An uptick in sales that could result in fewer affordable units
Lichtman is not the only landlord who put their property on the market during the pandemic.
Nearly 21% of Philadelphia landlords listed a property for sale in 2020 compared to 3.5% in 2019, according to a recent survey by researchers at the University of Pennsylvania and Harvard University. Property sale listings were up in all 10 cities included in the August report, but Philadelphia had a bigger year-over-year jump than the aggregate — 3% to 13% in 2020.
While a greater share of larger landlords with 20 or more units in Philadelphia listed their properties for sale, small landlords with one to five units were also looking to get out. Roughly 20% of them, a figure coauthor Elijah de La Campa called “quite sobering.” In Philadelphia, landlords who own fewer units provide the bulk of the city’s affordable rental stock.
The report found that landlords who collected less in rent in 2020, most likely as a result of the pandemic, were much more likely to list their properties for sale. That was not the case before COVID-19 hit the country.
And yet it’s unclear what all this says about Philadelphia’s affordable rental market going forward, a market housing advocates considered far too small long before the pandemic. The survey didn’t ask landlords why they decided to list their properties.
Longtime landlord Carolyn Boxmeyer is another Philadelphia owner who recently listed her building, one of four she owns. She said she is selling the Fishtown property because she’s sick of dealing with the city. “They kept raising the taxes and raising the taxes and creating more and more hoops to jump through to even have a rental property,’” Boxmeyer said.
Even without understanding exactly why the sales trend has taken hold, the report’s co-authors agree the change in the market could ultimately translate to fewer affordable rental units in Philadelphia.
They say the share of Philadelphia landlords listing properties for sale is a significant stand-alone statistic, in part because people don’t generally put properties on the market for curiosity’s sake.
“Listing your property for sale is not a costless transaction. You have to get a realtor. In some cases, you have to actually list it and advertise it. And there’s money involved in doing these sorts of things. So I think that this indicates real intention in moving these types of units,” said de la Campa.
That means the city’s already limited stock of affordable rental units could potentially shrink because buyers may not want to maintain these properties as affordable housing, he said. Depending on where the building is located, it could be far more lucrative to turn them into market-rate apartments, for example.
Vincent Reina, a University of Pennsylvania professor and the faculty director of The Housing Initiative at Penn, agrees that a major implication of the survey is that Philadelphia could lose affordable rental units in the long term. A bigger red flag, however, was an increase in the number of landlords who reported they deferred maintenance on their properties last year, he said.