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Philadelphia's Affordable Housing Plan Comes Into Focus: 1,000 Single-Family Homes On City Land

City Council President Darrell Clarke, speaking at the groundbreaking ceremony for The Hamilton.

The city of Philadelphia has finally put up its own funding to start using its portfolio of vacant land for affordable housing production.

On Thursday, multiple city officials and members of Philadelphia City Council gathered at an empty lot in West Philadelphia to announce the launch of Turn The Key, the city's new program to develop affordable, single-family homes for first-time buyers, Council President Darrell Clarke's office announced. By turning over land virtually free to private developers who respond to requests for proposals, Turn The Key is projected to create 1,000 new single-family homes for households making, at most, 80% of the area median income.

Houses built through the program will have three bedrooms and 1.5 bathrooms, be energy efficient and cost no more than $250K, the announcement stated. Mortgage payments are not to exceed $1,200 per month, which is where the city's funding will come into play — $7M to $8M initially, to come out of the $400M Neighborhood Preservation Initiative plan passed by council in 2020, the Philadelphia Inquirer reports.

City funding will go toward offering what it termed soft loans of up to $75K, depending on household income, to offset down payment and closing cost expenses, the announcement stated. Homeowners who take out such loans would be adding a second mortgage to their house, though it is designed to be forgiven gradually — by the end of a standard 30-year mortgage, the soft loan would be completely forgiven.

The process of identifying and disposing of the parcels will be the shared responsibility of the Department of Planning and Development and the Philadelphia Housing Development Corp., which absorbed the Philadelphia Land Bank and the Philadelphia Redevelopment Authority in 2019. Since the beginning of this year, RFPs for dozens of lots have already been posted to the PHDC website.

Turn The Key is one of several ways in which PHDC and the city have attempted to leverage vacant, city-owned lots to benefit the city. A law passed in early 2020 unlocked the potential for such lots to be disposed of for nominal fees to developers who promise to keep at least 51% of residences on-site affordable. A program launched last year promised to make empty lots available for participants in its Minority Developer Program.

If Turn The Key works as intended, it will break a years-long streak of policies from council that largely encouraged affordable housing through regulation rather than economic support, which private developers have called everything from misguided to actively hostile.