How Philadelphia Can Address Its Affordable Housing Shortage

Panel offers a range of policy solutions, from zoning changes to rent control

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How Philadelphia Can Address Its Affordable Housing Shortage
Philadelphia, Pa
Lexey Swall The Pew Charitable Trusts

Despite being less expensive than some other large cities, Philadelphia has a significant affordable housing problem and needs to explore a variety of policy options to address it. That was the consensus of local housing advocates and current and former officials during a recent online panel discussion about The Pew Charitable Trusts’ new report “The State of Housing Affordability in Philadelphia: Who’s Cost-Burdened—and Why.”

The report found that 4 in 10 Philadelphia households, including 54% of renters and 28% of homeowners, are cost-burdened, meaning they spend at least 30% of their income on housing costs. The situation is particularly acute for renters with incomes below $30,000 per year; 88% of them are cost-burdened. And the city has nearly twice as many low-income renters as housing units they can afford.

“It really paints a grim picture for the future of housing in Philadelphia,” said panelist Rasheedah Phillips, managing attorney for housing policy at Community Legal Services.

In addition to Phillips, the panel included City Councilmember Jamie Gauthier, who represents the Third Council District in West Philadelphia, where the percentage of cost-burdened households is among the city’s highest; Nora Lichtash, who runs the Women’s Community Revitalization Project; and Brian Hudson, former executive director and CEO of the Pennsylvania Housing Finance Agency.

During a wide-ranging, hour-long conversation—conducted Oct. 6 before an online audience of more than 100 government officials, nonprofit leaders, and other stakeholders—the panelists explored several approaches to the affordable housing challenge, particularly as it affects low-income households.

Among the panel’s suggested solutions:

Use zoning to increase affordability and density. Philadelphia has a voluntary inclusionary zoning plan, in which developers are permitted to build additional units on a parcel of land in exchange for making some of those units affordable or contributing to the city’s Housing Trust Fund. Most developers who’ve used the plan have opted for contributions rather than affordable units. Gauthier said she favors a mandatory approach that “strongly encourages developers to build affordable units on-site or in the neighborhood near the development.” Other zoning options discussed by the panelists included modifying zoning regulations to allow rowhouses to be converted into multifamily dwellings, limiting downzoning efforts, and permitting single room occupancy rentals.

Preserve existing affordable units. In this context, preservation means both preventing low-cost units from falling into disrepair and making sure that those designated as affordable—as a result of government subsidies—maintain that status. Hudson said that many units in the city are scheduled to lose their subsidies soon. “You don’t want them to go to market rate, because that exacerbates the affordability issues,” he said. Expanding federal programs for rental vouchers and low-income housing tax credits, and extending homeownership covenants, would support this effort.

Make more city-owned vacant land available for housing. In 2013, the city created the Philadelphia Land Bank to facilitate the transfer of vacant publicly owned properties to individuals or organizations that would put them to use. But the agency, now affiliated with the Philadelphia Housing Development Corp., has moved slowly, disappointing some of the community-based groups that pressed for its creation and hoped to build affordable housing on some of the parcels. The Women’s Community Revitalization Project is one of those organizations; its leader, Lichtash, noted: “We’re the first to say that the Land Bank does not work.”

Consider some form of rent control. There has been some talk in City Council, spurred largely by Councilmember Kendra Brooks, about enacting legislation to protect low-income tenants by limiting rent increases. Opponents argue that this approach would discourage landlords from maintaining their properties—and that the city’s affordability problem is rooted more in low incomes than in high rents. “I will say that the political lift is significant,” Gauthier noted, urging the council to consider some controls on rent.

“We’re never going to build our way out of the crisis that we’re in,” said Phillips. “So it does call for both building new units and getting creative with what we do have.”

Pew’s report on housing affordability found that cost burden is highest in some of the city’s lowest-income neighborhoods, where the housing stock is old and many units are in poor condition. And cost burden is more prevalent among Hispanics, at 50%, and Black residents, at 46%, than among Asians, at 33%, and non-Hispanic White residents, at 32%. A Pew poll of Philadelphians, conducted in August, found that 24% of respondents said they’d had trouble paying their rent or mortgage since the pandemic-related economic shutdown in March.

The report is part of a new focus by Pew’s Philadelphia research and policy initiative on housing affordability and preservation. Earlier this year, Pew examined the declining use of mortgages to finance purchases of lower-priced homes. Research in progress will explore the city’s landlords, the extent of rental regulation in Philadelphia and other cities, and the tangled titles that make it hard for many lower-income households to retain ownership of homes that have been in the family for decades.

Larry Eichel is a senior adviser and Octavia Howell is an associate manager with The Pew Charitable Trusts’ Philadelphia research and policy initiative.

Philadelphia
Philadelphia
Report

The State of Housing Affordability in Philadelphia

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Report

Housing prices and rents in Philadelphia have long been lower than in many other big cities. But over the past decade, as Philadelphia has shifted from a shrinking city to a growing one with an increased demand for housing, officials and advocates have expressed mounting concern about the degree to which the city remains affordable—and for whom. To assess the situation, The Pew Charitable Trusts conducted a detailed examination of housing data from Philadelphia and put the findings in the context of other large cities throughout the country, both the 10 largest high-poverty cities and the 10 most populous.