PHILADELPHIA CITY COUNCIL 1,500 NEW AFFORDABLE HOUSING UNITS INITIATIVE

031714 afi2

031714 afi2

Philadelphia, March 17, 2014 Flanked by community and construction leaders, City Council President Darrell L. Clarke (5th District) on Monday announced the launch of the 1,500 New Affordable Housing Units Initiative, which will address the related crises of severe affordable housing shortages and growing income inequality and socioeconomic segregation across Philadelphia.

The 1,500 New Affordable Housing Units Initiative will generate $681.8 million in economic activity and create 4,248 jobs by leveraging untapped state and federal funds available to the City of Philadelphia, along with the City’s substantial stock of vacant land, in order to build 1,000 new rental units and 500 new ownership units in strategic locations, called Opportunity Zones, across Philadelphia.

In 2012, for every 100 extremely low-income renter households in Philadelphia there were only 37 available affordable rentals units, according to the nonpartisan Urban Institute in Washington, D.C. In total, there were 43,700 affordable and available rental units for 117,578 extremely low-income renter households in Philadelphia.

“The 1,500 Affordable Housing Units Initiative is designed to supplement what is clearly an uneven economic recovery,” said Council President Clarke, whose district includes Rittenhouse Square, Strawberry Mansion, Brewerytown, and Francisville. “Most of the units currently being built in Philadelphia are not affordable to the vast majority of residents. City Council proposes a smarter, more strategic partnership among local, state and federal entities to spur creation of affordable housing opportunities in communities where property values are on the rise and out of reach for many.”

The primary goals of the 1,500 New Affordable Housing Units Initiative are:

  • More effectively utilize state and federal housing funds that are allocated to the City but are not used to their maximum potential or at all;
  • Kick-start revitalization in blighted neighborhoods by developing affordable rental and ownership units on publicly owned land;
  • Promote and maintain sustainable mixed-income communities by developing affordable rental housing and affordable ownership units on publicly owned land in rapidly gentrifying areas;
  • Convert publicly owned land into taxable properties, owned by a taxable entity, providing an additional annual property tax revenue stream to the City; and
  • Create jobs, both construction and construction-related, in addition to post-construction jobs in managing and maintaining the affordable rental units.

As partners in the 1,500 New Affordable Housing Units Initiative, the Philadelphia Building and Construction Trades Council has agreed to offer an unprecedented reduced rate to the City of Philadelphia in order to spur construction and development of the housing units for the initiative.

“Creating healthier communities across Philadelphia is undoubtedly great for our businesses and for the City’s economy. But apart from the bottom line, we in the housing and construction industries believe City Council’s 1,500 New Affordable Housing Units Initiative is the right thing to do for the people of Philadelphia,” said Pat Gillespie, business manager of the Philadelphia Building and Construction Trades Council.

“Philadelphia’s economic future is tied to the fate of its neighborhoods. We must do all we can to promote strong, vibrant communities for the health of our City,” said Anne Fadullon, president, of the Building Industry Association of Philadelphia. “We are proud to partner with the City of Philadelphia in this important effort and to offer our assistance and support.”

“More opportunities for safe and affordable housing will help strengthen middle class families in Philadelphia. The anticipated multiplier effect of the 1,500 New Affordable Housing Units Initiative is remarkable,” said Rose Gray, president of the Philadelphia Association of Community Development Corporations and senior vice president of community and economic development at Asociación Puertorriqueños en Marcha (APM).

Rahim Islam, president & CEO of Universal Companies added: “Cities everywhere are grappling with rising income inequality and affordable housing shortages. Philadelphia will be a model of what can be accomplished when the public and private sectors cooperate for the overall good of a City.”

According to an Econsult Solutions analysis commissioned by City Council, the economic and fiscal impacts of the 1,500 New Affordable Housing Units Initiative include:

  • One-time construction-related economic impact of $681.8 million, supporting 4,248 jobs generating an aggregate of $416.8 million, and adding $518.1 million to Philadelphia’s GDP (value added);
  • A one-time fiscal impact of $26.9 million in revenue to the City from the economic activity generated by the construction of 1,500 housing units;
  • Annual ongoing economic impact of $11.5 million in output, supporting 118 jobs, $5.2 million in labor income, and adding an additional $9.6 million to local GDP;
  • An estimated $136.5 million in value added to the property tax base, resulting from both additional units ($28.5 million) and positive spillover effects of eliminating blight ($108.5 million).

The number and locations of Opportunity Zones identified for the development of new affordable housing using vacant, publicly owned land are as follows: two in the 1st Council District, one in the 2nd Council District, one in the 3rd Council District, two in the 4th Council District, one in the 5th Council District, three in the 7th Council District and two in the 8th Council District.

“Not enough of the neighborhoods we represent are reaping the benefits of the economic recovery. This City Council is taking a proactive approach to the affordable housing crisis and the widening income gap in Philadelphia,” said Councilman Mark Squilla (1st District), Councilman Kenyatta Johnson (2nd District), Councilwoman Jannie Blackwell (3rd District), Councilman Curtis Jones, Jr. (4th District), Councilwoman María Quiñones Sánchez (7th District) and Councilwoman Cindy Bass (8th District) in a joint statement. “We invite and welcome the participation and support of Mayor Michael Nutter and his Administration in the 1,500 New Affordable Housing Units Initiative.”

“The affordable housing crisis and growing income inequality are undeniably linked. Right now, Philadelphia has a great opportunity to reverse these negative trends and become a national model for how to strategically deploy public assets in order to promote healthier, more productive communities,” Council President Clarke added. “No one should have to work 95 hours a week just to afford a place to live. That is a sad reality of the housing and job markets in Pennsylvania. We in Philadelphia must do all we can to reverse these negative economic trends for the future of our City.”

According to the nonpartisan, Washington, D.C.-based National Low Income Housing Coalition, a worker earning the minimum hourly wage of $7.25 in Pennsylvania would have to work 95 hours per week, 52 weeks for year, in order to afford a two-bedroom apartment at the Fair Market Rent (FMR) of $895 per month. In Philadelphia, the average renter would have to work 1.3 full-time jobs in order to afford a monthly rent of $895.

Click to view the report, City Council – Building An Affordable Future.

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