PHILADELPHIA — City Council today voted to approve legislation authorizing $400 million in bonds to finance a massive citywide program that will invest in neighborhood preservation by building more affordable housing, restoring local shopping corridors, assisting first-time homebuyers, helping renters avoid eviction, paying for repairs to existing homes, and multiple other efforts to preserve neighborhoods across Philadelphia.
Called the Neighborhood Preservation Initiative, the bond ordinance passed Council at Thursday’s Meeting, and now goes to Mayor Kenney for his consideration. The mayor has already signaled his support for the large-scale preservation effort, initiated by Council President Darrell L. Clarke (5th District) last Fall, and introduced in Council by Majority Leader Cherelle L. Parker (9th District).
Revenues from a 1 percent Development Impact Tax and a 10 percent reduction in the city’s commercial real estate tax abatement will help pay the interest on the bonds that will fund the Neighborhood Preservation Initiative, or NPI. The program was conceived to address growing economic disparities magnified during the COVID-19 pandemic, including an urgent need for more affordable housing, aid so renters can avoid eviction, assistance to keep residents from becoming homeless, and a myriad of other needs.
“The COVID-19 pandemic magnified economic and racial disparities that have existed for too long in Philadelphia,” said Council President Clarke. “These disparities are growing, and the need to address them is urgent. We need to act to create a more equitable future for every Philadelphian and every neighborhood. City Council is recognizing these needs and acting on them by creating and financing NPI.”
In city budget hearings on Wednesday, Anne Fadullon, the city’s Director of the Department of Planning and Development, told Councilmembers that the Kenney administration was “as excited as you are” to move forward with the goals and initiatives of the Neighborhood Preservation Initiative. Fadullon told Councilmembers in the hearing that her department was conducting a search for a director to supervise the NPI program.
Last December, Council approved the 1 percent Development Impact Tax on residential construction, along with legislation reducing the tax abatement for commercial construction by 10 percent. The Development Impact tax is expected to yield between $9 million and $11.7 million per year, according to projections by Council’s budget staff. The commercial tax abatement reduction should generate an estimated $83 million in revenues for city services and schools over the next decade. Revenues from these two reforms will help pay the debt service for the $400 million in NPI bonds.
The NPI program is also expected to generate a larger burst of economic activity — $2.5 billion-worth – and produce $71 Million in new tax revenues over the first 4 years. It is estimated that it will support over 14,700 jobs with $765 Million in wages.
“We can’t sit by idly and wait for someone to come to our rescue; we must be proactive,” said Council Majority Leader Parker, who introduced the NPI legislation on Clarke’s behalf. “This legislation will generate close to a half billion dollars that will impact the lives of our most vulnerable residents who have been hurt most directly by the coronavirus. It will help those in poverty, prevent those living on the margins from falling further behind, and create sustainable jobs and assist small businesses – which need help right now.”
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