Category condo

Let’s Trade: Multiple City-Owned Vacant Lots and Houses – FOR – 31 New / Mixed-Use / Eco-Friendly Homes

These roof decks should have awesome views!

 
I would say that’s a good deal.

All kidding aside, it wasn’t an actual trade but a purchase by a private developer for city-owned real estate. Nonetheless, it will be a nice change for an already-on-fire neighborhood. Postgreen’s Folsom Powerhouse project promises a few things to its future customers: Convenient Mixed-Use Development, Energy Efficient Design, and Affordable Units for Varying Income Levels. Based on Postgreen’s past development history, I’d say it’s doable.

Francisville is going through a building boom right now, due to its highly-accessible location (right next to Fairmount and Center City) and an abundance of vacant lots. Well, there used to be an abundance of them. Most have either been bought by developers, or are being developed as we speak.

If you’ve never heard of Francisville before, you’re not alone. Most residents of this area refer to the entire 19130 zip code as either Fairmount or the Art Museum Area. It’s the locals who have lived there for a long time (sometimes for generations), that know the difference between Fairmount and Francisville.

The unofficial borders of Francisville are Girard Ave (North), Broad St (East), Fairmount Ave (South), and Corinthian Ave (West). These are the borders typically listed online, and they are also the ones that real estate agents use most often. Again, since I’m not a Francisville local, I apologize for any errors with defining your neighborhood.

So, why is Francisville being reinvented?

There are a few reasons why (IMHO):

1) Its Location: Francisville is super-conveniently located just east of Fairmount (which has been going through positive neighborhood changes for a few decades now), and just north of Center City (which allows those who work downtown to either walk, bike, or hop on the subway during their daily commute).

2) Its Changing Demographic: The new residents seeking shelter in Francisville are typically young professionals, families, and empty nesters. The same type of people who are currently buying in Center City. They want access to Center City (and its surrounding area/amenities), but do not want to pay Center City prices (per sq/ft). Hot real estate, for less money, equals high demand.

3) Its Housing Stock: Due to the large proliferation of vacant lots in Francisville, it has allowed developers to get in fairly easily, build what they want, and still make a good profit (probably better than most Philadelphia neighborhoods). New construction townhomes/condos, with upgraded amenities and roof decks, is the most common theme. All for less than what you would pay for similar real estate in Center City (most of the time). On top of that, there are many different new construction homes to choose from due to all of the new development; so buyers can be a little picky, even though the current trend is slowly changing to a seller’s market. In a neighborhood like Rittenhouse Square, new construction is hard to find due to its denser, and more established, layout.

There are more reasons why Philadelphians are flocking to this small section of the city, but I’ll let you do a little Google’ing on your own to learn more about why Francisville is one of Philadelphia’s 10 hottest neighborhoods for real estate.

Why are creative businesses choosing Philadelphia today?

Center City, Philadelphia

 
Well, there are lots of reasons (as stated in this article), but as someone who also works for a local, Philadelphia-based business and lives in Philadelphia, I have reasons of my own.

As a real estate agent, people are constantly asking me what their homes are worth, or how real estate is faring. “I live in Ocean City, NJ. How’s the market doing?” To answer that question is very hard, because there is technically no such thing as the market. Real estate is segmented, and broken down into many markets (or sub-markets); even more so with large metropolitan areas, where neighborhoods can change quickly due to high-density development.

As an agent, I can always go to the MLS, look at comparable sales in your area (Active, Pending, and Sold), ask a few basic questions, and get a general sense of what your home is worth (within a range). But it really isn’t until I actually see your home, understand its condition, and know what features drive your local sub-market, that I can truly feel confident about a professional opinion of value. And remember, it’s still an opinion; even licensed appraisers have an allowable margin of error.

The same can be said for Philadelphia.

There are still people in the US (and even the world) today that think Philadelphia looks exactly as it did in Rocky 1. Industrial, desolate, and hanging on for dear life. Philadelphia, just like any other major, industrial US city, went through deindustrialization. The changes caused jobs to leave, the population to decrease, and the city to become under served.

Well, time to wake up.

Philadelphia may still have some warts (just like Boston, NYC, and DC), but the city is changing for the better, and continues to do so everyday.

There are 3 general reasons why I feel creative companies feel strongly about setting up shop in the City of Brotherly Love (again, just a personal opinion from a local real estate agent):

1) Philadelphia has a great location. Just like in real estate (where the 3 rules are location, location, and location), one of the most important things going for cities these days is location. Modern urbanites want access to options. Whether those options are beaches, mountains, highways, trains, or just a lively downtown, location plays a huge role in a city’s viability to attract new residents and businesses. Philadelphia has an awesome location, and maybe one of the best in the US, if you really stop to think about it. We have a temperate climate (to showcase all four seasons), we are close to both beaches and mountains, and we are situated in between 2 of the most important US cities (NYC and DC). This allows Philadelphians to utilize countless resources from one spot.

