Mayor Parker’s $800M housing plan to start moving ‘as quickly as possible’
Housing was a focus of her second budget address, with the mayor vowing to get “shovels in the ground.”
Mayor Cherelle L. Parker touted her plan to pump $800 million into housing programs Thursday during her second budget address to Philadelphia City Council.
Half of the money would become available almost immediately, she said.
Parker promised “all the details of our proposed housing plan” will be revealed in 10 days’ time at a special session of City Council on March 24 — “the D-Day for housing.”
Parker has promised to have 30,000 units of housing built or rehabbed during her time in office. To fund the work, her budget calls for an increase to the realty transfer tax from 3.278% to 3.578% of the sale price or assessed value of a property.
“A small increase to the realty transfer tax will generate $173 million over the next five years,” Parker said. “When we need to build or preserve 30,000 units of housing, this revenue will help us to get there.”
The mayor said that the administration would begin by issuing $400 million in bond financing in the 2026 fiscal year and that they will move fast on these housing policies.
“We plan on spending that money as quickly as possible,” Parker said. “I want shovels in the ground.”
Parker said she would not “play politics” with housing policy and would not “pit the have-nots against those who have just a little bit.”
The mayor was referring to a long-standing debate in local politics between those who want to spend the city’s extremely limited resources on housing for the lowest-income Philadelphians — a fifth of the city’s population lives in poverty — and those who want to also promote so-called workforce housing for families with slightly higher incomes.
At a media briefing on the budget Wednesday, administration staffers told reporters that the new programs would largely target lower-income residents who make between 30% and 60% of area median income (AMI), or roughly between $34,000 and $68,000 for a family of four.
“The city’s market is taking care of the market-rate piece, but the bulk of the unmet demand in the city is in the area median income 30% to 60% range,” Sabrina Maynard, the city’s budget director, said at the budget briefing.
The Parker administration has said that building new homes is just one piece of their housing plan. Home repairs will also be a big focus, which is especially important in an old city with an unusually large number of lower-income homeowners.
“While more low-income housing is welcome, we are not going to be able to build our way out of the housing safety crisis,” said Shawmar Pitts, co-managing director of Philly Thrive, a Southwest Philly housing justice group. “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.”
Parker also highlighted that she would seek to eliminate the construction impact tax, created in 2019 to fund community development programs favored by Parker and former City Council President Darrell L. Clarke. Administration staffers said the tax hadn’t raised significant revenue, bringing in less than $4 million annually and that it dampens development.
“We can incentivize the building of new housing by removing this levy,” Parker said during her speech.
The Building Industry Association (BIA), an influential advocacy group for residential developers in Philadelphia, heaped praise on Parker’s speech and the policy proposals she outlined.
“With the announced $800 million bond, elimination of the construction tax, and the new set of policies and recommendations announced on March 24, housing production — including affordable housing — will be on steroids,” said Mohamed “Mo” Rushdy, president of the BIA.