Council passed a bill that requires affordable units be included in large residential developments in parts of North, West, and Northeast Philadelphia where rents are rising.
3 years ago
At the César Andreu Iglesias Community Garden in Kensington, the words “Not for sale” were painted on the street as a message to developers and the city in June 2020. (Kimberly Paynter/WHYY)
Amid a coronavirus pandemic that exasperated an affordable housing crisis, Philadelphia City Council passed nearly 100 bills in 2021. Not surprisingly, much of the year’s legislative focus was on mitigating that crisis and preparing for the next phase of an ongoing development boom.
Here’s a look at some of the most significant measures that will shape the city’s housing and construction landscape in the new year.
What happened in 2021?
City Council passed two measures — one voluntary, one mandatory — aimed at increasing Philadelphia’s limited supply of affordable housing.
Council unanimously passed a bill that requires affordable units to be included in large residential developments in parts of the North, West, and Northeast Philadelphia where rents are on the rise.
Rooted in a policy tool known as inclusionary zoning, the measure requires developers building a project with 10 or more housing units to set aside 20% of those units as affordable.
Under the bill, affordable means that the units are priced for households earning up to 40% of the area median income, which translates to $37,800 for a family of four.
The new bill only applies in the 3rd and 7th Council Districts represented by co-sponsors Councilmembers Jamie Gauthier and Maria Quiñones-Sánchez, respectively.
“With many developers prioritizing profits, regardless of the social repercussions, the best way for us to ensure that affordable housing options remain available in desirable neighborhoods over the long term is to enact policy change,” said Gauthier in a statement released after the bill passed.
In September, City Council passed a separate but related bill co-sponsored by Gauthier and Quiñones-Sánchez.
Viewed as companion legislation to the inclusionary zoning measure, the bill tweaks the Mixed Income Housing Bonus program, a voluntary program that enables developers to construct larger buildings than allowed under city zoning regulations if they agree to build affordable housing units or contribute to the city’s Housing Trust Fund. The fund provides money for new affordable homes, as well as the preservation and repair of existing homes.
Under the bill, developers must now contribute much more — roughly triple the previous amount — to the Housing Trust Fund if they want to participate in the program, but not build any affordable units.
The provision is meant to incentivize developers to build the units instead of making a contribution to the trust fund.
Since launching in 2018, the opposite has happened, with developers building fewer than two dozen affordable housing units, while contributing millions to the fund to get so-called bonuses to build extra floors or floor space.
“It’s of no comfort that in the Third District and other gentrifying areas, developers just get to build, build, build, not include any affordability and then make a payment into the trust fund that’s a pittance,” said Gauthier.
What’s in the cards for 2022?
The inclusionary zoning bill will take effect six months after becoming law. As of now, it’s with the mayor’s office, awaiting his signature.
Under the bill, the new requirements will not apply to construction projects with zoning permit applications filed before the measure’s effective date.
The mixed-income housing bill took effect immediately after Mayor Jim Kenney signed it into law in early October.
What happened in 2021?
During its final session before the holidays, City Council unanimously passed a bill giving Philadelphia and the courts the authority to extend for another year the city’s Eviction Diversion Program, a nationally recognized initiative credited with keeping thousands of residents in their homes during the pandemic.
It was set to expire at the end of 2021, the expiration date for the latest authorization order from the Supreme Court of Pennsylvania, which has overseen the now-permanent program on an emergency basis.
The program, part of a package of renter protections City Council passed in June 2020, is designed to help landlords and tenants settle disputes over back rent without involving the courts, often through mediation. To date, the program has worked with more than 2,500 landlord-tenant pairs. The overwhelming majority of them — more than 90% — reached an agreement or are continuing to negotiate.
What’s in the cards for 2022?
The bill does not spell out specifics on a permanent version of the program. Those will be hashed out in the new year.
The measure also does not come with any additional dollars to operate the program, and plainly states that it must have “sufficient funding” to continue — in whatever form it takes.
The hope is that more funding comes in the form of more rental assistance dollars from the federal government. The city is awaiting word from the state and the U.S. Department of Treasury on requests for an additional $485 million for its Emergency Rental Assistance Program, an effort launched last May to help landlords and renters experiencing financial hardship as a result of the pandemic.
To date, the program has disbursed more than $240 million to 38,404 households, according to a city dashboard. Some 30,000 applications have yet to be processed, however, and current funding is only expected to last through the end of the year.
If sufficient federal funding is not available, the city says it will adapt the program to focus on mediation between landlords and tenants.
What happened in 2021?
During its final session before the holidays, City Council also unanimously passed a bill that will ask residents via ballot question if the city should overhaul its zoning board, the independent agency empowered to make legally binding decisions about how proposed developments get built.
The ballot question will ask voters whether the city should amend its charter to expand the Zoning Board of Adjustments from five to seven members; require City Council confirmation of the mayor’s appointees to the board; and require that positions be filled by people with professional qualifications and sensitivity to community concerns.
The measure, approved over objections from the Kenney administration, is rooted in concerns that the zoning board has become overly supportive of developers, while diminishing the voices of community organizations.
“The Zoning Board of Adjustments needs to be reformed. We have heard from residents and citizens across the city that their voices — voices of the community — are not being heard by the ZBA as it makes zoning decisions that have a fundamental impact on the quality of life and the character of Philadelphia’s many neighborhoods,” said Council President Darrell Clarke in a statement released before the bill passed.
What’s in the cards for 2022?
The public referendum will appear on the ballot during next year’s primary election, scheduled for May 17. If passed by voters, the proposed changes will take effect Oct. 1, 2022.
Philadelphia voters approve the overwhelming majority of ballot measures, striking down just three of them since the 1960s, according to the good-government group Committee of Seventy.
What happened in 2021?
In October, Mayor Jim Kenney signed into law a bill detailing the first-year budget for the Neighborhood Preservation Initiative, a massive bond-backed program aimed at increasing the city’s stock of affordable housing, reviving commercial corridors, and improving neighborhood infrastructure, among other priorities.
Under the bill City Council passed this fall, NPI’s initial budget will be $100 million, approximately a quarter of the program’s total budget over the next four years. Each year, the money will be divided among more than a dozen buckets, but the majority of the funding will go to building and preserving affordable housing, as well as creating permanent housing for people experiencing homelessness.
NPI dollars will also be used for eviction prevention measures, tangled title support, and making basic systems repairs to existing homes.
“This is going to be the largest, single investment in Philadelphia neighborhoods in city history,” said Council President Darrell Clarke, who conceived of NPI in consultation with senior council staff and council leadership.
The $100 million in municipal bonds was issued by the city at the end of October, said Clarke spokesperson Joe Grace.
What’s in the cards for 2022?
The early part of the new year will be spent allocating the funding to the individual programs comprising NPI, said Grace.
Going forward, the city’s Division of Housing and Community Development will be working with housing counseling agencies to relaunch the Philly Ist Home program in early February.
The initiative provides grants or forgivable loans of up to $10,000 for first-time homebuyers. The money can be used to reduce the principal of homebuyer loans and help cover down payments and certain loan closing costs.
Participants are eligible for loan forgiveness after remaining in the home for 15 years.
Sometime early next year, DHCD is also expected to issue a request for proposals for the development of affordable housing projects that require city financing and will be using Low Income Housing Tax Credits to build, said Grace.
In addition, the Philadelphia Land Bank will be working towards putting together packages of land that can be disposed of for affordable housing projects. Requests for proposals will be issued “soon in the new year,” said Grace.
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