Econsult Solutions, Inc., in conjunction with the Penn Institute for Urban Research and Consulting, was retained by the Philadelphia Redevelopment Authority (PRA, formerly the RDA) and the Philadelphia Association of Community Development Corporations (PACDC) to conduct a cost-and-benefit analysis on the 40,000
existing vacant parcels in Philadelphia. Econsult was able to quantify the devastating costs of the current system to the City and the potential benefits of a possible reform.
PRA had a particular interest in evidences in support of potential policies in foreclosure prevention and repositioning. To address such concerns, Econsult utilized econometric analysis and GIS mapping techniques in geographic-sensitive studies to analyze the problem.
Econsult approached the issue, looking at both the cost of the current system and benefit of an alternative. The costs of the current system were high. Econsult estimated that the current costs to the City were $3.6 billion in lost property value, $20 million in annual City maintenance expenses, and $2 million in lost property taxes.
On the benefit side, Econsult found that, were such efforts taken, there would be considerable gains to the City from the remediation or redevelopment of the vacant parcels, the rise in tax revenue, the increase in employment opportunities and the overall stimulus effect on the local economy.
Both the high costs of the current system and the significant benefits a new approach led Econsult to conclude that immediate action is necessary to stop the leakage in the City’s welfare, and a more strategic approach is vitally crucial in handling the vacant parcels for the City’s betterment.