What Can I Do With My Vacant Lot In Philadelphia?
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If it is your first time looking into buying vacant lots in Philadelphia, you may be shocked at the total quantity of these pieces of land. Multiple sources, including the city of Philadelphia, have noted that there are over 40,000 vacant lots throughout the entire city. Initially, Philadelphia home buyers and investors may think that this is their golden opportunity. For many it was – and still can be – but as real estate development prices continue to rise, it has become more challenging to buy vacant lots in Philadelphia as an investment and still end up in the green. Not to mention, property values in many neighborhoods throughout the City of Brotherly Love, like Fishtown, have dramatically appreciated over the past decade. This factor also adds to the difficulty of profiting from investing in Philadelphia vacant lots.
With so much land scattered throughout the city, you may be wondering what I can do with my vacant lot in Philadelphia. Below, we review creative ideas and solutions to this question.
Build A Community Garden on Your Vacant Lot!
Philadelphia is currently the 6th largest city in the United States, based on population. Larger and larger buildings, like the Comcast Technology Center, are being added to the skyline. If you are a longtime, local Philadelphia resident, you may remember that before the year 1987 the skyline was tiny. For many years, the City of Brotherly Love had an agreement to not build any new buildings taller than the statue of William Penn, who still sits atop of City Hall. After 1987, the Philadelphia population has grown larger as the buildings have grown taller, adding to the amount of structures and concrete that line the area. If you currently own land, and are wondering what can I do with my vacant lot in Philadelphia, consider adding natural beauty to the city through a community garden.
A community garden can act as a focal point of hope and inspiration within a community. It plays multiple roles and serves many functions. The beauty of a community garden built on a vacant lot in Philadelphia can completely shift the overall look of a block or street. Not only do these gardens beautify a street once created, but they also help maintain the cleanliness of the area long-term. A garden can inspire more local community members to take pride in their neighborhoods and litter less.
Building community gardens on vacant lots in Philadelphia comes with other practical benefits for the community. Often, it can be difficult to get fresh fruit and vegetables in densely populated urban areas. Community gardens give people access to nutritious foods at times when they may not have other options. Philly has very helpful vacant lot programs to assist with getting a community garden started and maintained.
Overall, adding beautiful greenery and fresh food to otherwise unused land can make the morale and pure strength of a community.
Build New Construction in Philadelphia
As noted previously, there is plenty of new construction in areas like Center City. However, that does not limit the possibilities of what you can do with a vacant lot in other parts of Philadelphia. Depending on the zoning code of the property, you can build different types of structures on your vacant lot. Here are a few common examples:
- Residential Single-Family House
- Residential Multi-Family House
- Commercial Mixed-Use
Certain zoning codes are more flexible than others. If your zoning code only allows for single-family houses to be built on the property, but you want to build a duplex or triplex on your vacant lot, you will need to go through the variance process. You can sell a house quicker if the property is zoned for multi-family in Philly. This is not always a guaranteed thing that you will get approved to change your zoning code, although it is possible. In neighborhoods like Brewerytown, Fishtown, and Point Breeze, locals are seeing more and more new construction sites because of increased real estate values over the past decade.
Sell Your Vacant Lot in Philadelphia
Philadelphia is no stranger to seeing vacant lots exchange hands between real estate investors, developers, the Philadelphia Land Bank, and even first-time property owners. There are many pros and cons associated with selling land. Particularly, in Philadelphia, you will find plenty of small vacant lots that are very simple and straightforward to sell. On the flip side, if you are selling a larger plot of land, the end buyer may require complex contingencies in the contract, such as environmental tests on the ground and soil, before agreeing to officially buy your vacant lot in Philly.
Regardless of the size, there are several ways to sell your vacant lot in Philadelphia. Many times, vacant lots can be used for something truly special. We hope that new owners of vacant lots aim to bring new beauty to their land. The Charnae Wise Memorial Gardens seen in this photo show how special these pieces of land can be transformed into.
