and line executives pockets. It’s being written off as business as usual but there’s significantly more transparency and been an active push against doing business that way. Phillys renaissance has been relatively organic. What’s going on in NJ scares me as far as Camden, Newark, Jersey City being buoyed by companies salivating over tax breaks. It works now but talk about a vacuum when OKC or Grand Rapids or any satellite city in Cali comes calling. Put money in existing local businesses who grow and expand with the city.

You're right in that what they're doing is wrong. However, if you think we can successfully fight that on the city level or municipal level, you're wrong and naive. Until something is done at the federal level to change things and even the playing field across the board, Philly will just end up shooting itself in the foot. If Philly is fighting that battle itself, it will never win. The wealthy and the big corporations will end up picking up and moving out of the city and leave the city shit-out-of-luck with no wealthy and big corporations left to tax.

I.e. Detroit. See the parallels now?

[christof]

If you expecting federal regulation on local tax policy, don't expect it anytime soon, if ever.

Even if it passes and is signed into law, I'm not sure it survives a judicial challenge.

[3rd&Brown]

Originally Posted by christof

If you expecting federal regulation on local tax policy, don't expect it anytime soon, if ever.

Even if it passes and is signed into law, I'm not sure it survives a judicial challenge.

Literally no one is saying that.

He's saying the solves are at levels higher than county/city. They're at the state level and they're at the federal level.

While they don't dictate local taxes, Federal Funding does affect local funding.

I'd argue the most important culprit (other than Philadelphia itself for its backwards tax policies) is the state. The state does not adequately fund local schools or state colleges, and thus it puts a tremendous burden on localities to raise their own taxes.

Philadelphia can't fix income inequality on its own, and it certainly can't raise taxes on miscellaneous forms of wealth and expect those people to sit tight. I'll tell you this. You start to tax stock and capital gains as a city and then literally anyone with anything will just get up and leave. Then you're in a hell of a lot more pain than you are now.

[Frontst17]

I see the parallels as in philly died right alongside Detroit in the mid 20th century. Detroit never really came back (until recently) but the population wasn’t forced out by taxes. There are a number of socio-economic reasons, systemic racism and job loss in my opinion are the top two. Businesses are forced to be more transparent and held accountable I’d argue more than ever, prime example being Amazon being forced out of Queens for looking like absolute trash ethically. Meanwhile companies like sales force have blown up because of what they preach. Philly used to make literally everything here and now almost nothing. American labor became “expensive”. If 80% of your company makes 1.50/hour in Malaysia what’s the incentive to give you a tax break to set up in a poor neighborhood in philly while your executives add a nice percentage to their pay? How does that help the city other than a shiny new tower in Mantua? If there are no middle and lower income jobs left, which is what killed our cities, then it doesn’t matter who or what you tax. So the people have no jobs, no money, poor access to education, and pay their percentage in taxes, with no room for growth, but companies get tax breaks and executives get large bonuses. Why would you want to be bullied and held hostage by that? Reagan era trickle down didn’t work and won’t work. It’s just a dinosaur argument

[cardeza]

Originally Posted by McBane

Two quick comments.

1. I don't think anyone is saying that Philly is on its way to becoming Detroit. But people have noticed some parallels and I don't think it's wrong to point those out. How's that old saying go? Those who do not learn history are doomed to repeat it. Remember, Detroit was a very large, powerful, and wealthy city up until the 1950's and it took many decades for it to bottom out. To say that Philly absolutely won't look like that in 50 years is foolish and frankly, irresponsible. All a city has to do is get to a point where it needs to raise taxes just to function and then you get stuck in that never-ending cycle of raising taxes and driving away your tax base until you look like Detroit, Camden, or Chester.

2. Kendra Brooks and her ilk genuinely believe that Philadelphia employers and the wealthy are some sort of ATM machine - without realizing how easily these revenue drivers can pick up and move. On the national level, I fully believe that we need to level the playing field but on the local level, these measures end up backfiring. See Detroit.

