BUILDERS, COMMUNITY ADVOCATES APPLAUD CITY COUNCIL PLAN TO INCREASE HOUSING AFFORDABILITY IN PHILLY

In Council News, Darrell L. Clarke, Featured, Maria D. Quiñones-Sánchez, Mark Squilla, News by PHL Council

Council Is ‘Putting Philadelphians First’ to Boost Mixed-Income Housing & Lower Barriers to Homeownership

Philadelphia, April 11, 2018 – City Council, building industry leaders, and affordable housing advocates convened on the 50th anniversary of the Fair Housing Act to announce the Putting Philadelphians First affordable housing package, to spur the creation of more mixed-income and affordable housing and to lower barriers to homeownership for City residents.

Council President Darrell L. Clarke (5th District), Councilmember Maria Quiñones Sánchez (7th District), and Councilmember Mark Squilla (1st District) were joined by Leo Addimando, Vice President of the Building Industry Association of Philadelphia (BIA); Maria Gonzalez, Board President of the Philadelphia Association of Community Development Corporations (PACDC); and Rick Sauer, PACDC Executive Director, along with a host of organizations that advocate for safe, quality housing for all.

“Everyone has a right to healthy housing that stabilizes – not strains — their families,” Council President Clarke said. “Middle-class and working families have simply not bounced back from the Great Recession. And while the construction boom has been a welcome development in Philly, rising prices are actually hurting some households. By increasing funding to the Housing Trust Fund by as much as $22 million annually, we are putting Philadelphians first and ensuring that Philly retains its character as a diverse, affordable, and welcoming city.”

The Putting Philadelphians First plan would increase revenues to the Housing Trust Fund, which supports the production and preservation of affordable housing, in order to support the following initiatives: A Mixed-Income Housing Bonus that allows apartment, condominium, and single-family home builders who seek zoning bonuses to either set aside 10 percent of new units at affordable rates for 50 years, or to contribute 1 percent to 2 percent of construction costs to the Housing Trust Fund; and the Philly 1st homebuyers program, which will provide up to $10,000 – or 6 percent of the purchase price, whichever is less – in down payment and closing cost assistance to qualifying residents.

“City Council welcomes economic growth, but as representatives of the people it is our duty to encourage equitable growth, too,” Councilmember Quiñones Sánchez said. “Philadelphia is a city of inclusive, working-class neighborhoods, and we simply cannot allow gross economic inequality to take root here, as it has in other growing cities. Promoting equitable economic growth has been my life’s work, and I want to thank our partners in the building industry and affordable housing communities who helped us develop the Mixed-Income Housing Bonus bill and the Putting Philadelphians First plan to keep Philly affordable.”

Councilmember Squilla added: “I’m proud that City Council is taking a proactive approach to helping people who are struggling with rising housing costs and incomes that are not keeping pace. The Philly 1st program will give Philadelphians of modest means the tools they need to achieve the stability and peace of mind that come with homeownership – whether they are younger people looking for a place to raise their families, or older renters looking for a place to settle down.”

The Philly 1st program offers financial assistance to prospective homebuyers whose incomes are at or below 120 percent of Area Median Income ($65,996 for the greater Philadelphia region). Eligible participants must be first-time homebuyers or have not been homeowners for at least three years; must have established three years or more of City residency; and must complete a housing counseling program administered by an agency certified by the City or the U.S. Department of Housing and Urban Development (HUD).

Down payment or closing cost assistance offered through Philly 1st will become an encumbrance on the home subordinated to the first mortgage that will be forgiven following 15 years of homeownership. If the homebuyer sells, leases, or refinances the home before the 15-year period is up, the encumbrance will become due and payable.

The Philly 1st program will be paid for by a Construction Impact Tax, a 1-percent levy on new construction costs that will increase revenues to the Housing Trust Fund by approximately $22 million annually.

Residential construction professionals, real estate developers, and housing finance institutions were included in the collaborative process that produced the Putting Philadelphians First affordable housing plan.

“As a group of mostly residential developers, the BIA understands there is a growing need for affordable housing options for a great many people in Philadelphia,” said Leo Addimando, BIA vice president and managing partner of Alterra Property Group. “We support the amendments to Councilwoman Sánchez’s Mixed-Income Housing Bonus bill because they create real economic incentives for developers to build mixed-income housing. And the 1% Construction Impact Tax will fund the development of this housing by both for-profit and not-for-profit developers and add another level of benefit to the City by making the already successful 10-year tax abatement program a funding source for affordable housing.”

Community development professionals also lauded the Putting Philadelphians First plan as an effective strategy for promoting housing equity.

“We’re proud of our work with City Council in crafting creative, workable solutions to address systemic inequalities,” PACDC Executive Director Rick Sauer said. “We believe it is critical to support homeownership so low- and moderate-income families can build wealth, while also expanding resources for the production and preservation of affordable rental housing. Philly 1st will ensure more young people can raise their families here and more older residents who are renting can find a place to settle down.”

“We are excited to see significant funding increases to the Housing Trust Fund made possible by the Putting Philadelphians First plan,” said PACDC Board President Maria Gonzalez, also President and CEO of HACE, a community development organization that supports Latino communities. “Together, the Construction Impact Tax and the Mixed-Income Housing Bonus will ensure that when Philadelphia’s housing industry grows, it grows equitably. When housing becomes less of a strain on households, people can become greater participants in the economy. This package of bills is a great investment in long-term, shared prosperity in Philadelphia.”

Legislation authorizing the Putting Philadelphians First plan will be introduced during the Stated Meeting of City Council on Thursday, April 12th.

More details about the plan can be found in this overview.

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