Philly City Council probes Mayor Parker’s housing plan in tense hearing as battle lines become clear

City Council members questioned Mayor Cherelle L. Parker’s plans to pay for her new housing initiative, and whether it will benefit the Philadelphians who most need help, during an at-times tense city budget hearing on Wednesday that revealed political fault lines around Parker’s top priority for her second year in office.

Some members, including Council President Kenyatta Johnson, questioned whether it was prudent for the city to take on $800 million in debt to pay for Parker’s Housing Opportunities Made Easy, or H.O.M.E., program. The progressive faction in Council, meanwhile, supported the administration’s spending goals — but raised concerns about whether Parker’s policy was calibrated to reach families facing housing insecurity.

» READ MORE: Here’s how Mayor Parker plans to spend $800 million on housing

Wednesday’s hearing was notably more fraught than Council’s initial public vetting of the housing proposal two weeks ago, in which members largely applauded the mayor’s focus on housing but pressed for more details.

Parker’s chief of staff, Tiffany W. Thurman, clashed with multiple members Wednesday while insisting that Council needed to act quickly to assuage the city’s longstanding affordability crisis. She noted that federal cuts from President Donald Trump’s administration were spurring many cities to increase local housing spending.

“This is a bold investment, but Philadelphia is not alone,” Thurman said in her opening remarks. “In this uncertain fiscal environment, other major cities such as Chicago, Baltimore, Columbus, Atlanta, Austin, Kansas City, and San Antonio are issuing bonds to pay for essential housing investments and programs as well.”

» READ MORE: Mayor Cherelle Parker pitches her $6.7 billion budget plan as Trump’s ‘grave’ threat to cut aid to cities looms

Parker has asked Council to consider the H.O.M.E. legislation alongside her city budget proposal, which must be approved by the end of June.

Johnson opened the hearing by pressing Parker administration officials on the mayor’s plan to borrow $800 million. He highlighted the cost of interest payments to repay the 20-year bonds, saying he wants to make sure the city is being “fiscally sound.”

“My son is 10 now, so he’ll be 30, probably with kids attending public schools around that time, utilizing city services,” Johnson said. “As we’re addressing this housing crisis, we want to make sure that in terms of… kicking the can down the road — that’s not what we’re doing, right?”

» READ MORE: Mayor Cherelle Parker’s housing plan relies on $800 million in bonds. Here’s what you need to know about Philly’s city debt.

The administration is asking Council to approve two borrowings: $400 million this fall and another $400 million in 2027. Finance Director Rob Dubow told Johnson the city would pay $25 million per year on average in interest to pay for the bonds, a total of about $500 million over two decades.

Johnson was not alone in raising questions about Parker’s bond plans. Multiple members told The Inquirer that they were concerned the administration is saddling future taxpayers with too much debt.

City bonds are typically tax-exempt, meaning investors that buy municipal debt do not have to pay federal income taxes on the proceeds. But Parker wants to issue taxable bonds, which increases borrowing cost for city taxpayers and foregoes taking advantage of one of the most attractive aspects of municipal bonds for investors.

To qualify for the federal tax exemption, bonds must primarily benefit the public, not private sector actors. The administration has said it needs to issue taxable bonds for the H.O.M.E. initiative because much of it involves transferring city-owned land to private developers to build housing.

Councilmember Jeffery “Jay” Young Jr. questioned why the city can’t separate the $800 million into two tranches: a taxable bond issuance for the amount of money that will be used for deals involving private developers, and a tax-exempt issuance for government housing programs.

Dubow said that the city needs the flexibility to shift money between programs and does not want to have its hands tied or run afoul of tax exemption rules.

“I hear that answer, and it’s an answer,” Young said. “I think that we are creative enough to figure out what exact amount we need for the taxable bonds where we won’t have to try to move things back and forth.”

Councilmember Jamie Gauthier questioned the administration’s proposal to greatly increase the income threshold for applicants to the city’s popular basic Systems Repair Program, or BSRP, which helps low-income homeowners afford home repairs.

Philadelphia has an unusually high rate of homeownership among lower-income and working-class households, and the program is designed to help those families. It currently supports residents who make at most 60% of the area median income, or $71,650 for a family of four. It has a lengthy wait list: Last year 10,000 households tried to sign up for the program and were unable to access it.

But Parker wants to increase the eligibility limit to 100% of AMI, or $119,000 for a family of four.

Gauthier, who represents parts of West Philadelphia, noted that expanding eligibility for the program without adding a “commensurate” increase in funding would likely mean fewer of the neediest families will be able to access it.

“Fiscal responsibility is more than just about accounting,” Gauthier said. “It’s also using your resources to make the biggest impact, and using your resources where they are most needed.”

Parker has long said she does not want to pit the “have-nots” against those who just have a little more, meaning that working-class families should benefit from government programs, and not just the most disadvantaged. Gauthier commended that goal, but asked if there was a more subtle way to expand the program that would not open it to homeowners who can afford repairs on their own.

Parker’s chief of staff took umbrage at that line of questioning.

“To suggest that we haven’t done our homework and haven’t thought about those eligibility requirements, that we’re unfurling them to anyone and everyone that applies, is very irresponsible,” Thurman replied.

Gauthier, along with fellow progressive Councilmembers Nicholas O’Rourke and Rue Landau, emphasized that they agreed with Parker’s $800 million bond ask, but suggested that it could be better targeted and that the administration was trying to rush its proposal.

“It demonstrates that we can do big things [but] also a bond is a very expensive investment and it behooves us to ensure that it pays off,” said O’Rourke, a member of the Working Families Party. “I’m really concerned that the plan is spread so thin among 38 different programs. … Wouldn’t it make more sense for us to have a robust engagement process to decide how best to focus funding?”