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The Disproportionate Impact of Act 135

November 21, 2023

Areal view of the urban sprawl and row houses in south Philadelphia, Pennsylvania.
Areal view of the urban sprawl and row houses in south Philly Pennsylvania.

A groundbreaking report from the ARC Justice Clinic reveals a racially disparate impact on property owners subjected to petitions under the Abandoned and Blighted Property Act (Act 135).

Today, the University of Pennsylvania Carey Law School’s Advocacy for Racial and Civil (ARC) Justice Clinic released a groundbreaking report examining the Abandoned and Blighted Property Act (Act 135). In “Impact of the Abandoned and Blighted Property Conservatorship Act (Act 135) on Vulnerable Homeowners in Philadelphia,” authors call attention to the disproportionate impact Act 135 petitions have on Asian American and Black homeowners in Philadelphia.

“Our clinic became aware of Act 135 when a resident shared their experience as a respondent to an Act 135 petition in Philadelphia,” said Cara McClellan GEd’12, ARC Justice Clinic Director and Associate Practice Professor of Law supervising this critical research. “Ultimately, that petition resulted in the loss of their property and no monetary compensation.”

The report is authored by Margo Hu L’23, Phillip Moore L’23, Thomas Munson L’23, Ally Johnson C’19, L’24, and Juan Madrigal Garcia L’24, with Noah Budnitz W’26, and Elizabeth Shackney L’24, MUSA’24 contributing to statistical analysis and mapping, respectively.

Cara McClellan GEd'12 Cara McClellan GEd'12“We are concerned about the cumulative impact of Act 135’s petitions across Philadelphia, especially the displacement of vulnerable homeowners in rapidly gentrifying areas,” McClellan said. “We think it is especially important to consider strategies and tools to ensure that vulnerable Act 135 respondents receive needed support to restore their property rather than face displacement.”

The findings show that:

  • Act 135 petitions are disproportionately filed in communities vulnerable to—or actively experiencing—gentrification;

  • Petitions are disproportionality filed against Asian American homeowners and Black homeowners; and

  • 255 of 577 (44%) Act 135 petitions filed originated from two organizations.

“Despite Act 135’s original purpose—to encourage community-led property development,” McClellan added, “the data analysis evidences that Act 135 petitions disproportionately impact Asian American and Black property owners, and communities experiencing gentrification in Philadelphia.”

Incentivizing Developers

Enacted in 2008, Act 135 was intended to address blighted and abandoned properties in the city and required petitioners to present evidence of four criteria demonstrating blight and abandonment. The 2008 law also required the court to determine that the structure met three of nine physical conditions that would justify petitioners assuming ownership of the property via a conservatorship.

In 2014, Representative John Taylor of the 177th District led legislators to amend the law to encourage—and financially incentivize—developers to file Act 135 petitions and obtain conservatorships.

The incentives appear to have had an impact. The authors reviewed the public docket information for all 577 Act 135 petitions filed from October 2009 to December 2022. Ninety petitions were filed in Philadelphia between 2009 and 2014, roughly 15 petitions per year. After the 2014 amendments, 487 petitions (approximately 60 per year) were filed between January 2015 and December 2022, with 44% of all 577 petitions initiated by just two nonprofit corporations.

In an interview with Michael Coard for WURD Radio, Moore explained the original intent of the law and how Act 135 would later be changed in ways that caused unintended negative consequences.

Phillip Moore L'23 Phillip Moore L’23“When you think about the intent of the legislature when they created this act, they wanted to create a tool for community development to allow members in that community to take control of a problematic property or two in their neighborhood in order to deal with safety issues or concerns about crime or diminished property values,” Moore explained.

“The Pennsylvania legislature changed the fee structure [of Act 135] so that there is a profit incentive in submitting a petition. On top of the legal fees a defendant would have to pay a petitioner, on top of the cost of renovations, petitions are also entitled to a conservator’s fee which can be equal to at least 20% of the cost of rehabilitation or the proceeds of the sale.”

In addition to expanding the definition of the “party of interest” eligible to file a petition, the 2014 amendments to Act 135 also entitled petitioners who successfully obtain a conservatorship to a fee equal to the greatest of three options: $2,500; a 20% markup of construction, rehabilitation, or demolition costs; or 20% of sale proceeds. Conservators are also entitled to reimbursement for “Costs of Rehabilitation,” such as costs or expenses incurred for construction, operation, or demolition; property rehabilitation and maintenance; environmental remediation; architectural, engineering, and legal fees; and costs, permits, and financing fees.

Act 135 Petitions & Philadelphia Homeowners

Analysis of the locations of properties named in Act 135 petitions, as well as the demographics of these communities, reveal troubling racial disparities. For example, Asian American residents own 7.2% of homes in Philadelphia County yet represent 11.8% percent of Act 135 petition respondents. Similarly, Black residents own 35.6% of the homes in Philadelphia County and account for 42.7% of respondents.

