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For weeks, Mayor Cherelle Parker has vowed to prioritize housing during her second year in office, telling reporters at least twice that she would soon propose a “significant financial investment” to support her goal of creating and preserving 30,000 units during her first term in office.
On Thursday, the mayor put an exclamation point on that promise while delivering her second budget address before City Council.
Under her administration’s $6.7 billion spending plan, Parker wants the city to borrow $800 million in bonds to support the Philadelphia Housing Opportunities Made Easy, or H.O.M.E, initiative, a multifaceted strategy rooted in expanding the city’s supply of market-rate and affordable housing.
If approved, Parker claimed it would be the largest-ever investment in housing in the city’s history.
“Let me be clear: We started this work on day one and will not spend years in planning mode,” Parker said. “Philadelphians need more housing and they need it now.”
The mayor’s proposal calls for borrowing $400 million at a time. During a press briefing Wednesday, Finance Director Rob Dubow told reporters the city would “likely” borrow the first $400 million sometime this fall, and that the rest of the money would come in November 2027.
Under the mayor’s proposal, another $11 million would go to the Department of Planning and Development to hire more people to help implement the H.O.M.E initiative, which will be partially funded by making a “small” increase to the city’s real estate transfer tax.
At the same time, Parker wants to eliminate the city’s construction impact tax, which imposes a 1% levy on certain residential construction projects. She said nixing the controversial tax would help “incentivize the building of new housing.”
The mayor said Thursday her full housing plan will be detailed during a special session of City Council scheduled for March 24 — what she referred to as “D-Day for housing.”
“I have long said that this plan — housing preservation and building of new — will be one of our ‘Maynard moments’ — referencing the late Atlanta Mayor Maynard Jackson, who created real, tangible and ongoing economic opportunity for Atlantans,” Parker said.
Thursday’s budget address received mixed reactions from housing advocates. While some praised Parker for her proposal amid an ongoing affordable housing crisis, others questioned its feasibility as the city faces federal funding cuts.
Shawmar Pitts, co-managing director of Philly Thrive, said the budget proposal does not do enough to address what he called the city’s “housing safety crisis.”
Along with One PA and Renters United, Philly Thrive is calling for the city’s next budget to include $10 million for proactive inspections for rentals and an additional $10 million to improve housing conditions for low-income homeowners.
“The city needs to invest in programs that make needed repairs to keep low-income residents in their homes — not give handouts to corporate developers,” Pitts said. “Keeping people in their homes stabilizes communities, and making those homes safer supports healthy families.”
Thursday’s budget address comes less than a month after Parker formally launched the H.O.M.E initiative, a plan rooted in a promise made while she was campaigning.
For now, the initiative lacks specifics, but Parker has previously shared some of the broad strokes.
During a news conference last month, the mayor told reporters she wants to make it easier for real estate developers to build new housing, incentivize housing revitalization projects, prevent housing instability and improve access to mortgage rates, among other goals.
Under the initiative, which Parker has referred to as “Mission 30,000,” the administration will count homes and rentals, regardless of price point or how they are funded. They can be housing units built by private real estate developers, subsidized units operated by the Philadelphia Housing Authority, homes repaired with the help of state or city funding or so-called “naturally occurring” affordable housing.
Budget Director Sabrina Maynard on Wednesday said that private real estate developers are “generally taking care of the market-rate piece,” and that the administration would largely focus on helping residents making between 30% and 60% of area median income, or AMI. That translates to $34,410 and $68,820 for a family of four, according to state data.
PHA, the city’s largest landlord, is poised to play a significant role in the plan. President Kelvin Jeremiah has said the authority is committed to preserving more than 20,000 units across the city. PHA also intends to support the city’s housing goals with $4.8 billion over the next eight years.
The mayor has convened an advisory group through an executive order to help guide the effort. The group comprises internal and external stakeholders, including affordable housing providers, private and nonprofit real estate developers, and real estate industry groups.
Parker has said she would use parcels controlled by the Philadelphia Land Bank to help expand the city’s supply of affordable housing. She has also vowed to reform the public agency’s land disposition process, which critics say is too complex, opaque and slow.
There is also a perception among community groups and nonprofits that private real estate developers have an easier time obtaining city-owned land from the bank.
It’s been years since the land bank has acquired new properties for disposition.
Since October, the agency has been working to reclaim its priority bid status, a power granted by state law that effectively ensures the agency is the sole bidder when it wants to acquire a tax-delinquent property at sheriff sale. Typically, tax-delinquent properties are sold to the highest bidder, an arrangement housing advocates argue invites speculation in lower-income neighborhoods.
A city spokesperson has said the land bank and the Philadelphia Sheriff’s Office hope to complete those negotiations by the end of June.
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