Philly added 8K housing units in 2024. Nearly half of them were in Greater Center City

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New research shows more housing units were built in the Center City area in 2024 than in the previous five years. Most of them went up in a single ZIP code amid a building boom largely fueled by changes to the city’s tax abatement program.

The finding is part of the Center City District’s latest housing report, which focuses on a section of Philadelphia the nonprofit refers to as “Greater Center City.” The area — home to nearly 190,000 residents across eight ZIP codes — covers a group of desirable neighborhoods sandwiched between the Delaware and Schuylkill rivers between Girard Avenue and Tasker Street. The list includes Fairmount, Logan Square, Queen Village and Graduate Hospital.

A total of 3,811 units were completed in the area last year, according to the report. That’s nearly 1,000 more units than the total in 2023, which had been the highest since 2019. The overwhelming majority of them were apartments.

Unusually, more than half of the units were built in the 19123 ZIP code, which sits roughly between Callowhill Street and Girard Avenue, and between Broad Street and the Delaware River. The area includes neighborhoods like Northern Liberties, Olde Kensington and Poplar. It is also home to a busy segment of the Market-Frankford Line and contains burgeoning corridors such as North Broad Street.

“There’s been some focus on infrastructure improvements and new zoning regulations there and it’s all finally starting to take root,” said Clint Randall, vice president of economic development at the Center City District.

The report attributes some of last year’s housing growth in Greater Center City to the surge of building permits filed before the end of 2021. That was the final year property owners could avoid paying 100% of the building’s real estate taxes for all 10 years of the program.

Starting in 2022, the value of the tax abatement began shrinking by 10% each year after the first year.

Researchers expect last year’s growth to slow considerably in 2025 as the “number of projects underway declines.” They predict only about one-third as many units to come online next year, a foreseeable change following an apartment glut that saw high vacancy rates despite high demand. In some neighborhoods, property owners have offered concessions like reduced rent while competing over tenants. Other developers started marketing their units to renters with housing vouchers.

“The drop off in construction allows for a little bit of catch-up time … at least in some of these hot spots that have seen just a flood of new units arrive all at once,” Randall said.

The projection comes as Mayor Cherelle Parker’s administration officially embarks on an ambitious effort to create or preserve 30,000 housing units during her first term. Under the plan, the city will count homes and rentals regardless of price point or how they are funded, meaning they can be market-rate or affordable, privately funded or subsidized.

The push comes as the city continues to experience an affordable housing crisis marked by historically high rents and a limited supply of low-cost units for low-income people.

Tuesday’s report only briefly touches on the city’s housing crisis, noting that 52% of Philadelphia renters were cost-burdened in 2023 — a 3% increase over 2022. The federal government considers someone cost-burdened if more than 30% of their monthly income is used to cover housing costs.

A recent report from mortgage broker Redfin named the Philadelphia metro one of the country’s least affordable for renters.