"We better watch out before we become Detroit" is one of the most overused dire warnings of all time. The funny part is Detroit didnt become what it is today because of a tax rate increase. Much of Philly is already like Detroit and has been for decades, let's not forget that. This is not a matter of going from Manhattan to Detroit.....Philly and Detroit have a lot in common but we didn't bottom out as low as they did.

[iheartphilly]

https://www.census.gov/quickfacts/fact/table/detroitcitymichigan,MI/PST045219

Detroit pop is 670k. Philly is no where near that. We don't have a problem unless we start losing big businesses and big population. If we start seeing this as a trend, then all bets are off. All signs for Philly still point in the opposite direction (i.e., population is steady and growing and med/ed/pharma is healthy).

[iamrobk]

Looks like the new city budget was approved (technically not final, but it's what will be approved): http://phlcouncil.com/council-gives-preliminary-approval-to-fy2021/

Highlights: Slight police defunding, slight increase in non-resident wage tax (resident wage tax and property taxes remain unchanged), slight increase in parking tax. Interestingly, the wage tax increase is only for one year:

For a commuter earning $50,000 a year, this would increase his/her wage tax by $27 a year, or $1 per pay period. The tax increase will sunset after one year.

[McBane]

Again, any discussion re Detroit has to acknowledge that Detroit took DECADES to fall apart. No one in the 1950's could have predicted what occurred over the ensuing years and I'd argue that 1950's Detroit was economically stronger than Philly is today. And yes, they did have all their eggs in one basket, which thankfully we do not. But let's not pretend that Philly has some amazing corporate community. Furthermore, I don't think anyone is definitively saying that Philly will follow Detroit's footsteps or that such a potential fall would occur exactly as it did in Detroit. As I stated above, no one can predict these things.

It will be very interesting to see how the next citywide election shakes out. Kendra Brooks is an at-large councilperson and, unlike district reps, she doesn't have a lifelong grip on the position. It's very possible she could lose her seat. It's hard to predict where we'll be in four years, but based on current trends (recent elections of Helen Gym, Larry Krasner, and Brooks come to mind), the opposite could happen: we could see more establishment politicians ousted in favor of hard left activists, hostile to developers, landlords, the business community as a whole, and of course all those upper income folks who populate the towers we drool over.

For those like me who wished that our complacent, corrupt, establishment politicians would give way to reformist, intelligent people who might would cut taxes and usher in a period of economic growth, LOL. That ain't happening.

[cardeza]

Originally Posted by iheartphilly

https://www.census.gov/quickfacts/fact/table/detroitcitymichigan,MI/PST045219

Detroit pop is 670k. Philly is no where near that. We don't have a problem unless we start losing big businesses and big population. If we start seeing this as a trend, then all bets are off. All signs for Philly still point in the opposite direction (i.e., population is steady and growing and med/ed/pharma is healthy).

At its worst, Philly lost over 25% of its population and Detroit lost over 50%, but part of Philly look like Detroit, even in 2020. You should look around a bit. We have a lot more areas that never fully depopulated and thus our population loss and vacancy rates arent as high, but there are sections that would be right at home in Detroit. This is the poorest of the 10 largest cities in America, lets not forget. we shouldnt discuss this as if Philadelphia is light years away from understanding detroit's plight. losing almost 600k people in 50 years is nothing to sneeze at......

[3rd&Brown]

Originally Posted by McBane

For those like me who wished that our complacent, corrupt, establishment politicians would give way to reformist, intelligent people who might would cut taxes and usher in a period of economic growth, LOL. That ain't happening.

For me this isn't totally out of the question. I think even some of the old school politicos (ex Darryl Clarke, as much as I hate him) would acknowledge the incremental tax reform that has happened has helped Philly create jobs.

It's just that it can't really be proclaimed publically because it comes off as being un-progressive and pro-business at the expense of people.

We know given Philly's unique history with taxes that's not the case.

Anways, I digress.

The more I think about the current moment we're in, I think Philly can still move forward and make progress without raising taxes. For me, it's about the basket of funding and how the money we have is spent. Two years ago, I would have never said cut police funding. But here we are in this moment, and my take is more that Philly specifically has increased Police funding ALOT and they've shown they can't get results with their extra money, so it's gotta be something else (i.e. their entire approach to policing).

