philadelphia's ten-year tax abatement - Econsult Corporation

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STATUS OF PHILADELPHIA’S TEN-YEAR TAX ABATEMENT ON ITS REAL ESTATE MARKET Updated statistics on the size and distribution of abated properties in Philadelphia. Next, we examine how the total amount of property tax revenues that are abated breaks down by property type. As abatements begin to expire after their ten years, this indicates where these new property tax revenues will be coming from. The following chart breaks out the total amount of abated tax revenue by property type, as of August 2008: August 2008 Econsult August 2008 Corporation 15
STATUS OF PHILADELPHIA’S TEN-YEAR TAX ABATEMENT ON ITS REAL ESTATE MARKET Updated statistics on the size and distribution of abated properties in Philadelphia. Here is the same chart as of April 2006: 22% 34% 5% Figure B.4 Percentage of Total Tax Revenue Abated: All Properties 29% 10% Single-Family Home Condos Hotels/Apts Commercial Industrial • The growth in abated tax revenue since 2006 is due to growth in the number of abated condo properties in Philadelphia. These properties accounted for only 10% of abated property tax revenue in 2006, but currently account for 27%. • The growth in abated condos appears to have come at the expense of abated hotels/apartments, which shrunk from 34% of all abated revenues in 2006 to 16% in 2008. • Other property categories have held relatively constant since then. We now examine the fiscal implications of the abatement program to the City of Philadelphia. Based on our estimate of the incremental impact on housing production during the tax abatement period, we can use standard input‐output models to estimate the economic impacts – spending, earnings and employment – attributable to the abatement policy. These impacts are the result of the construction spending that would not have otherwise occurred in the City. This additional economic activity has generated incremental tax revenues to the City (and to the state) that also would not have been generated in the absence of the abatement program. Econsult August 2008 Corporation 16
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STATUS OF PHILADELPHIA’S TEN-YEAR
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philadelphia's ten-year tax abatement - Econsult Corporation

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