More than 230,000 Philadelphia families choose between paying for food, housing, or health care. In too many neighborhoods, residents question how and when they will benefit from the new home construction seemingly all around them.

Recently, City Council held a public hearing on the Neighborhood Preservation Initiative (NPI), a $400 million plan to invest in affordable housing development and home repairs, support small businesses, and preserve neighborhoods. NPI will be funded by a 1% development impact tax on residential construction.

In 2020, the Building Industry Association of Philadelphia (BIA) — of which I am treasurer — endorsed NPI. The BIA made the difficult decision to support the tax because it is a more equitable alternative to other proposals designed to address a housing affordability crisis, and we believe that the entire development community must contribute toward solving this problem.

The BIA supported NPI with the understanding that it would be tied to a larger strategy that promotes equitable growth and supports development by both the public and private sectors. We believe that the combination of funds from NPI bonds and those being directed into Philadelphia’s Housing Trust Fund, which is fed by developers to address the city’s housing crisis, could be sufficient to ensure a dramatic increase in affordable housing construction citywide. Until now, the Housing Trust Fund has been the city’s local funding source to address affordable housing development, preservation, and assistance.

However, two obstacles remain: 1) a reluctance to dispose of city land, and 2) proposed legislation mandating the inclusion of affordable units (known as inclusionary zoning). If unaddressed, these issues could severely limit NPI’s success.

» READ MORE: Owner of West Philly subsidized townhouses plans to sell, displacing dozens of families. It’s an example of the vulnerability of affordable housing.

While well-intentioned, inclusionary zoning can halt development in neighborhoods that need it most. Philadelphia has one of the highest construction costs in the country, and without the right incentives to offset the reduction of income from affordable units, inclusionary zoning legislation might do little to solve the problem. If real estate developments can’t show they will turn a profit for investors and funders, they won’t get financed, which will impede the development of affordable housing, especially in emerging neighborhoods.

“While well-intentioned, inclusionary zoning can halt development in neighborhoods that need it most.”

Mo Rushdy

A 2016 report from the Urban Land Institute’s Terwilliger Center for Housing agreed, concluding that, to be sustainable, any inclusionary zoning policy needs to include incentives such as direct subsidies, density bonuses, tax abatements, and reduced parking requirements. For inclusionary zoning to work in Philadelphia, experts must scrutinize any changes to existing development incentives to ensure they will produce the intended results.

That brings us to the second roadblock to affordable housing: the difficulties of accessing public land that requires City Council action.

In 2019, City Council passed Bill No. 190606, which created a new streamlined process to allow the Land Bank to dispose of city land to qualified individuals, nonprofits, or private developers if 51% of the proposed homes are affordable. The legislation is designed to create mixed-income communities on city-owned land, making housing within reach for all. It’s that simple. But not all councilmembers have transferred the land in their districts to the Land Bank. Without a councilmember resolution, the land will not be moved to the Land Bank and available for affordable housing under this legislation.

To leverage this bill, the BIA launched the “Can I live here?” campaign to inform residents about the legislation and ask them to tell City Council they support affordable housing on public land. (My company has several applications into the Land Bank that would allow hundreds of affordable homes to be built.)

Although the power of Bill No. 190606 has not yet been realized, it is a public-private solution that streamlines affordable housing development on city land at high percentages. With such a solution, inclusionary zoning proposals become unnecessary — and counterproductive.

Mo Rushdy is the treasurer of the Building Industry Association of Philadelphia and managing partner at Riverwards Group.