So, why put good money after bad? If anything, incrementally redirect their funding to things like schools, parks, etc until they figure it out.

None of us in the private sector would be rewarded for such bad performance fo so long, so they should play by the same rules.

Two years ago I would have thought this strategy was risky. If anything, I've come to believe the opposite. Can't do worse than what we have with all the money we're spending, so time to try something else. Literally blow the whole thing up and start over.

[iheartphilly]

Originally Posted by cardeza

At its worst, Philly lost over 25% of its population and Detroit lost over 50%, but part of Philly look like Detroit, even in 2020. You should look around a bit. We have a lot more areas that never fully depopulated and thus our population loss and vacancy rates arent as high, but there are sections that would be right at home in Detroit. This is the poorest of the 10 largest cities in America, lets not forget. we shouldnt discuss this as if Philadelphia is light years away from understanding detroit's plight. losing almost 600k people in 50 years is nothing to sneeze at......

yeah...I'm familiar and have been to the poor neighborhoods. What big cities don't have poor neighborhoods, dilapidated homes, places that look like third world countries.

My point is that Philly's current environment, both in terms of businesses (large and diverse corporations, small and medium size businesses) and growth of housing stock and millennial population growth is keeping Philly relatively healthy. Again, part of Detroit's major depopulation problems stem from its job losses in the auto industry. This had a trickle effect on all elements of their economy. This is the big difference when you compare it to the current situation with Detroit. They never recovered from this and won't for reasons I mentioned earlier in the thread.

Because of Philly's cultural assets, location between NYC and D.C. easy access to the eastern shore-points, job diversity, especially the growth and concentration in med/ed and pharma, we should be able to easily maintain the current population.

[3rd&Brown]

Originally Posted by iheartphilly

yeah...I'm familiar and have been to the poor neighborhoods. What big cities don't have poor neighborhoods, dilapidated homes, places that look like third world countries.

New York
Boston
Washington DC
San Francisco
Los Angeles
Nashville
Seattle
Portland

These are cities I've lived in or visit frequently enough slash am familiar enough with to confidently say there is virtually no abandonment at this point. Sure, there might be shabbiness in certain areas, but even in the "worst" areas of the Bronx today, there is little to no abandonment.

[iheartphilly]

Yeah, we are talking about poor neighborhoods and poor people living in them. We weren't comparing abandoned homes but your statement has some truth to it. There are poor neighborhoods in many of those other cities you mentioned as well.

[christof]

https://www.cnbc.com/2020/06/18/coronavirus-update-people-flee-cities-to-live-in-suburbs.html

If millennials once piled into the cities, fueling downtown renewal and growth, apparently they are now piling out.

The stay-at-home orders brought on by coronavirus have more potential homebuyers looking for properties in the suburbs. Millennials are now the largest cohort of buyers.

As the real estate market began to recover in May, home searches in suburban zip codes jumped 13%, according to realtor.com, one of the largest real estate listing websites. That doubled the pace of growth in urban areas.

While homes are spending more time on the market overall, due to complications surrounding closings, both suburban and rural markets are not experiencing that lag time as much, due to very strong demand.

“This migration to the suburbs is not a new trend, but it has become more pronounced this spring,” said Javier Vivas, realtor.com director of economic research. “After several months of shelter-in-place orders, the desire to have more space and the potential for more people to work remotely are likely two of the factors contributing to the popularity of the burbs.”

More than half of the nation’s 100 largest metropolitan areas are seeing increased interest in the suburbs. Real estate agents in the New York City area have reported strong demand in the surrounding suburbs, as contracts on Manhattan apartments plunged 80% annually in May, according to Jonathan Miller of real estate appraisal firm Miller Samuel.

This new flight to the suburbs is clearly benefiting the nation’s homebuilders, who have seen a much quicker recovery than they ever expected.

“There’s no question that there are people who are fleeing the cities. There’s no question that the second home has been a place of refuge. There’s no question people are rethinking whether they want to be in high rise rentals with common spaces as amenities vs. having a home of their own with a backyard,” said Stuart Miller, chairman and former CEO of Miami-based Lennar.