What Belongs on the 'Growth Machine' Agenda for Housing in Philly? (Part 2)

(5th and Spring Garden | Photo: Jon Geeting)

Part four of our now-five-part series about the prospects for "Growth Machine" coalition politics under presumptive Mayor Cherelle Parker looks at some of the municipal pro-housing policies that could unite the different constituencies with a shared interest in more economic growth, jobs, and tax revenue. In our last newsletter we reviewed the recent political context and the opportunities for improving the regulatory environment around housing production, especially at the state level, and this week we look at some of the best opportunities for municipal pro-housing policy changes and legislation. 

Cherelle Parker's Pledge for 30,000 New Attainable Homes

(Photo Credit: Tyger Williams | Philadelphia Inquirer)

Presumptive mayor Cherelle Parker didn't go on the record with too many housing policy stances during the 2023 campaign, but there was one big public pledge she made that should get more supportive attention from Growth Machine coalition organizations.

Stephen Williams of the Philadelphia Tribune wrote back in April about a Philadelphia Housing Authority Mayoral forum where Councilmember Parker pledged to appoint a housing czar and engage the Philadelphia Building Trades on a plan to build 30,000 affordable homes.

"All of the candidates agreed that paying 30% of a family’s income on housing, means that the family is “cost burdened,” according to the federal government.

They offered various solutions, but only Parker said she would create a position of housing czar to advocate for affordable housing and plans to engage the Philadelphia Building and Construction Trades unions to build 30,000 affordable homes."

As we've argued elsewhere, having a large arbitrary round number like 30,000 homes to plug into all the various city housing plans is exactly what the situation calls for.

More and more, big city Mayoral candidates have been making these kinds of commitments and setting ambitious goals for population and housing growth.

In Philadelphia's Mayoral primary, only 7th District Councilmember Maria Quinones-Sanchez had committed to set a population goal of 2 million Philadelphians, but Cherelle Parker was the only candidate to pledge a specific housing goal.

What's the big deal about a big number?

The next Mayor will oversee a major Comprehensive Plan update and will also be involved in a lot of agency goal-setting for housing production. Having a policy goal like 30,000 affordable homes to plan for should impact the types of recommendations that the Planning Commission makes for neighborhood zoning remapping and other changes. 

For a recent example of how this could look in reality, New York City's Council Speaker Adrienne Adams—backed by several unions like SEIU 32BJ and the Laborers Local 79, among others—recently unveiled a Fair Housing Framework that would include both a citywide housing production target and "Community District" housing targets that would be set based on metrics like access to opportunity, displacement risk, infrastructure capacity, and climate change vulnerability. 

Having the Philadelphia Mayor's office—and perhaps eventually state government—issue similar housing production targets for City Council Districts or Planning Districts in the next Comp Plan that all add up to the 30,000 homes goal could go a long way toward changing the politics of housing supply.

Over the last several years, housing politics has become much more of a negative-sum game where each neighborhood looks to the other neighborhoods that are most successful at blocking housing—usually Society Hill or Chestnut Hill or other "Hill" neighborhoods—and asks their District Councilmember "why not us too?"

To make any political headway, there needs to be a new moral framework established where the expectation is that every neighborhood must do its fair share, and no one is allowed to defect. District housing targets based on the 30,000 homes number would help advance the moral logic of everyone doing their fair share. And it's also easy to track whether different places are making progress and may need more targeted intervention.

One important outstanding question has to do with exactly what Councilmember Parker might be counting as "affordable housing" for these purposes. This is a term that can mean very different things to different audiences.

Typically what's considered affordable housing is limited to housing that costs 30-80% of the area median income (AMI). But the definition can sometimes be so broad as to include "workforce housing" which is priced at a somewhat higher Area Median Income (AMI) band, usually between 80-120% AMI, that includes more middle-class residents. There's also heated debate around the use of city AMI or regional AMI to set the income thresholds and other wonky details. 

This topic was the subject of a City Council controversy back in 2018 during the debate over how the proceeds of a new construction tax would be spent. In her role as 9th District Councilmember, Cherelle Parker was one of the members who supported the creation of a new sub-fund of the Housing Trust Fund that could be used to support 120% AMI workforce housing too. As Jake Blumgart wrote at the time:

"The higher area-median-income target is seen as necessary to guarantee the votes of council members who do not represent city neighborhoods plagued by extreme poverty but that have nonetheless been struggling since the Great Recession and have not been part of the recent wave of reinvestment in the city.

Councilwoman Cherelle Parker is a champion of these “middle neighborhoods” and is seen as one of the swing votes that needs to be kept in the pro-construction-tax column to guarantee a veto-proof majority."

Some people and organizations have taken to using the phrase "attainable housing" to refer to a broad range of lower-cost housing types that includes regulated affordable housing, but doesn't exclusively refer to that.

Given the funding realities and the costs of developing LIHTC housing and other deed-restricted affordable housing, it would be smart for the incoming Parker administration to adopt the "attainable housing" definition for the purposes of fulfilling their 30,000 Homes pledge, since it would make the goal actually achievable within two terms, in part by allowing the administration to count a lot of relatively lower-cost market-rate development as progress toward their goal.

Transit-Oriented Development

(Front St in Fishtown | Photo: Jon Geeting)

Once a citywide housing goal has been adopted and District housing targets have been issued, the question turns to where to put the 30,000 new units of housing. 

This goes back to one of the central political questions from the first section of this series, which is how to align the interests of Cherelle Parker's base of voters, and her base of institutional campaign supporters. 

