What would the net fiscal impact be of a newly constructed residential development that was built under the abatement?
The abatement gives buyers of a new residential property a 10-year break on real estate taxes.
The policy has been considered a success. But critics say it siphons revenue away from the city and school district, benefits developers and caters to the rich.
To get an answer, Westrum and Gillen analyzed Westrum’s Brewerytown Square, a development of 144 market-rate townhouses at 31st and West Thompson streets.
Westrum wouldn’t have gone forward with the project without the abatement. It was a fringe area when he started the project and one of the biggest selling points was the tax break.
When Gillen and Westrum drilled down on Brewerytown Square, they concluded that for every $1 abated, the city took in $2 in tax revenue from other sources directly related to the project. It also found that 47 percent of its new owners came from out of the city.
“So, not only did the city get back the $1 that it forewent from the abatement, but it also received an additional $1 in revenue from other sources, due to the economic activity and new residents associated with Brewerytown Square’s development,” said a report on their analysis.
The debate over the abatement is expected to continue during the upcoming budget session and this report will likely play a role.
Jim Onesti. 215.440.2052 or email@example.com
Natalie Kostelni, Reporter- Philadelphia Business Journal