The current system of redeveloping vacant lots is an uncertain and cumbersome process that begins when a vacant property becomes tax-delinquent and abandoned. A vacant lot that is tax delinquent can spend several years in limbo, going up for tax sale every year and potentially never being purchased. Ideally, a vacant lot would go up for tax sale after one year of back taxes accumulated and then would be purchased at the tax sale by a responsible party with an interest in redeveloping the property into some productive, tax-paying use. Unfortunately, there is a low demand for real estate in general in South Providence, especially derelict, vacant land with burdensome back taxes. Generally, vacant lots are not picked up at tax sale (unless the housing market is doing well and speculators identify a potential profit from picking up vacant lot tax titles). Since there is no clear or comprehensive system to foreclose and redevelop these unwanted lots, neighborhoods continue to suffer from the negative impacts associated with blighted land.

Who are the major players in the redevelopment process? 

The Providence Redevelopment Agency (PRA) is a quasi-governmental agency in Providence whose main mission is to transform blighted land in the City into productive, tax-paying uses. The Agency was chartered by the City primarily to handle real estate transactions for the City. The PRA has the power to obtain vacant lots in a variety of ways including, (1) Title foreclosure (tax-reverted lots), (2) Negotiated sales, (3) Eminent domain.

The PRA’s mission lends itself most appropriately to the purpose of vacant lot redevelopment. The PRA manages the Special Vacant Lot Program, also called the $1/Lot Program by which residents, community groups and others can purchase vacant land in their neighborhoods at the reduced rate of $1 per lot (regardless of the size). Previously, the PRA offered lots to local residents and non-profits at a reduced rate of 0.25/sq. ft. The program was improved after 1997 on the recommendation of the Mayor’s Special Vacant Lot Task Force Report and demands from local community groups citing the burdensome costs of redeveloping vacant lots for low income residents.

Employees from the Department of Planning & Development staff the PRA and the Agency is funded by the City’s annual budget. The PRA pays taxes back to the City for all property that it holds title to and they have a limited budget for acquiring new properties. Generally, the PRA selects lots for purchase only when a specific redevelopment project has been identified in an area where vacant lots exist. The PRA’s limited funding also limits the level of advertising and marketing they can provide for the Special Vacant Lot Program.

During the Tax Sale process, the PRA must decide which lots to consider for purchase. There are three categories of tax delinquent lots that appear at tax sale:

          1. Lost lots – these are vacant lots that are generally undesirable to anyone at Tax Sale

2. Lots that are valuable for redevelopment – this can be either future or current redevelopment       projects that the City, non-profits, or the Planning Department is considering implementing.

3. Lots that are valuable at resale – these are vacant lots that may be attractive to purchasers at tax auction.

The PRA will purchase lots that are specified in redevelopment plans and these lots can fall into the first two categories; Lost lots and Redevelopment lots. Again, not all lots that fall into these categories are picked up by the PRA because of the costs associated with foreclosing on the lots ($3500 -$4500) and the time required to obtain the title and abate the back taxes. The City Tax Collector will hold on to titles of vacant lots that are tax delinquent and not purchased by the PRA. The City holds up to hundreds (200-400 lots) of tax titles on tax delinquent vacant lots without foreclosing on them.

Tax Sale Process

The Tax Sale process begins after a property is tax delinquent for several years. However, it is not clear how the Tax Assessor’s Office determines exactly when or which properties go on to tax sale. Flow Chart 1  shows the current tax sale process from the perspective of the PRA without depicting the process of tax title bidding. Flowchart 2 depicts the current system of tax sale with tax title bidding included. The Tax Sale is held twice a year and it is advertised in major newspapers such as the Providence Journal. Anyone can bid on properties at tax sales including the Providence Redevelopment Agency.

Tax-title bidding is a complicated bidding strategy by which speculators can purchase full or partial interests for a particular property usually with the intention of selling the property’s title back and collecting interest on it when someone wants to redeem and foreclose on the property. This type of bidding is called land speculation and it is known to leave vacant lots in derelict conditions for many years, until the speculators can sell off the property or transfer it back to the City at a profit. The Tax Sale Realty Law of 1997 was created in direct response to the concerns of community groups that land speculation was preventing the redevelopment of vacant land. This law allows the City to identify lots that may be vulnerable to speculation and send them directly to the PRA.

1. The lack of a clear, unified redevelopment plan focusing on the redevelopment of vacant lots coupled with a lack of a clear mechanism for community participation in the redevelopment process

2. No systematic surveying of lot conditions, level of contamination, risk assessment.

3. Tax policies hindering the redevelopment process because of burdensome back and future taxes and unclear state/municipal tax procedures for tax title foreclosure

           4. Deficient resources: Funding, management, and leadership

There are more flaws in the current process then these but I selected these particular problem areas because they highlight issues that, with reform or improvements, could most significantly impact the redevelopment process.

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by Ana Baptista

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