Pennsylvania CRE Has Mixed Reaction To Shapiro's $1B Housing Plan

Gov. Josh Shapiro's new statewide Housing Action Plan has fielded praise and criticism from commercial real estate executives and trade groups.

The governor hopes his initiative will make the commonwealth a national leader in residential affordability, he said during a press conference Thursday in North Philadelphia. His administration began working on the plan in September 2024.

“For too many families in Pennsylvania, housing prices are rising faster than their paychecks,” Shapiro said.

The plan, much of which is dependent on cooperation from state lawmakers and local officials, would have major implications for the rental apartment and manufactured housing sectors. 

In addition to seeking the creation of a $1B state infrastructure fund tailored to support new housing construction, Shapiro wants local officials to roll back the red tape that has hampered building in recent decades.

While slow housing development is a nationwide issue, the situation is particularly grim in Pennsylvania.

The state ranked No. 44 for new home construction between 2017 and 2023, according to the Pew Charitable Trusts. This is projected to create a 185,000-unit shortage by 2035 if no action is taken, according to the Pennsylvania Apartment Association.

“Zoning reform is critical to address the shortage of affordable housing,” PAA Vice President of Government Affairs Steven Chintaman told Bisnow. “Our organization supports those commonsense housing policies.”

The governor is seeking to make the construction of accessory dwelling units, duplexes and triplexes by right in neighborhoods zoned for single-family homes. This effort was lauded by Riverwards Group Managing Partner Mo Rushdy, who chairs the Philadelphia Housing Development Corp.

He also praised Shapiro’s support for the Local Economic Revitalization Tax Assistance Act, which could underpin a 20-year residential conversion abatement under discussion in the Philadelphia City Council.

Shapiro’s plan also has new support for renters. The measure includes additional eviction protections, a ban on denying tenants using public assistance to pay their rent, and caps on how much landlords can charge for security deposits and rental application fees.

This part of the plan raised concerns for Chintaman, who said the additional costs landlords may incur could be passed on to renters and decrease affordability.

“It’s a difficult conversation … There are unintended consequences that harm or hinder our industry,” he said.

Manufactured housing is also a major focus of the governor’s proposal. 

While residents of those communities usually own the structures they live in, they generally rent the land underneath. Shapiro wants to cap how much landlords can increase the rent each year and give tenants the right of first refusal if a property is sold.

The Pennsylvania Manufactured Housing Association had criticism for the governor, particularly in response to the proposed rent control.

“While well-intentioned, blanket solutions like government-imposed rent caps risk undermining the very communities they aim to protect,” the organization said in a statement.

“They restrict the ability of responsible owners to adjust rents in line with actual operating costs, which can lead to deferred maintenance, reduced services, and ultimately, deteriorating living conditions,” it added. “Housing costs overall are skyrocketing nationwide due to lack of supply. And rent control will only continue to stifle the supply by discouraging new investment.”

Shapiro’s plan has some similarities to Philadelphia Mayor Cherelle Parker’s HOME Initiative, which aims to build or preserve 30,000 units before the end of her first term in January 2028. The Philadelphia City Council approved an $800M bond issuance for the plan last month.

Concerns about the housing affordability crisis have also fielded bipartisan attention in Congress.

The U.S. House of Representatives passed the Housing for the 21st Century Act by a 390-9 margin Monday. The wide-ranging, supply-oriented bill seeks to ax federal environmental reviews that often delay new construction and create national guidelines for localities to reform their zoning. The bill is expected to be combined with a larger Senate bill before it heads to the president's desk.