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Philly's Mixed-Income Housing Bill Morphs Into Something Even Less Popular

Center City, Philadelphia, in January 2016.

The bill that would require all new multifamily developments to include affordable units has been amended significantly in a move that was met with criticism.

The mixed-income housing bill's sponsor, City Councilwoman Maria Quinones-Sanchez, introduced several amendments before it arrived before the Philadelphia Planning Commission on Tuesday, when the group voted to recommend delaying it, PlanPhilly reports.

The original version of the bill mandated that 10% of all new units built in developments containing more than 10 apartments be designated as affordable. Now, the bill only applies to areas zoned RM-4, RMX-3, CMX-3, CMX-4 and CMX-5 — the heaviest zones, almost all of which are within Center City and University City. Including affordable units would no longer be mandatory under the new bill.

Instead of mandating the inclusion of units, the bill now allows for developers to pay into the city's Housing Trust Fund in lieu of building the units to qualify for floor-to-area ratio bonuses, rather than the height and density bonuses in the original bill. In effect, it would codify the process by which PMC Property Group avoided including affordable units in its One Water Street development.

Both developers and neighborhood groups agreed with the Planning Commission that the amended bill is not satisfactory. Multiple community groups claimed that it would encourage developers to apply for and receive height variances from the Zoning Board of Adjustment to build big enough to justify an affordable housing portion or payment into the Housing Trust Fund.

“This is a mixed-income housing bill that has zero hope of building any mixed-income housing,” said Alterra Property Group Managing Partner Leo Addimando, who serves as treasurer of the Building Industry Association. “It’s going to really depress residential in Center City so you will have people looking to build more density in the neighborhoods. It will exacerbate some of the issues that were the genesis of this bill: displacement, gentrification, people being priced out of neighborhoods they grew up in.”

Proponents of the bill, such as the Philadelphia Department of Planning and Development, said mandated set-asides are not financially viable, especially for residents with income far below the area median.

“It’s very, very difficult for the private market, from the revenue they are making out of the market-rate sales, to subsidize that low,” Director of Planning and Development Anne Fadullon said at the commission hearing. “That’s why you have people saying that, at really lower income levels, the economics don’t work. That’s why you have the option of the Housing Trust Fund, which is targeted at those low-income levels.”

The Planning Commission's ruling against the bill is not binding, and a hearing at the council's Rules Committee is scheduled for Monday.