How to Sell a Vacant Lot By Owner
Depending on how much free time you have available, and how much effort you want to put in, you can sell your vacant lot by owner. Often referred to as FSBO, selling any type of property ‘by owner’ comes with many advantages. You have utter and complete control over the sale of the property. Did I say that was an advantage? Like I mentioned, when you are preparing to sell your vacant land, you may view having complete control as a disadvantage. The sole responsibility of getting the vacant lot sold depends on you, your preparations, your efforts, your negotiating skills, and your organization. Sounds scary to some, and exciting to others. In any case, there are countless vacant lots in Philadelphia, especially in North Philly, that are very small in size. This can sometimes mean they require less work to sell them. Here is a quick list of things that you don’t have to worry about when it comes to selling a vacant lot:
- Open house
- Renovations
- Interior cleaning
- Professional photos
- Formal showings
Selling vacant lots that are smaller in size are typically much less maintenance when it comes to the actual sales part of it. Often, when vacant lots in Philadelphia are listed on the MLS, there is only one photo, which is usually a screenshot from Google Maps. The dimensions of a vacant lot are easily searchable online. There is no open house required, and buyers can drive by the vacant lot at any time without scheduling a property showing. Can it get any easier? It is important to note that selling a vacant lot by owner still requires you to handle the negotiation, paperwork, and full facilitation of the sale.
There are other alternative ways to sell your property, including listing it with a realtor. This option requires much less work from you the landowner but does typically require you to pay the realtor a percentage or flat fee for the real estate services. There are plenty of options when wondering what can I do with my vacant lot in Philadelphia. Consider both how much time and effort you can afford to invest in the selling it for sale by owner.
Lease Your Vacant Lot in Philly
If you want to hold on to your vacant lot in Philadelphia but are still interesting in generating cash flow, you can consider leasing your property. This does require efforts from your end as a property owner and potential landlord. Managing your own vacant lot isn’t terribly difficult. As long as you pay the monthly bills, such as taxes, and keep the land clean and groomed, you can usually be comfortable as a landlord without too many stresses. Trash, debris, and illegal dumping has been an issue in Philly, but the PHA is putting out efforts to prevent this when possible.
If you decide to lease your vacant lot in Philadelphia, you will need to manage the tenants and/or property that is placed on it. Many landlords outsource this process to a local property management company. The most common tenant that leases vacant lots in Philly are car owners. As you drive through parts of Philadelphia, keep an eye out for how many cars are parked on vacant lots. Many of those are leased vacant lots. Another way to lease your vacant lot is to place a shed or small storage structure on the lot, and rent it out as storage space. You can often find nearby neighbors that may be interested in additional storage.
Who Owns Most of the Vacant Lots in Philadelphia?
While many real estate investors and developers own land throughout the City of Brotherly Love, the Philadelphia Land Bank currently owns many of the vacant lots throughout Philly. Land Banks do not happen in every city. The Philadelphia Land Bank was established in 2013 to assist with the redevelopment of vacant properties. According to city spokesperson, Mike Dunn, the Land Bank has owned over 8000 lots at one time. With a quick search on the City of Philadelphia’s property website, you can find this list of vacant lots.
Why The Philadelphia Land Bank Buys Vacant Lots
The Philadelphia Housing Development Corporation oversees most land management functions in the city. They, alongside the Philadelphia Land Bank, have created a Vacant Lot Program with the goal of turning vacant land into “assets for the neighborhood and its residents“. The Philadelphia Housing Development Corporation is aware of the +40,000 vacant lots throughout the city and have shown their support through programs like this one.
The strategic plan of the Philadelphia Land Bank identifies opportunities to turn vacant land into affordable and market-rate housing, or community gardens.
For any real estate investor who has been to the Philadelphia Sheriff Sale, or real estate tax auctions, you may have noticed that certain vacant lots listed at the sale were only eligible for purchase by the Land Bank. This is partially because the Land Bank converts those vacant lots into community gardens. From here, the Land Bank transfers the lots to garden groups, such as the Neighborhood Gardens Trust, to develop in community gardens. Nonprofit organizations can apply to rent vacant lots from the Land Bank, sign a formal lease, and use the land as a community garden.
As noted above, the PHDC considers economic opportunity and inclusion as its top priorities when reviewing an offer from a Real Estate Developer. They do not allow just anyone to come in and start buying vacant lots in Philadelphia. If the proposed development project can also create more jobs and boost the local economy, this is viewed as a huge plus. Since the PHDC’s primary goal is not about profit, they score the offer price from a developer as the least important factor when reviewing an application to buy a vacant lot.
Buying Vacant Lots in Philadelphia
Real Estate Developers can buy vacant lots from the Philadelphia Land Bank, but they must first apply and be approved by the Philadelphia Housing Department Corporation. The application can be viewed here. The application is about 40 pages total. Remember, the goal of the PHDC is to add value to the community and its residents through the Vacant Lot Program. There are several criteria that the PHDC considers when reviewing applications. Each factor is scored based on the priorities and goals of this program.
- 30% Economic Opportunity & Inclusion
- 20% Development Team Experience and capacity
- 20% Financial Feasibility
- 15% Public Purpose – Social Impact
- 10% Project Design
- 5% Offer Price