Philadelphia Mayor Unveils Details Of 'Largest Single Investment In Housing' In City History

Mayor Cherelle Parker’s much anticipated housing plan is finally coming into focus.

Philadelphia’s top executive revealed new details about what she called “the largest single investment in housing in Philadelphia history” Wednesday — a $2B package that includes a boost in the city's real estate transfer tax and a simultaneous cut in its construction levy.

Parker's multipart plan includes a councilmanic prerogative workaround to spur affordable housing developments on vacant plots held by the Philadelphia Land Bank.

The mayor also proposed a tax abatement for development in neighborhoods that need more housing, elimination of the city’s 1% construction levy and a 0.3% hike in the city's municipal real estate transfer tax. 

In addition, Parker plans to borrow $800M to fund her Housing Opportunities Made Easy Initiative, which she has long said will build or preserve 30,000 units of housing across the city. She revealed on Wednesday that the figure will include 13,500 new homes and preservation work on 16,500 existing units.

“We plan on spending that money as quickly as possible,” Parker said of the $800M initiative developed with input from former U.S. Secretary of Housing and Urban Development Marsha Fudge, who attended Monday’s meeting. “I want shovels in the ground.”

The mayor proposed issuing $400M worth of bonds, half of the total amount she plans to borrow, by the end of the city’s fiscal year 2026.

But Parker's broader set of housing investments would be worth $2B. Roughly half would come from an array of public funding sources, including the bonds. The remaining $1B or so would come from selling or redeveloping relevant city assets, mainly municipally-owned land.

A Shift In Prerogative And Use Of The Land Bank

Parker’s proposal to redevelop some city-owned properties comes after the Land Bank resolved a longstanding dispute with the sheriff’s office on Saturday, which means the organization can resume purchasing tax-delinquent plots for the first time in five years.

To make the best use of the resource, the mayor floated working with the council to create a list of 1,000 preapproved Land Bank properties that can be sold for housing development with less input from lawmakers. This would only include smaller parcels suitable for single-family or small multifamily developments.

Parker was quick to say she had no intention of tramping on the tradition of councilmanic prerogative, which has long given lawmakers the authority to quash development projects in their districts. This veto power also extends to the disposition of the roughly 4,000 properties owned by the Land Bank.

“I am not trying in any way, shape or form to take away councilmanic prerogative,” Parker said, reaffirming a commitment she made last month.

“We need to develop an expedited process where it doesn’t take a piece of legislation to move land out of our Land Bank,” she said. “We will make sure each parcel of land will be developed in conformity with a design standard created by the Department of Planning and Development to ensure that construction is consistent and complimentary with the block.”

The mayor's plans call for compiling a list of preapproved developers to bring these projects to fruition. Parker plans to fill this list with suggestions from an advisory group that includes private developers and organizations focused on housing.

Council President Kenyatta Johnson said he doesn’t think councilmanic prerogative would stand in the way of Parker's plan, though he added that “district council members have a right to make sure that they’re advocating on behalf of the individuals who put them in office.”

Parker also revealed that a new Land Bank website could be live as soon as later this week. The site's updated design is meant to “simplify the process for acquiring property,” she said.

One Tax Cut, Another Increased

Parker also provided more details about her proposal to raise the realty transfer tax from 3.28% to 3.58%, which she expects to bring in an additional $173M, mostly on the back of commercial real estate.

“This small increase in the realty transfer tax will not have a large impact on individuals when they are buying or selling a home,” she said. “The cost of the increase in the realty transfer tax will be much larger for commercial and industrial transactions. For the purchase of a commercial property valued at $50M, the increase would be $150K more at the time of the sale.” 

Parker reiterated support for eliminating the 1% construction impact tax, a measure she broached during her budget proposal speech earlier this month. The levy only contributes about $3.5M to the city’s budget every year, which isn’t a transformative amount of money, according to Finance Director Rob Dubow.

As a boost, Parker said she is considering a tax abatement program focused on neighborhoods in need of more housing, though she didn’t share many details on Wednesday.

While the city has added a large number of new units in recent years as developers rushed to meet the deadline for a tax abatement program that expired at the end of 2021, those projects were concentrated in a few up-and-coming neighborhoods and generally didn’t cater to lower-income renters.

An overwhelming share of last year’s housing completions happened in the 19123 ZIP code, according to a report from the Center City District. The area extending roughly from the Delaware River to Broad Street between Callowhill Street and Girard Avenue accounted for a full quarter of Philly’s new units in 2024.

The Tax Reform Commission convened by Johnson proposed doubling the 10-year abatement for conversion projects as a way to spark redevelopment in Center City’s vacancy-prone office sector. That measure didn’t make it into the mayor’s budget proposal earlier this month and was not mentioned Wednesday.

An Upbeat Reaction

Much of Parker's HOME Initiative overlaps with funding items included in the $6.7B budget proposal she shared with city council last week. The body has since begun negotiations ahead of a final budget vote scheduled for this spring.

Parker’s speech was warmly received by Council Member Jamie Gauthier, who has made affordable housing a keystone of her platform.

“It’s an ambitious plan,” she said. “I think that a lot of our affordable housing crisis is actually a funding issue … The fact that you’ll have $800M-plus to invest in programs that already work is pretty exciting.”

Those existing initiatives include rent assistance for low-income tenants facing eviction and free counseling and down payment subsidies for first-time homebuyers.

But Johnson said lawmakers won’t be blindly backing Parker’s proposal as they finalize the city’s FY2026 budget. There will be a daylong council meeting dedicated to the HOME Initiative on April 21.

“It’s a step in the right direction,” he said. “I’ll talk to my colleagues in city council and we will see what the final product will look like.”

Philadelphia is currently repaying the $1.3B it borrowed to shore up its pension fund in the 1990s. The city’s fund balance is expected to shrink consistently until a balloon payment is made on that debt in FY2029.

Yet Johnson said he wasn’t worried about the $800M worth of bonds Parker proposed, adding the city has demonstrated its ability to borrow responsibly.

“It hasn’t had a significant strain on our city’s budget,” he said. “It hasn’t had a strain on our services either.”