2) Philadelphia is a manageable city. I have used this expression numerous times with my clients, because it’s very true. Whether you are from the west coast or have lived in this area your entire life, Philadelphia truly is a manageable big city. What does that mean exactly? For a metropolitan area with 6 million people, most people can get from Point A to Point B fairly easily. Need to travel? There are many airports in the area to choose from, aside from PHL. How about a train? 30th Street Station will take you anywhere on Amtrak, and local trains also provide a solid rail system. 95, 76, and 676 are clogged with traffic? Hop on Kelly Drive for a scenic tour, and save time while you’re at it; or use some of Philadelphia’s “back road” options, there are plenty of them. Recreational activities in the city? Fairmount Park is the largest, landscaped urban park in the US. Hike, bike, run, walk, or bring your pets to a spot that most large cities would be jealous of. Weekend getaways? There are too many to count, as Philadelphia has great access to some of the nicest (and quaintest) spots in the US. My point is, if you’re tired of traffic, tired of the city, tired of being so close to so many people, there are plenty of options by plane, train, car, or bike.

3) Philadelphia is affordable. Well, maybe not if you’re from Texas, but as far as major US cities go (especially in the Northeastern US), we are. Not only is Philadelphia affordable, but you can find any type of living accommodation imaginable. Single homes, twin homes, row homes, trinities, condos, lofts, you name it. And with over 100 different neighborhoods within the city alone, the odds are that you can find one that best fits your needs. Whether you are renting or buying, doing property management or flipping properties, chances are you can find something that fits within a reasonable budget. Philadelphia’s affordability also goes a long way if someone is considering a move to NYC. We’re only 90 miles away, and highly accessible by train and car. That’s why Philadelphia was dubbed NYC’s “6th Borough.”

Whew!

That’s a lot of optimism for Philadelphia, but I find that there are plenty of people today who agree with me (this is a great article).

For those that don’t, no worries. Everyone has his/her own opinion, and as Americans, we’re all entitled to one.

Well, it’s official … AVI is here.

Philadelphia AVI Assumptions – February 2013

 
AVI, otherwise known as Philadelphia’s Actual Value Initiative, was brought about to modernize (or fix) the city’s broken property tax system.

Everyone has their own take on AVI, and most people who write about the subject really get into the nitty-gritty details of the math, property tax histories, etc. My promise during this post is not to do any of that, but to provide a professional, real estate based opinion on why I feel AVI is a good thing for Philadelphia.

First and foremost, the city’s pre-AVI system was flawed. It was outdated, it lacked logic, and it really focused on certain real estate owners; meaning that some people actually were taxed differently, even though they owned similar properties and (in some cases) even lived on the same block. According to this Axis Philly map, there are 2 large sections of Philadelphia (Northwest & Northeast Philadelphia), that will be seeing big changes to their taxes as a whole (and for the better). And I’m not just saying that because I live in Roxborough, even though I’m stoked that my property taxes will be going down.

You can see what I mean by checking out this map.

Large portions of real estate in both NW & NE Philadelphia are heavily colored in “blue.” Any shade of blue means that these owners’ property taxes will actually be going down in 2014, from their 2013 levels. It also means that pre-2014, these homes were “overtaxed” (in the eyes of the city) according to it’s new, easy-to-understand-and-use, tax system.

Here’s why I feel that AVI is easy to understand, and also why I feel it’s a step in the right direction for Philadelphia’s overall property tax system.

You take your assessed value, multiply it by the property tax rate of 1.34% (which was just recently approved and my motivation for writing this post), and you get your annual property taxes.

Simple, right? Yes, it is simple.

The only other catch out there is what’s called the Homestead Exemption. This is not as logical to me as AVI, but it will help some people with the drastic tax changes coming in 2014. The HE allows you to take $30K off of your assessed value, and all you have to do is complete a form. Again, it doesn’t make too much sense, but it is what it is.

If you are approved for the HE, here’s your new formula: Assessed Value – $30,000 x 1.34% = Annuual Property Taxes.

Now, here’s why I like AVI.

It’s a fair system. Are the newly assessed values not 100% accurate? Of course. Are they more accurate than before? Much more accurate. Therefore, taxes are more fair because we are now dealing with realistic/current assessed values. If you are not happy with your assessed value, you have the right to an appeal. I don’t know how you can be more fair than that.

That’s 1 for AVI.

It shares the city’s tax burden. What do you think is one of the biggest reasons why Philadelphia has such a high wage tax? They don’t have enough money to cover their annual budget. Why don’t they have enough money to cover their annual budget? Well, we could get into a year-long argument over local politics, cronyism, unions, pensions, fringe benefits, and the like; but that’s not why I’m posting about AVI  today. The wage tax is high (and focused more on businesses) because our property taxes were low; until now. I don’t feel that just taxing the h*ll out of loyal Philadelphians is the best solution, but in all honesty we should help shoulder the burden by paying our fair share; and AVI is fair. I also feel that taxing businesses less will help bring more jobs, more opportunity, etc.

That’s 2 for AVI.

It’s a legitimate formula, it makes sense, and it’s easy to understand. Assessed Value x Tax Rate = Annual Taxes. It doesn’t get any easier than that, and every property is now looked at in the same way. Do I think the tax rate they agreed upon is high? I can’t share an opinion on that yet, because all of this is too new to truly comprehend. I can say that compared to Philadelphia’s neighboring suburbs, it’s a good starting point. Again, we could argue all day over unfair tax abatements, the quality of Philadelphia’s public services, public schools, crime rates, etc. And I’ll say this again, that’s not why I am posting today.

That’s 3 for AVI.

My hope is that this post generates some good comments and opinions from my fellow Philadelphians. But please, try to keep the caps lock off and the cursing to a minimum.

PS – You can calculate your own Philadelphia property taxes by using this handy AVI Calculator.