The mayor of Pennsylvania's largest city wants to spend $2 billion building new housing units and giving facelifts to homes already there.
Philadelphia Mayor Cherelle Parker said this week that her Housing Opportunities Made Easy — or HOME — plan would offer matching grants aimed at preserving 16,500 homes in the city. Money generated from the plan would help produce 13,500 new housing units, the mayor said.
The HOME plan also includes creating a city-managed mortgage program aimed at helping first-time homebuyers at a time when Philadelphia has experienced a sharp decline in homeownership.
"This is the largest single investment in housing in Philadelphia's history," Parker told city lawmakers Monday. "I want shovels in the ground. I want houses built, preserved and restored."
Parker announced her housing plan earlier this year but funding details were not disclosed until Monday. Under the plan, the city would raise its realty transfer tax over the next five years to generate $173 million. The city would also issue $800,000 in bonds to help fund the housing plan.
To be clear, Philadelphia City Council members still need to approve those moves before shovels can hit the ground. Councilmember Jamie Gauthier said in a statement Monday that she looks forward to refining the mayor's plan.
"We must use this once-in-a-generation investment in housing to give those who need our help the most their fair share," Gauthier said in the statement. "This means building genuinely affordable housing and expanding existing municipal programs that serve working families."
Following a national trend
In many ways, the Philadelphia housing market mirrors what has been happening nationwide. Rising home prices and low inventory, combined with mortgage rates near 7% and an uptick in new residents, have made homeownership increasingly unaffordable for Philadelphians.
Median home prices in the Philadelphia-Camden-Wilmington area grew from $289,986 in February 2020 to $350,000 last month, according to the Federal Reserve Bank of St. Louis. During that same time frame, the number of homes available to sell dropped from 13,203 to 8,732.
Those factors, and others, have caused a sharp dip in homeownership, according to a 2024 analysis from Pew Trusts. The city's homeownership rate fell from 59% in 2000 to 53% in 2021 and that's "largely because the city added rental units, while the number of owner-occupied homes remained essentially unchanged," Pew researchers said. Home prices have increased in every Philadelphia neighborhood between 2000 and 2021, but household incomes did not keep pace with the growth, the Pew report concluded.
City's population is growing
Philadelphia is the nation's sixth-largest city, with more than 1.5 million people. Thousands of new residents flocked to the City of Brotherly Love between 2023 and 2024, new U.S. Census Bureau estimates show.
Developers in Philadelphia are trying to meet housing demand with several rental developments opening recently — including a 630-unit apartment complex on South Broad Street and a 27-story apartment building with 254 units on Sansom Street. Those complexes, however, cannot house Philadelphians from all walks of life, Parker said.
"Philadelphia’s housing stock has grown over the last few years, but it has not grown to meet the market needs across all neighborhoods and income levels, both for those who wish to own and those who wish to rent," the mayor said while addressing lawmakers. " In fact, much of the growth has been clustered in a few places and is only attainable by Philadelphians with higher incomes."
Aside from new housing, Parker's plan calls for creating a database of preferred homebuilders and launching a website that makes it easier for developers to buy properties from the city's land bank. She said her plan would be powered by state and federal funds.