HARRISBURG - Affordable housing advocates are urging a reform of Pennsylvania's property tax sale laws to help fight blight in both large cities and small towns.
They want to overhaul a system that allows speculators to obtain a lien on property at tax sales by paying delinquent taxes and yet not go the next step and obtain clear title.
Other legislation being sought would give long-standing residents the opportunity to take ownership of homes in cases where the recorded owner has abandoned them and put more restrictions on who can bid at property tax sales.
Rewriting archaic tax sale laws that date to the 1920s and 1940s is seen as a way to help fiscally distressed cities rebuild their tax bases and help get newly authorized land banks off the ground.
A state law that goes into effect later this month provides for merging parcels of abandoned and tax-delinquent properties under locally run land banks to manage blighted and vacant properties and return them to productive use.
Issues relating to blight, affordable housing, homelessness and creating housing options in the Marcellus Shale drilling region were discussed last week at a housing conference sponsored by the Housing Alliance of Pennsylvania, an advocacy group.
"The tax sale laws are blind to the needs and interest of the neighbors," said Alliance executive director Elizabeth Hersh.
"The current tax delinquency laws are geared to trying to catch up on taxes and not what happens to the property afterwards," said Rep. Chris Ross, R-158, Unionville, chairman of the House Urban Affairs Committee.
Mr. Ross has sponsored legislation to revamp the tax sale laws for property with municipal claims or liens for delinquent real estate taxes and plans to push it next session.
The biggest change sought is to consolidate two tax sales for different purposes into one. The traditional process provides first for an "upset sale," where a bidder satisfies a municipal debt against the property. The second sale is a "free and clear" sale that extinguishes all debt against a property.
The problem is that land speculators will pay a minimal amount in an upset sale to satisfy the municipal debt, but not take the next step and acquire title to the property, said Mr. Ross. They will sit on the property without making an effort to fix it up. Their goal is to be in a bargaining position in case neighborhood development gets under way.
"They will interfere with any redevelopment idea you have," said Mr. Ross.
That could prove a big hurdle to a land bank attempting to obtain parcels through a purchase, leasing or a municipal transfer to advance a redevelopment plan, he said.
Pennsylvania has enacted laws to prohibit landlords with revoked rental licenses, housing code violators and tax delinquents from purchasing property at a tax sale.
Specifically, the Real Estate Tax Sales Law prohibits a landlord whose rental license has been revoked by a municipality within a county holding a tax sale from purchasing property at it.
The Alliance wants legislation to extend the ban to any landlord whose rental license has been revoked by any municipality.
The group also wants to extend the ban to Scranton, Philadelphia and Allegheny County which are governed by a separate municipal claims and tax lien law.
Contact the writer: rswift@timesshamrock.com