LOOP’s renewal combats gentrification
City Council read and passed Bill number 160012 March 17, and Mayor Jim Kenney signed it Tuesday — the legislation extends and reopens the Long Term Owner-Occupancy Program (LOOP), protecting long-term residents from skyrocketing property assessments that come coupled with escalating tax rates. The program was initiated and offered in conjunction with the Actual Value Initiative (AVI), which took place in the 2014 tax year and prompted the Office of Property Assessment (OPA) to reconsider the city’s raising property values.
Twenty or 30 years ago, who would have guessed that one’s house at 18th and Carpenter streets would go from a worth of $50,000 to $500,000 — and that taxes would go from $500 a year to $5,000? The LOOP program offers relief for folks, especially those on a fixed income, who are needlessly pushed out of their neighborhoods or lifetime homes because of a rapidly improved real estate market.
“My district has the most LOOP participants in the city,” 1st District Councilman Mark Squilla told SPR. “We think it protects them and enables them to stay in their homes. What would we do if we have 6,000, 7,000 people not being able to pay their taxes? Do you put them up for Sheriff’s Sale? Do you just not collect it and people fall into delinquency?”
Initially, there was room for $20 million in the City’s budget for LOOP participants — only about $18 million was grabbed.
“What this does is the people who were eligible for the program in 2013 and somehow did not know about it or didn’t apply — they now would be able to apply and get in the program but only for the remaining years. So if they didn’t apply, they have seven years left,” Squilla said.
The LOOP program lasts for 10 years and freezes a property’s value at its pre-AVI value hike. After the 10 years is up, homeowners can reapply. But this new legislation also lowers the income eligibility from 150 percent of area median income to 80 percent. Originally, the legislation dictated that, say for an individual, one could make up to approximately $85,000 annually and still be eligible for LOOP participation. Now, that amount is closer to a salary of $45,000. However, that lowered individual salary rate will take place in the next wave of LOOP applications in ’23 and ’24.
Beth McConnell, the policy director at the Philadelphia Association of Community Development Corporations (PACDC), helped us understand what LOOP is all about and how it’s important as the AVI assessments corrected a long-needed set of property evaluations.
“We’re correcting our property tax system and in correcting an inherently unfair and outdated tax system, a lot of people were really socked by AVI,” the resident of the 2000 block of South Darien Street explained. “What AVI was meant to do was correct for three things: one, we had not assessed property values citywide in decades; two, when you looked at how properties were assessed, there was a lot of confusion — some were way under- and over-assessed; and three, we had to get rid of this weird policy of only taxing 30 percent of your property.”
She added, “in order to be eligible for LOOP, your property tax assessment had to triple or more from the year 2013 to 2014,” which McConnell said affected “a fairly large amount of people. It was created in 2013 as part of the rollout and implementation of AVI with the understanding that AVI and gentrification was socking people.”
“I am happy that the finance committee favorably recommended Bill №160012, which will extend Longtime Owner Occupants Program benifts beyond the original 10-year period for as long as the eligible homeowner lives in the property,” 2nd District Councilman Kenyatta Johnson said in a statement. “We must provide tax relief to long-term residents in rapidly gentrifying neighborhoods. Philadelphia is developing into a global destination city, which is exciting. We must ensure that longtime residents are not left behind, so that the families who have been here for generations are able to stay.”
Some other requirements for eligibility require that the longtime-owner or occupant has lived in the home since July 1, ’03; that the home is either a single family or multi-unit property with no more than three residential unites and one commercial unit; that the property has not received a tax abatement; and that the applicant is not default or delinquent on current tax dues.
As McConnell put it, it’s that abatement part that can seem particularly cruel in the sense that those who have lived in a neighborhood for 40 or 50 years can watch a 10-year tax-abated new construction home go up on their block while their tax rate gets higher and higher with no break. LOOP protects long-term homeowners from having to decide between staying in their house and eating right, affording medicines or transportation.
“Watching someone come in with a 10-year tax abatement — that can sting,” McConnell said. “The City is looking at programs like LOOP as a way to build some more equity into the property tax system in light of the fact that we give heavy subsidies to new construction or significant improvements.”
Squilla is well aware of this, as well.
“The LOOP bill is like a gentrification bill that’s a reverse 10-year tax abatement — we saw that abatement was spurring development, and that was great for the city and we’re getting high rates on the houses when they come out of their abatement, but then there were people who were long-time homeowners paying the brunt of the taxes,” he explained. The abatements, enticing to developers, “don’t work in every area, even where there’s abatements there’s no development,” he noted. And in South Philly, “amazingly, it’s really booming. I think it’s a good sign and we have a lot of young people in the city, and we have to do a lot of work to keep them here. We don’t want to grow too fast.”
He’s seen the boom in his district, too, in sections of Northern Liberties, Fishtown, Kensington and Port Richmond. But in areas like Pennsport, Point Breeze, and East Passyunk Avenue, residents are, seemingly, suffering the most from gentrification and displacement.
“I think the LOOP program is a very important way to build a more equitable city by allowing people to remain in their neighborhoods as they improve,” McConnell said. “And it’s important to know that there’s help out there.”
To read more about eligibility, go to phila.gov/loop.
Contact Staff Writer Bill Chenevert at email@example.com or ext. 117.
New construction in South Philly often contrasts the aesthetic of long-term residents’ homes, upping their property taxes and, sometimes, pushing them out of their neighborhoods.
Photos By Kirsti Streahle and Tina Garceau