(Amazon HQ1 | Photo: Jon Geeting)
Philly has tended to lag many of our peer cities in job growth since the Great Recession, but this week we got some good news from real estate research firm JLL about the city's jobs picture that shows we've at least made some big improvements on our own past performance.
From their weekly Snapshot blog post:
The current market cycle has pushed Philadelphia into new economic territory: for the first time since the 1970s, the city has added jobs above and beyond the prior recession’s peak job levels, which occurred in 2008. Overall job growth for the city varies between 5.5% and 12.6%, depending on the source cited [...]
However, not all of our economic centers are created equal when it comes to job creation. The Navy Yard, Market Street East, and University City have all added jobs faster than the citywide rate, rising 25% to 116% above their prior peak according to the Local Employment Dynamics data produced by the U.S. Census Bureau. While the Navy Yard emerges as one of the brightest spots in Philadelphia’s economy, a note of caution: its total job base is significantly smaller than the rest of the submarkets.
In addition to being great economic news for the city, the fact that Philly added 75,800 jobs in the ten years since 2008 is significant because of Amazon's projection that they would add 50,000 jobs—25,000 less than that—over ten years in the eventual host city selected for their second headquarters.
Some HQ2 skeptics worry that adding 50,000 new jobs in the city over the next ten years would be too much for the city to handle on a number of fronts, like housing costs, the transportation system, the schools, and more. But we already added 34% more jobs than that over the last 10 years, and the effects have been positive for the city on balance, even as growth has also introduced some big new challenges.
Amazon HQ2 jobs would likely be significantly higher-paying on average than the jobs Philly has added since 2008, which makes the need for smart proactive planning for housing affordability extra critical. But the fact that we already added this many jobs, plus 25,000 more, since 2008 should tamp down some of the hyperbole about the downsides of Amazon-fueled growth. Permitting the additional housing required for 50,000 new jobs on top of the existing growth rate just wouldn't be that hard of a policy problem to solve, seeing as we've also done this already.
Consider: if current permitting rates hold through 2020, we're on track to add 28,000 new units this decade, or about 3,100 per year. Assuming an average household size of about 2 people per unit, that's 57,000 people—the equivalent of the 2010 population of the Center City core! And that's just new construction permits, which don't count retrofits of existing structures.
There are a lot of problems left to fix with Philly's zoning code, but it's important not to lose sight of the big picture, which is that our code has largely allowed housing construction to keep pace with demand for housing, without a big chasm opening up like we're seeing in many other large cities. Things could always be better, but it's telling that Brookings rated Philly as having some of the most favorable conditions nationally for absorbing new housing demand from HQ2.
It's true that a big ramp-up in economic growth, either from Amazon or the ongoing concentration of growth in large metros, is going to cause some additional problems in addition to the benefits, but there's no substitute for trying our best to manage our problems, and this underscores the importance of electing new leaders to local government who are suited to managing the challenges of a growing city rather than stewarding the decline of a shrinking one.
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