2023 Act 135 Report - Fig 2 map The locations of Act 135 properties (red) overlaid on Census data showing the percentage of the Census block's population that identifies as non-white.

In other words, conservator petitions are 64% more likely to be filed against properties that are owned by Asian American property owners, and 20% more likely to be filed against properties that are owned by Black property owners. Act 135 petitions were also filed more often in Census block groups that were majority Black or majority nonwhite compared to Census block groups that were majority white.

Shackney, who designed static and interactive maps for the report, said it’s important to understand the law’s “socio-spatial impact” and highlighted two trends demonstrated in the maps. First, there are observable concentrations in South Philadelphia’s Point Breeze neighborhood and in Brewerytown. Second, when overlaying the instances of Act 135 petitions with a neighborhood’s demographic data, there is a concentration of points in areas where demographics transition from majority-white to majority non-white.

Elizabeth Shackney L'24/MUSA'24 Elizabeth Shackney L'24/MUSA'24“When a law is passed there is rarely a systemic approach to evaluating its success. It’s important to understand the big-picture impact of attempts to address vacant or blighted property,” Shackney said. “We know there are people who have lost their homes to this policy, and we know this policy is leveraged in areas that are gentrifying or where there is a risk of displacement. That is a good place to begin to assess whether the law is doing what it was intended to do.”

The authors also examined the relationship between displacement risk and Act 135 petition filings. Their methodology applied the “Displacement Risk Ratio” (DRR), a tool created by the Reinvestment Fund to measure the risk of displacement, or the likelihood that long-term homeowners in a given census block would not be able to afford a home in their neighborhood should they need to purchase a new home in a contemporary market.

The ARC Justice Clinic’s report reveals Act 135 petitioners are targeting communities that DRR analysis shows to be “at elevated risk” or “at risk” for displacement. In Philadelphia, these communities represent just 4.4% and 15.6% of census blocks across the city. However, the data shows that the majority (59.4%) of Act 135 petition filings from October 2009 to December 2022 were concentrated in these areas.

2023 Act 135 Report - Fig 3 map The locations of Act 135 properties overlaid on the Displacement Risk Ratio for each Census block
group in Philadelphia County.

Housing & Racial Justice

Johnson and Madrigal will continue the work initiated by this report as part of their clinical legal studies in the ARC Justice Clinic’s economic justice practice area, which supports grassroots organizing for racial justice, including affordable housing and displacement prevention.

Ally Johnson C'19/L'24 Ally Johnson C’19/L’24“This first-of-its-kind research on Act 135’s impact in Philadelphia is part of the Clinic’s broader mission,” Johnson said. “Ensuring individuals can afford to live in their communities is foundational to the ARC Justice Clinic’s work to support communities in building power to address economic justice, health justice, mass incarceration and over-policing, and education equity issues.”

Madrigal noted that Act 135 has a role to play with respect to improving communities across Philadelphia.

“But that should not come at the cost of disadvantaged property owners,” he said. “Act 135’s goal is to improve the ‘quality of life’ of residents who already live in a neighborhood. This is best achieved by helping disadvantaged owners retain their property when they want to remediate their properties but do not have the resources to do so. Policymakers and government officials should rally to provide more resources to property owners so they can fix their properties before facing an Act 135 petition.”

Juan Madrigal L'24 Juan Madrigal Garcia L’24As students in the ARC Justice Clinic, Johnson and Madrigal were the lead counsel on several legal cases touching on issues including Act 135 conservatorship, employment discrimination, and appraisal discrimination. The team represented a coalition of community groups, as well as individuals seeking redress for economic harms caused by racial discrimination.

“It has been immensely gratifying to apply my legal skills across these contexts and to learn from clients with longstanding commitments to economic and racial justice work,” Johnson said.

Thomas Munson L’23, who was a certified legal intern in the ARC Justice Clinic when the clinic initiated its investigation of Act 135’s impact in Philadelphia, echoed Johnson’s sentiments.

“The ARC Justice Clinic was easily the best experience I had in law school,” he said. “The clinic prepared me for a career as a civil rights attorney by giving me the opportunity to practice movement lawyering. I know that I will be a better public interest lawyer because of my work with the ARC Justice Clinic and with Professor McClellan.”

Connect with the ARC Justice Clinic

The Advocacy for Racial and Civil (ARC) Justice Clinic provides legal support to community members in the Philadelphia region. The ARC Justice Clinic’s mission is to use legal tools to support a grassroots movement for racial justice. Individuals impacted by Act 135 are encouraged to consider contacting the clinic by filling out this form.