Bond Issue Will Fulfill $100 Million Commitment to Affordable Housing Preservation
Philadelphia, Oct. 12, 2017 – Council President Darrell L. Clarke (5th District) and Councilwoman Cherelle Parker (9th District) on Thursday moved forward with a bill authorizing a housing repair loan program to preserve existing affordable housing across Philadelphia.
The ordinance authorizing up to $40 million in bond proceeds fulfills a commitment made by Council President Clarke in May 2016 to dedicate a portion of the real estate transfer tax toward critical home preservation programs, and puts Philadelphia on track to become one of the largest U.S. cities to offer home-repair loans to economically stressed homeowners. Philadelphians are already benefiting from City-administered repair, disability modification, and weatherization programs that received a $60 million infusion, also financed by the transfer tax.
“At a time when many cities are in the grip of an affordable housing crisis, Philadelphia continues to spur fair and equitable development – with community engagement, and in the interest of righting historic wrongs,” Council President Clarke said. “Home preservation creates jobs and invites private investment in communities, which expands the tax base, allowing the City to improve services without raising taxes. I’m excited to follow through on my commitment to help struggling homeowners in every corner of Philadelphia.”
“I’m thrilled to be moving forward with such a critical program that will help Philadelphia homeowners who want to responsibly maintain their biggest asset, which is their home, but do not qualify for the city’s income-based grant programs because they make a nickel over the eligibility requirements or whose credit prohibits them from accessing capital,” Councilwoman Parker said. “By repairing existing housing and cutting down on blight, this program is a win for homeowners, middle neighborhoods, and the City of Philadelphia as a whole.”
The ordinance authorizes the execution and delivery of a service agreement between the City of Philadelphia and the Philadelphia Redevelopment Authority (PRA), which will administer the home repair program, and authorizes the PRA to issue bonds to finance the program.
“The Philadelphia Redevelopment Authority is proud to be involved in this important initiative that will provide access to affordable loans for low- and moderate-income Philadelphians to repair and preserve their homes,” said Gregory Heller, Executive Director of the Philadelphia Redevelopment Authority. “This program will help stabilize and strengthen our communities. My team and I are looking forward to working with City Council, community-based organizations, and financial institutions to make this program a success.”
Eligible homeowners may include those whose incomes fall above the minimum required for City repair programs administered by the Philadelphia Housing Development Corporation (PHCD), and whose financial status – due to income, credit rating, or other factors — makes them ineligible for most commercial loans.
The combination of a relatively large low-income population, a high rate of homeownership, and one of the oldest and most historically significant urban housing stocks in the country makes Philadelphia a perfect place to launch a successful public home repair loan program, Council President Clarke added.
“Philly has some of the most beautiful and historic houses in the country, made of materials that are rarely found in new commercial residential real estate. Philly also has neighborhoods that were once thriving communities of choice, but due to the collapse in the manufacturing sector and systemic discrimination, have suffered from disinvestment,” Council President Clarke said.
He continued: “Last year, City Council enacted a ban on employment discrimination based on credit scores, because we know credit histories perpetuate racial and economic inequality. Thanks to our affordable housing working group and community-minded local banks, we are moving forward on a program that will improve neighborhoods, spur economic investment, and ensure more Philadelphians live in healthy and affordable housing.”
In 2016, President Clarke convened an informal affordable housing working group that includes representatives from Council, the Philadelphia Local Initiatives Support Corporation (LISC), Philadelphia Association of Community Development Corporations (PACDC), Habitat for Humanity, Philadelphia Corporation for Aging (PCA), and Healthy Rowhouse Project. The working group continues to collaborate with the City’s housing agencies and lending leaders toward finalizing details of the home repair loan program, with the goal of offering 2 to 4 percent interest and payment terms up to 20 years.
The PRA will also issue a Request for Proposals (RFP) for program intermediaries, who will provide technical assistance to homeowners to ensure successful repayment – for example, by assessing home energy usage, providing guidance on credit score improvement, or teaching long-term financial planning.
Financial partners for the Philadelphia Home Repair Loans Program will be announced shortly.
Read the ordinance: 101217 Clarke Parker PRA Housing Preservation Loan Program
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Council President Darrell L. Clarke is serving his second term as the President of Philadelphia City Council. He represents Philadelphia’s 5th Council District. More information at phlcouncil.com/DarrellClarke
Councilwoman Cherelle L. Parker represents the 9th District, which includes East Mt. Airy, West Oak Lane, East Oak Lane, Lawncrest, Burholme, Olney and parts of Oxford Circle and Logan. She is Chair of Council’s Committee on Labor and Civil Service and Vice Chair of Council’s Committee on Commerce and Economic Development. More information at phlcouncil.com/CherelleParker