All Sustainability, All the Time... The 10-Year Tax Abatement Has Got To Go!

In his June 17th speech to the Planning Commission, Mayor Nutter stated "We prefer to revitalize existing structures where possible and carefully integrate new development into our existing environment."

Last night, during his speech to the Urban Sustainability Forum at the Academy of Natural Sciences, Mark Alan Hughes addressed the topic of "sustainability." As is practice among planning types, he prefaced his talk by reciting the various truisms of the green movement including the oft-repeated phrase, "the greenest building is the one that is already built."

It's one of those bumper-sticker slogans that the City's green guru repeats in just about all of his media appearances. Despite Dr. Hughes' affinity for the phrase and his boss's apparent commitment to the revitalization of existing structures, it's a bit curious Dr. Hughes never ever addresses Philadelphia's Tear-Down-Old-Buildings Tax Credit.

Err, I mean the "10-Year Tax Abatement."

Despite this apparent preference of the new mayoral administration, why isn't anyone questioning whether it makes any sense, especially in the whole sustainability context, to subsidize the tearing down existing structures?

Aside from the very questionable equities of a very poor City subsidizing the construction of million dollar condos, why do we subsidize the dirty and decidedly not green business of tearing down old homes?

In my humble opinion, any serious appraisal of Philadelphia's sustainability priorities must include a reappraisal of the 10-year Tax Abatement. It's just not sustainable. It's the antithesis of "green." It's anathema to the commitment to meet our present needs without constraining the ability of future generations to meet their needs, which by the way is Dr. Hughes' definition of sustainability.

As then Candidate Nutter wrote in his Plan for Better Housing Now, "One of Philadelphia’s advantages among large U.S. cities is our large stock of historic, high-density, and well-located housing." As some other candidate for some fictional office wrote, "instead of locally-crafted wrought iron and copper sheathing, we install built-in-somewhere-else, pre-fab garage doors."

To which, nearly two years later, I'd like to add that by shipping in all that pre-fab crap we also increase our collective carbon footprint by several orders of magnitude. Not to mention, all of that old growth pine that that turn-of-the-century Philadelphians used as studs gets gutted and tossed in the local landfill - or worse - shipped to some Lou DeNaples landfill somewhere up in Scranton courtesy of some no-bid NTI contract.

Now I'm not saying that Philadelphia should not provide tax incentives for construction projects. I'm just saying that we should only provide tax incentives for sustainable construction projects.

Fortunately the U.S. Green Building Council has already provided us a handy, dandy metric for measuring the right kind of sustainable construction projects - LEED.

I'd rather not get into all the details because, after all, this is just a blog. And to be perfectly honest, I doubt I have anything resembling a complete understanding of how LEED works. But boiled down to basics, I propose rejiggering the whole abatement thing. Quit handing out tax breaks to any old developer who tears down classic structures only to replace them with generic boxes. Instead, tie the abatement to LEED rating. An abatement premised on LEED certification could continue to incentivize new construction while also preserving the existing housing stock that creates the sense of place that defines Philadelphia. The basic structure would look something like this:

Platinum buildings would receive a 100% abatement.
Gold buildings would receive a 75% abatement.
Silver would get a 50% abatement.
Certified would get a 25% abatement.
All the other guys, no soup for you.

In addition to favoring the retention of our "greenest buildings," an abatement premised on LEED rating could also impact local employment. As I understand it (I may be wrong), a building's final LEED score roughly approximates the overall carbon footprint of associated with the construction and subsequent operation of the building. Because locally-crafted products don't incur the same carbon costs some pre-fab product built-on the other side of the planet, a LEED-based abatement would give builders a reason to choose local products made by Philadelphians. In other words, having a tax abatement based upon LEED score would be a damn fine way to get around that whole constitutional issue associated with local preferences. If Philadelphia is ever going to be really sustainable in not just the "green" kinda way, we really need to get back into that whole locally-made-products business.

Look, I'm not wedded to LEED. I just use it here as as an example of how eligibility for a new 10-Year Tax Abatement could be premised. We could surely tie a new abatement to other factors like affordability. Whatever Philadelphia ends up doing, Philadelphia will never be a truly sustainable city until the present 10-Year Tax Abatement is abolished.

The hardest thing to do is to doubt your own success. And arguably, the 10-year Tax Abatement is the most successful City policy of the last 25 years. And despite all that, it needs to go.

If Mayor Nutter really wants to accomplish his goal of making Philadelphia the greenest city in America, the 10-Year Tax Abatement has got to go.