From that perspective, some of the more sensible places for policymakers to target for new housing are Center City and the surrounding neighborhoods, areas served by high-frequency transit, and neighborhood commercial corridors.

The Business Improvement District (BID) Alliance's 2023 platform called for some housing policy changes along these lines, with the goal of boosting customer foot traffic for commercial corridor businesses, many of which are co-located with high-frequency transit. Presumptive Mayor Cherelle Parker has had a long-standing interest in supporting neighborhood commercial corridors, and could potentially be aligned on those grounds. 

The citywide housing supply issue where there is the greatest political alignment across all sides of the policy spectrum though is “transit-oriented development” or TOD. This is an awkward term that basically means allowing denser buildings with less parking on the land that’s most walkable to and from transit stations. 

Philadelphia has a lot of places that aren’t well-served by frequent transit, but some areas have really good access, and the point of TOD is to say that in neighborhoods that do have good transit access, it should be broadly legal to build multi-family housing for people who don’t want or need a car.

Under most cities' TOD laws, it’s still legal to build an apartment building with a lot of parking, but it’s also legal to build one without any. The best practice is to create a radius of around ¼ to ½ mile around transit stations where such buildings would be allowed.

There is a big gap currently between the high levels of stated enthusiasm for this concept in official city housing policy world, and the very low quality of Philadelphia’s actually existing TOD ordinance. 

Philly has a TOD overlay option where Councilmembers can opt-in individual stations, but only a few have done this. The affected radius is also just 500 feet from the station entrance—often not even large enough to reach the end of the city block the station sits on—and the legislation also only reduces parking mandates by 50% within that zone rather than removing them completely. 

The Kenney administration's 2021 Transit Plan recommends including all city transit stations in the TOD ordinance, changing the radius to 2,000 feet from the current 500 feet, and zeroing out regressive parking mandates within TOD zones. If enacted by Council, this would fix most of the misguided ordinance language that still promotes less housing and more parking close to transit. 

As usual, the sometimes-visible, sometimes-invisible obstacle to getting all this right is parking. It is tempting to want to avoid poking this particular badger, given how explosive parking politics can be, but it is hard to overstate the importance of this to the success of the pro-housing supply political project. 

The lesson out of cities like Seattle, WA and Buffalo, NY that eliminated unaffordable parking mandates is that 60-70% of new housing built there wouldn't have been possible if parking mandates had still been in effect. Fixing the TOD ordinance is a way for the new administration to have their cake and eat it too, unlocking a lot more land for higher-density housing and commercial buildings, while also leaving a lot of the city untouched by that kind of development activity. 

Large Buildings with Staff in High-Resource Areas

In addition to the focus on transit station areas, rezoning more high-cost, high-resource areas of the city for more dense housing and commercial development makes good political sense as a major Growth Machine coalition priority in 2024.

The public costs of over-regulating building are the highest in exactly the places where union construction deals are most viable: the high-cost land around downtown. That’s where the economic surplus is highest, and it’s where there’s more surplus value to be shared between unions and builders.

The politics of the “30,000 affordable homes” pledge should be organized around the idea that every neighborhood must do their fair share to help fix Philadelphia’s housing shortage, but “fair share” is also a relative concept.

Neighborhoods with high housing costs, desirable amenities, in-demand school catchments, and other signals of high opportunity should have an outsized expectation of building more than other places do, to allow more people from the city and region to gain access to those opportunities. 

Where housing costs are highest is where people most want to build large high-cost buildings, which will mostly need to be built with union labor. These will more often be the kinds of buildings that—once constructed—can support an internal staff too, with potential membership growth opportunities for SEIU—another major institutional campaign supporter of the Parker campaign.

There have been a few occasions in New York City over the last decade where coalitions of building trades unions, SEIU, and developers have successfully campaigned together for rezonings in high-resource areas that could support more work for everybody. It’s worth exploring where similar coalitions could come together in Philly to run some rezoning plays in 2024. The East Callowhill Overlay and South Broad Street are two good examples of high-cost areas with capacity for thousands more housing units where similar place-based advocacy campaigns could gain some traction.

Back in 2014 when development politics were a little simpler, 1st District Councilmember Mark Squilla introduced a sweeping bill expanding the map for Center City high-rise zoning to include more of the “Gentrification Belt” neighborhoods encircling downtown. Neighborhood activists in places like Logan Square and Old City strenuously objected to this, as did the Planning Commission at the time, and Councilmember Squilla eventually pulled the bill. 

But in 2024, these kinds of broad-strokes upzoning plays should be back on the agenda. The construction unions who helped win Cherelle Parker the Democratic nomination for mayor are looking at a potential drought of work in the coming years due in part to rising interest rates and material costs, the end of the 10-year tax abatement, and other factors. But some deals will still work, and others potentially could work if some of the other input costs—including zoning, city agency delays, etc —could be reduced through City Council legislation or agency-level changes to policies and practices.

Many of these sources of pre-development costs and delays have actual political constituencies behind them, and they didn't all just come about through happenstance or inertia. And while easing off on local housing suppression policies is about as close to a free lunch economically speaking as anybody's likely to come up with, politically speaking that is not the case.

What some of the policy agenda items discussed here have in common is that they could help resolve the political challenges of allowing more housing growth by redirecting higher-density buildings to some specific areas—greater Center City, transit station areas, and commercial corridors—while reducing building pressures on some of the neighborhoods where Councilmember Parker ran the strongest, and who have sometimes been more skeptical of new housing construction.

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  • Jon Geeting
    published this page in Blog 2023-08-07 11:27:21 -0400