Philadelphia has a development problem.

Only 1,502 market-rate apartments started construction in the city last year, down from nearly 7,000 in 2022. This summer, greater Philadelphia's office construction pipeline fell to zero after the region's last active large office project was completed.

High interest rates, insurance premiums and construction costs are part of the reason why. While Philadelphia can't control all of those forces, it can control some of the risk around getting projects built, said General Building Contractors Association President and CEO Benjamin Connors.

Founded in 1891 as the Philadelphia chapter of the Associated General Contractors of America, GBCA is one of America's oldest trade associations. According to Connors, while Philadelphia’s fundamentals remain resilient — world-class universities and healthcare institutions, a strategic East Coast location, a skilled construction workforce and relative affordability — more needs to be done to revive the city’s pipeline of projects.

“Philadelphia's fundamentals are strong, but we can't take investment for granted,” Connors said. “If we want developers to continue putting capital into this market, we have to focus on the things we can control and reduce unnecessary risk.”

Developers take the first risk, committing capital long before every entitlement, financing or construction question is resolved.

When projects move forward, the benefits extend beyond the jobsite. AGC estimates construction contributed $42B, or roughly 4%, of Pennsylvania's GDP in the first quarter of 2025. Projects support jobs, professional services, suppliers, local businesses and the tax base.

Developers willing to invest in Philadelphia should be viewed as partners in the region's growth, Connors said. The question is how to make that investment more predictable.

For private developers, time is money. Long approval processes and uncertain regulatory timelines can determine whether a project pencils. Clearer pathways from concept to construction can reduce unnecessary risk.

Public projects face a different version of the same challenge. Procurement rules can limit flexibility before construction starts, affecting cost, schedule and coordination.

This is highlighted in Pennsylvania's Separations Act. The 1913 law requires separate prime contracts for major trades on covered public projects, limiting an owner's ability to select the delivery method best suited to a particular job.

When the School District of Philadelphia sought a waiver from multiprime requirements for a group of projects, it estimated a single-prime approach would save significant time and $28.3M, Connors said. The Pennsylvania Department of Education approved the waiver after determining it would allow the district to operate more efficiently and economically.

“The question shouldn't be whether one delivery method is always best,” Connors said. “Public owners should have the flexibility to choose the approach that gives taxpayers the best combination of cost, schedule and accountability.”

Predictable payment belongs in the same conversation, he said. Pennsylvania has prompt-payment protections for public and most private construction, but contractors still carry substantial labor, material and subcontractor costs before being paid. Delays spread risk through the project team.

“Companies that perform according to their contracts should be paid according to those contracts,” Connors said. “That isn't just a contractor issue. It's a project issue.”

But making Philadelphia more competitive isn't solely the government's responsibility, he said.

If developers are going to put capital at risk, the construction industry has an obligation to help manage it. For GBCA and its roughly 340 member companies, that means investing in workforce development, technology, training and safety.

An independent analysis of Occupational Safety and Health Administration data in the Philadelphia region provides one measure of that performance. After adjusting for construction sector, company size, year and geography, organizations identified as GBCA members had a 70.3% lower rate of other illness-related incidents and 21.6% fewer cases involving days away from work, job restriction or transfer than the comparison group. Job transfer and restriction cases were 35.6% lower.

Those differences were statistically significant, Connors said. The data doesn’t guarantee the performance of any individual contractor. But for owners evaluating construction partners, they provide a meaningful signal.

“If you're responsible for delivering a project, safety affects people first, but it also affects schedule, productivity and risk,” Connors said. “If you're building a shortlist, GBCA members are a good place to start.”

GBCA’s role today isn’t simply to advocate for contractors and partner with the trade unions but also to help solve problems that can keep projects from moving forward.

“Bring us in early,” Connors said. “Our contractors solve problems for a living. If you're trying to make a project work, don't underestimate what the construction community can bring to the conversation before major decisions are made.”

That can mean identifying constructability challenges, labor availability, scheduling risks or cost pressures before they become expensive problems.

Philadelphia has the assets to compete for investment. The next step is reducing the avoidable risk around turning that investment into projects, he said.

“If you have a project you want to make happen in the greater Philadelphia area, call us,” Connors said. “GBCA wants to be part of the solution.”

This article was produced in collaboration between Studio B and GBCA. Bisnow’s editorial staff was not involved in its creation.

Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.