In June of this year, Councilwoman Maria Quinones-Sanchez of Philadelphia’s City Council introduced Ordinance No. 170678 to require all new and renovated residential development projects in the City of over 10 units to include at least 10% of the project units as “affordable”.  Under the terms of the ordinance, at least 25% of the affordable units have to exists on the project site, while the other 75% can either be built elsewhere or be addressed via a payment into the City’s Housing Trust Fund.  Since the ordinance’s introduction in June, Councilwoman Quinones-Sanchez has been in dialogue with a number of stakeholders, with a hope to have the ordinance brought to a vote in City Council prior to the end of 2017.  The proposed ordinance addresses both new projects and renovations which will be defined to cover alterations costing in excess of $7,000 per housing unit and requiring a zoning permit.  The ordinance also provides for limited increases in density, as implied compensation to developers which provide affordable housing.

Philadelphia, Pennsylvania skylineSupporters of the ordinance argue that it is required to address significant gaps within the City for affordable housing for the many poor residing in Philadelphia, and that the proposed ordinance fairly balances the interests of developers with broader public policy requirements.  Those who object, which includes the local chapter of the Building Industry Association, argue that the requirements are erroneous and inappropriately place upon residential real estate developers the obligation to address a policy concern better met by the broader body politic.

Among the potential variables, and areas that may be subject to amendment in the ordinance, are how many units of affordable housing should be required, whether they should be required on or off site, the extent to which such requirement should apply to renovations, and what corresponding inducements or benefits should be made available to developers in the character of increased density or other types of cost offsets.

In the City of Philadelphia, developers must come to terms with several issues which can increase development costs, including a variety of zoning requirements to provide parking, requirements in certain circumstances to provide economic opportunity plans in connection with projects, and a local norm in Center City development of utilizing union labor.  Some are concerned that the additional imposition of required affordable housing would tip the balance and end or significantly curtail residential development.

In a city with an active housing authority and other public or quasi-public organizations promoting housing opportunities for the poor, a question is presented regarding the appropriateness of achieving a laudatory public policy goal through the imposition of requirements upon a small sector of private business owners.  If the objective of providing housing to the poor is one adopted by local government, should it not be addressed directly via explicit taxing and spending policies, instead of indirectly through the zoning code?  This is the question which will be addressed in hearings and debates soon to occur in Philadelphia City Council.

 

Effective July 1, 2017, the City of Philadelphia established a single Department of Planning and Development.  The Department will have three divisions.  The Division of Planning and Zoning will include the Art Commission, the Historical Commission, the City Planning Commission, and the staff for the Zoning Board of Adjustment.  The Division of Development Services will include the development services group which had previously been a part of the Commerce Department.  Lastly, the City’s office of Housing and Community Development, the Philadelphia Housing Development Corporation and the Philadelphia Land Bank will be organized within the Division of Housing and Community Development.

Philadelphia Skyline
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The idea for the reorganization has been promoted by City Council President Darrell Clarke since 2015 and was approved by the voters as a charter change in November of that year.  In connection with the establishment of the new Department, the Land Bank and the Historical Commission, along with the Development Services section will increase staff.  The remaining sub-groups will not enjoy staff increases.

Within the new Department, particular attention will be paid to the Land Bank which has enjoyed only limited success since its creation in 2013.  While the Land Bank faces challenges associated with assuming duties previously held by a range of departments and agencies, its most acute challenge is likely securing approval for transactions from City Council, particularly in light of the Council’s historic informal policy (known as councilmanic prerogative) of requiring approval from the District City Councilperson in connection with the sale of city property.

The different city offices and agencies which are being coordinated within this single Department will not immediately relocate, so the Department’s offices will continue to be spread among different floors of 1515 Arch Street and 1234 Market Street.  This unorthodox approach will present management challenges to the Director of the Department, Anne Fadullon.

When the Philadelphia Zoning Code was amended in August, 2012, a Transit–Oriented Development (“TOD”) Overlay District was included.  Such districts have become increasingly favored by urban planners as a way to encourage development adjacent to transit hubs, with associated increase in the use of public transit and a decrease in reliance upon private transportation.  However, the provision included in the 2012 Zoning Code proved cumbersome, and during the intervening 4+ years, no parcel in Philadelphia has been so designated.  In response, Councilwoman Blondell Reynolds Brown and Councilman Bill Greenlee jointly introduced on February 23, 2017, a new ordinance amending the TOD overlay (ordinance # 170162).

Public transit
Copyright: 06photo / 123RF Stock Photo

The main objective of the proposed new Overlay District is to both simplify the application of the TOD and increase bonuses, which would be available to landowners and developers who utilize it. To achieve the simplification, the Overlay District would apply to any parcel located within 500 feet of a designated transit station.  It is anticipated that stations will be so designated only by action of City Council, and presumably only after approval of the District City Council person in whose district the TOD will be designated.

There will be a development bonus of 30% of the otherwise permitted FAR for parcels located in the TOD.  Furthermore, bonus FAR is available for green buildings, next income housing, provision of public space, provision of underground parking, and certain transit connections.  Where bonuses of 150% are available, generally, in the Philadelphia Zoning Code for provision of such items, in the TOD, bonuses can be accumulated allowing for an increase of FAR of 200%.

One interesting provision of the proposed new ordinance is that for the first time, Philadelphia would impose a maximum amount of parking which can be made available in connection with a project.  This change will be welcome by planning professionals, who hope similar provisions will be applied in Center City.

It is certainly unclear whether or not City Council will pass the ordinance in the form introduced, but if passed, the City’s planning professionals will seek to convince members of City Council to designate a small number of pilot TOD districts, which will be tested to see whether increased development can be triggered by this approach.

As of this blog post, City Council’s Rules Committee has not scheduled the ordinance for a public hearing.  It appears that usual, short-term concern about parking availability may delay the implementation of this forward-looking approach.